Dan O’Donnell on inflation, Valentine’s Day, and how the things that Americans used to take for granted are now all but unaffordable
Feb. 14, 2024
Perspective by Dan O’Donnell
Love is in the air this Valentine’s Day, but how exactly are we to express it when prices are sky high? Following this week’s hotter-than-expected inflation reading, CNN reported that “dining out [is] a luxury” that many just can’t afford. Want to buy her flowers? Wholesale prices are up 30%, pushing the price of a dozen roses higher than ever before. Candy? It’s up 13% in a year and 27% since 2022.
No wonder 46% of respondents to a recent WalletHub survey say inflation is impacting their Valentine’s Day plans. That percentage actually seems low since there is no aspect of American life that hasn’t been affected by what can only be described as a cost of living crisis.
Valentine’s Day dinners and gifts are luxuries that can be downsized or skipped altogether, but rent, mortgage payments, and utilities are not. Since President Biden took office in January 2021, the monthly mortgage payment on a median-price home (with 20% down and a 30-year-fixed rate mortgage) is up 90.4%.
When Biden took office, mortgage rates were at an all-time low of 2.65%. To combat inflation that his disastrous fiscal policies almost immediately injected into the economy, the Federal Reserve was forced to raise rates higher and faster than at any point in the past four decades and the average 30-year fixed rate is now 7.14%. Renters, too, are getting hammered with a 6.1% year-over-year increase and 19.5% since Biden took office.
Other necessities like food (up 20.8% since Biden took office) and electricity (up 28%) are becoming increasingly unaffordable, and as a result Americans are drowning in a record amount of debt—more than $1.13 trillion in total and an average of approximately $3,400 for each man, woman, and child in the United States.
Because of this, one in every 10 Americans has no money saved at all. A third have $500 or less in savings, and more than half have $1,000 or less. How are they surviving? By taking on second and sometimes third jobs. 8.1 million people—5.1% of the total workforce—are working multiple jobs. They have no choice: Since Biden was inaugurated three years ago, average real hourly wages for all workers has declined 3.89% from $11.43 in January 2021 to $11.10 today.
One way to look at that is that the average worker (both part-time and full-time) got a $656 pay cut because purchasing power is so much weaker than it was three years ago. Inflation is costing the average American family $11,434 per year, and Biden is most certainly to blame.
Year-over-year inflation was 1.4% on the day he took office, and it rose as high as 9.1% within 18 months of him assuming the presidency. The average inflation rate under Biden is 5.7%, exactly three times higher than the 1.9% rate under his predecessor Donald Trump. No President since Jimmy Carter has had an average inflation rate anywhere near as high as Biden’s, and no President in the past 30 years has had a rate even half as high.
This has had a devastating impact on American families, who are now stretching the dollars they earn so far that what was an afterthought three years ago—celebrating Valentine’s Day—is now all but unaffordable.