If it seems like things are more expensive these days, it’s cause they are! Myles digs into the current causes of inflation.

SUBSCRIBE to Above the Noise so you never miss a video!
https://bit.ly/3tNKzhV
And follow us on Instagram and Twitter!
  / abovethenoi.  .
  / atn_pbs  

** What is inflation?
It’s the increase in the cost of goods & services over time. It’s measured by the Bureau of Labor Statistics using the Consumer Price Index (CPI)-- which looks at the cost of a bunch of different items called a “basket of goods” They release monthly reports, so when people say inflation is at 8% this month, what they usually mean is that stuff on average costs about 8% more than it did the same time the previous year. The Federal Reserve sets policies to try to keep it around 2%.

* Is inflation bad?
As of April 2022, inflation was around 8% and it becomes a problem when wages don’t keep up with the rising cost of things. According to a UPenn analysis, in 2021 wages for the lowest-paid workers did go up by about 6.5%. But the increase in those earnings didn’t keep up with inflation in 2021. Even middle-income earners' wages had a hard time keeping up with rising costs.

*What’s causing inflation?
There’s lots of debate about what's causing the current inflation. But in general, economists tend to point to agree on a couple of things. The first is supply chain issues from shutdowns during the pandemic. World wide a lot of factories shut down, materials stopped being mined, and shipping companies reduced their schedules. This created bottlenecks making it harder for us to get stuff we wanted to buy. Meanwhile, a lot of us were stuck at home and started ordering stuff online so demand for things rose. Supply was low and demand was high so you get inflation. Our dependence on fossil fuels is another big driver of the inflation we are seeing. The US is still very dependent on fossil fuels which are at the mercy of the volatile global oil market and influenced by things like geopolitics, financial downturns, and war. Currently, oil prices are super high, partly because of the war in Ukraine.

** Did covid stimulus cause inflation?
There’s lots of debate among economists about this. But the Federal Reserve Bank of San Francisco did an analysis showing that both Trump and Biden’s stimulus plan could account for about 3 percentage points of the inflation we are seeing– but there’s a large margin of uncertainty around that number.

**Is corporate greed responsible for inflation?
In certain markets– there are just a few companies that control a large portion of the market– which makes it easier for them to raise their prices because they have less competition. And now, they can use the excuse that inflation is making it more expensive for them to run their business, so they have to increase their prices. But there are some reports of some big companies raising their prices and reporting record profits– suggesting that they are raising their prices more than they really need to, and that contributes to inflation as well. Moral of the story: lots of different things are impacting inflation.

SELECTED SOURCES

https://www.nbcnews.com/business/busi...

https://www.vox.com/22996474/inflatio...

https://budgetmodel.wharton.upenn.edu...

https://www.theguardian.com/business/...

https://www.frbsf.org/economic-resear...

https://www.weforum.org/agenda/2022/0...

https://www.eia.gov/finance/markets/c...

TEACHERS: Get your students in the discussion on KQED Learn, a safe place for middle and high school students to investigate controversial topics and share their voices. https://learn.kqed.org/discussions/

About KQED
KQED serves the people of Northern California with a public-supported alternative to commercial media. An NPR and PBS member station based in San Francisco, KQED is home to one of the most listened-to public radio stations in the nation, one of the highest-rated public television services, and an award-winning education program helping students and educators thrive in 21st-century classrooms. A trusted news source, leader, and innovator in interactive technology, KQED takes people of all ages on journeys of exploration — exposing them to new people, places, and ideas.

00:00 Intro
00:45 What is inflation?
02:12 History of inflation
03:10 Are wages keeping up with inflation?
04:04: Causes of inflation supply chain
05:40: Covid Stimulus and inflation
06:14 Inflation and gas
06:34 Inflation and corporate greed