The Rising Cost of Living
Rising costs of living is an issue affecting everyone, caused by inflation and wage stagnation.
Families are struggling to afford basic needs and many are forced to make sacrifices and reduce spending in order to afford basic items such as groceries. This is an issue that must be addressed immediately.
Cost of living increases are rising rapidly around the globe, which is partially a result of increasing prices, but also because incomes remain stagnant or decline. Many households are struggling to meet their bills; in the UK alone, 23% of households find it challenging to make ends meet according to research conducted by Office for National Statistics (ONS).
One key cause is rising food and energy prices, especially for low-income households. Food bank charities report increased requests for emergency supplies; during March 2022 alone, Trussell Trust supplied over 3 million parcels.
Transport costs have also contributed to this situation; petrol prices have reached all-time highs while energy bills will increase by 4-4% this winter, which will further strain those living on fixed incomes.
However, there are ways you can lessen the impact of high costs. Moving to an area with lower expenses or working from home may help to lessen their effects; both options become increasingly feasible with remote work’s increasing prevalence.
Inflation is a global issue affecting people of all ages. It occurs when prices for goods and services rise faster than incomes, placing strain on families worldwide. Although its effects are felt everywhere, especially those living in developing nations where rising food, fuel, and housing costs are especially evident.
An increased cost of living can make it more difficult for people to meet their basic needs, leading them into financial stress and anxiety, which in turn may contribute to physical problems like obesity or heart disease, as well as poverty – with its detrimental impact on mental and physical wellbeing.
Urban areas face particular difficulty with increased living costs caused by rising transport and housing prices, creating barriers to employment opportunities as well as social and cultural life that cities offer, which in turn reduces access to them for many. People on lower incomes are especially at risk from increased living costs since they spend a greater proportion of their money on essentials like food and energy, which reduces spending on things such as healthcare or social care that has lasting repercussions for health outcomes.
The Government’s Response
Many governments are adopting various fiscal measures to offset rising prices, such as price subsidies, tax cuts, and cash transfers. Though intended to aid families, their effectiveness remains uncertain; moreover, such policies may be costly and conflict with monetary authorities’ efforts at controlling inflation.
Millions of households remain burdened by rising bills and essentials costs, particularly lower and middle-income families that allocate the majority of their budget to basic necessities such as food, clothing, shelter, transportation costs, health services costs, education of children or elder care needs. Lower income families feel this impact most acutely. Families that reside within the bottom 60% of income distribution typically allocate about 75-80% of their budget towards such essential items such as transportation costs or child or elder care needs.
Inflation rates have been on an upward trend, yet are now beginning to moderate due to higher oil and food costs. Household incomes will take time to return to their former levels in real terms.
Some families are being forced to choose between paying rent and buying groceries, a tough choice made especially difficult for low-income households vulnerable to unexpected costs like medical bills. Financial difficulties can lead to long-term hardships including joblessness and education gaps that leave children living in generational poverty.
An increasing cost of living is a serious threat that impacts families across all income levels and geographic locations, necessitating immediate action to ensure all families can flourish and live dignified lives. Finding solutions requires policy reforms, investments in education and healthcare services as well as efforts to stimulate economic growth.
Price increases are one of the primary forces driving family budgets, compounded by inflation and wage stagnation. Although average wages have shown some sign of improvement this year, they still fall far short of keeping pace with rising prices of goods and services; since the start of pandemic in 2009 real hourly wages adjusted for inflation have actually seen decreases.
As a result, many families are opting to move back in with family or find roommates to help cover housing and other expenses. Our 2022 survey results indicate that food price hikes were the main contributory factor behind respondents deciding to live together again or seek roommates due to inflation or pandemic threats. Pollfish conducted its national sample survey with over 2000 U.S. adults who either moved back with family or found housemates due to pandemic or inflation-induced circumstances.
Rising costs can have a devastating impact on people’s health and wellbeing, contributing to greater food insecurity, increased stress levels and diminished access to healthcare and social care.