The Current Economy, Worst In My Lifetime

We have high wages, low unemployment and some rather positive economic conditions in some areas. So, why would I say that this is the worst economy in my time on this planet (42 + years)? Well, it is not that hard to understand when you break it down.

Sure, we have had worse overall. Of course the Great Depression from 1929-1939 was the worst this nation has ever seen. And the days of the gas lines in the majority of the 1970s must have been a really hard experience. But since that time, the only big economic hit was for a few years from 2008 to about 2012 and for most, it was more of an inconvenience than anything as that it was coming down from a time of massive prosperity.

The stock market has been on a dive for some time dropping thousands of points and the rate of inflation is worse than it has been in a generation. Home sellers in what was a booming real estate climate are now reducing their asking prices when once they would have been having buyers in bidding wars. Gasoline prices have hit all-time highs and climbed nearly $3.00 per gallon compared to a couple of years ago.

There are really two main reasons why the current economy is failing us. One is somewhat out of our control while the other is self-inflicted.

The current war in the Ukraine has caused a shortage in exports from that nation which is a leading supplier of many materials. The most notable is wheat. According to World Population Review, the Ukraine was the eighth largest producer of this export in 2020 at 24,912,350 tons. Russia ranked third at 85,896,326 tons. This combines for nearly 30% of the world's supply and has not been remotely as available since the invasion.

This is somewhat out of the control of our national leaders. I only say somewhat because most of the world, including the United States, have stood by and largely done nothing other than maybe throwing some money at the efforts in the Ukraine. If we would actually step in with a military presence, this could have been over months ago. Instead, it has resulted in price increase in wheat products like breads, crackers, baked goods, etc. The jumps have been so drastic that even retails with major buying power like Wal-Mart have had noticeable price increases. The store my mother works at has had at least 5 price increases in 2022 so far with another on the way.

The second reason for the situation we find ourselves in now was created by our own government, mostly under the current presidential administration.

During the most intense part of the pandemic, we repeatedly decided to provide stimulus checks to millions. Sure, the first one was likely necessary. But, buy the time the next ones came around, most people were in a more stable situation and it simply incentivized the idea of not getting out there and working. Employers became desperate to hire and were forced to increase wages in an excessive amount. While increased wages are generally a good thing, extending them to rates that include salaries and signing bonuses for inexperienced and unskilled labor that used to be reserved for the highly skilled and educated works has been a disaster.

This has led to the most favorable situation for job seekers in decades. This comes at a cost though. Those hiring people often have to decrease the number of hires, cannot afford the best talent and deal with high rates of turnover. Perhaps the biggest problem is while pay has gone up in many cases, prices of goods and services have outpaced it. National stats indicate that prices of goods and services have been around 3 percent higher than the increase in pay. So, essentially, people are at least 3 percent poorer on average.

So, while you might be making more, you're almost certainly keeping less of it. Unless you were one of the luckier, wealthier Americans at the start, like the rest of us, you are feeling a major pinch. And sadly, until we make some changes in our leadership, there is no end in sight.