Inflation has been making the cost of living go up around the world. It is global inflation. Inflation is an increase in the overall level of prices in the economy. This is what has been happening since the last time there was global inflation, which was in 2008.
One of the reasons there is global inflation is the rising energy and petrol prices. At the start of the pandemic, the price of oil dropped, but because the demand for it came back up because people wanted to start traveling again, the price came back up. In the US, the current cost of gasoline on average is about $3.31 per gallon while last year’s cost was $2.39 per gallon. This is very similar to what happened in the UK and the EU.
Another reason is the change to supply chain good shortages. Many manufacturers in places like Asia, have struggled to keep up with demand after the shutdowns and the COVID restrictions. Because of this, there have been shortages of materials such as plastic, concrete and steel, which has driven the price to become higher. Timber’s price is 80 percent more than it was before for the UK and twice that for the US. Retailers like Nike and Costco have put their price up because of supply chain issues and costs.
“I have been affected by inflation,” said international program director and testing coordinator Mr. Austin Bellino. “Lots of items that I purchase on a weekly basis have increased in price, which is not ideal.”
Shipping costs have also become higher. Retailers have had to pay more for goods to get to stores, and the price passes on to the consumers. It especially gets more overwhelming when there is a big demand for the item, but the shipping is slower and the cost is higher.
There have been rising wages since many people quit their jobs or changed their jobs during the pandemic. Since April, four million people quit their jobs in the US according to the Department of Labor. Because of this, there have been problems recruiting people such as drivers, food processors and restaurant waiters. For retailers in the US, 94 percent of them have been struggling to find people to fill in the empty roles. Therefore, the costs are passed on to the consumers, as well.
“I think food prices and restaurant prices have increased a lot,” said senior Mary Park. “I think it is because of the inflation.”
The climate also has affected inflation. Some examples: hurricanes lower the amount of global oil supplies, winter storms close factories that changed the incident from last year in Texas and coffee manufacturing cost in Brazil because of the severe drought that they have had for the past century. The climate has made an impact on inflation.
Imports that are more costly also take part in making prices higher. For example, the US import tariffs on Chinese goods almost passed onto the US customer entirely and because of that, the prices became higher. This also affected other countries because there were less US suppliers and global customers, making the price afterwards go back down.
Finally, another reason why there is such an issue with global inflation is because of the governments giving too much support to businesses and to the public, normal people. The governments worldwide are giving money to their citizens to support and help because of the COVID’s impact. Public spending and borrowing has increased not only in the United States, but across the world throughout the pandemic. Because of this, the taxes rose and still, the people’s wages have not changed in some countries. This has caused people to have a harder time paying for their way of living and continuing to be able to pay monthly.
Many economies created policies designed to protect the workers and also made welfare policies to be able to protect the lowest paid. Some economists say that these policies could push inflation even higher and make the support policies come to an end.
Inflation is affected by many factors in the economy. This raises the prices of everything that is used and bought in normal life. This is why gasoline has become more expensive, or why milk’s price in the UK has risen five percent. The whole world is currently going through this issue. As the world struggles together, it is important to communicate with the government and express concerns.