A disclaimer: I am not an economist. The closest I ever came to being one was when I took an introductory economics course as a freshman at USC long, long ago.
Let’s put it this way, it was when the term “Laffer curve” was first being used and I was surprised to find that it was not actually the “Laugher curve.”
The professor was an economist who had served during the Kennedy administration and who looked, at least to me at the time, old enough to have perhaps served during the Roosevelt administration – Teddy’s, not Franklin’s. It was painful, but I digress.
Today’s topic is not unique to Berkeley County nor even the greater Charleston metropolitan area. But I think it may particularly apply to areas experiencing rapid economic and population growth. And, we certainly fall into that category.
As have many of you, for several years now I have noticed a downsizing trend when doing my grocery shopping. Some of my discoveries: Most ice cream and ice cream-like products shrank from half gallon containers to 1.5 quarts. Snack bars went from six to a package to five. That coffee brand’s K-cups cost the same as this one’s – uh, except the “premium” has only 10 or 12 cups in its package and the other brand has 16. The “standard” 6.5 ounce can of tuna fish that I grew up with? Now 4.5 ounces.
Eggs pretty much still go by the dozen, but doesn’t a “large” egg seem to have gotten smaller? Some milk containers are now either clearly smaller than the “standard” half-gallon or have grown larger, but are only 1.5 quarts or 1.5 liters, not a gallon.
Most products now list both standard and metric versions of weight and volume, but it seems more of them are switching solely to metrics. I am part of the generation that was predicted to embrace the metric system.
I understand metrics, but I find I still primarily “think” in the language of pounds, ounces, inches, and feet. Is this new metric size bigger or smaller than it was when I bought it in ounces? I don’t know. And besides, now even some once 2-liter products are going metrically smaller.
Underpinning this talk about size reduction, is the real culprit: Prices either stay the same or they increase. I.E., even if you walk out the store with the same products and the same price you paid the week before, you are carrying home less “stuff.” How does this get factored into something like the consumer price index (CPI)?
I perused information from the US Bureau of Labor Statistics, economic opinion pieces, and blogs online. Honestly, I got somewhat lost. But, there is an actual term for this downsizing. It’s “shrinkflation.” It appears it might – or might not – get accounted for in some official statistical way in the CPI. But what I didn’t find was this. If your favorite slab of sharp cheddar cheese was in an 8-ounce package and most of your favorite recipes involved a half pound of grated cheese; how does the “typical consumer” handle discovering that your “go to” cheese is now available only in 6 or 7-ounce packages?
I also found that people who study these things also point out another “stealth” inflation factor that can get overlooked in official CPI calculations. That is, quality decline.
My mind immediately went to a version of a well-known single-brew coffee maker that was given to me ages ago. I still have it and – although it does odd things and makes weird noises, I use it every day.
On the other hand, a newer version of the same model that I got two or three years later for use in my office died within a year. It was the same price (which I had marveled at), but was noticeably lighter and, well, cheaper looking.
Many of us have had similar experiences with household products such as HVAC units, refrigerators, etc. lamenting that “they just don’t make them the way they used to.” And guess what? They don’t.
So why is all this something I think folks living in our area need to be more aware of and become more educated about?
Increases in prices for services and products tend to follow economic and population growth. The CPI and/or some variation may be a factor in employer decisions about wages and salaries.
But if underneath what is being officially acknowledged in the CPI, we are also seeing these less visible and less immediately acknowledged cost factors of shrinkflation and quality decline, then many of us may find that our quality of living is not reflective of the economic and population growth we see around us.