Recent inflation has caused some to become nostalgic for the prices of just two years ago, such as the cost of groceries has risen sharply, and faster than wages.
In the past, people may have cynically remembered how the cost of everyday items had risen for decades, but now people are seeing prices rise before their eyes, according to a Wall Street Journal report.
Avocados were an average of $1 each in early 2021, but had risen to $2.50 just a year later.
“There’s an element of whiplash,” a 41-year-old marketing consultant told the newspaper, regarding the price of avocados. ‘Was that a bygone era of my youth, or was it just last year?’
However, according to finance professors, in addition to inflation there is psychology. On average, people exaggerate the extent of inflation and remember that prices were lower than they actually were.
Recent inflation has caused some to become nostalgic for the prices of just two years ago: the cost of groceries has risen sharply, and faster than wages.
Avocados were an average of $1 each in early 2021, but jumped to $2.50 just a year later
However, people are right to feel that the cost of living is rising and that the cost of household food products is outpacing wages.
Over the past two years, since February 2021, prices of food items like grains, meat, dairy and fruit have risen by an average of about 19 percent, according to the US Bureau of Labor Statistics.
The price of eggs has increased so much in the last year that Americans have even started smuggling them across the US-Mexico border.
Wages, on the other hand, have risen about 11 percent over the same period, according to the Federal Reserve Bank of Atlanta’s Wage Growth Tracker.
Although that change in hourly and annual wages is a historically large increase, households have experienced reduced disposable income.
While federal stimulus packages have increased the amount of cash in ordinary American households, the purchasing power of all that money has been reduced by inflation.
A 51-year-old public relations consultant in New York told the Journal she was nostalgic for last summer, when unroasted bagels at her local deli were $1.60 instead of $1.95, and a can of soda was $1. instead of $1.25.
Nostalgia, however, is more than a price for her.
“It’s emotional and it means something else, like, ‘Oh my God, if this basic is up 50 percent, my whole life is going to fall apart,'” he told the Journal.
Nostalgia for lower prices is more than just price for many consumers, it can also be an indication of how the rest of their lives are going. “It’s emotional and it means something else, like, ‘Oh my gosh, if this basic is up 50 percent, my whole life is going to fall apart,'” one woman told the Journal.
Eggs cost $4.21 a dozen last month, up from $1.60 in February 2021, according to the Bureau of Labor Statistics.
“It’s not just about the nostalgia for the price, it’s the nostalgia for your life, where you were and what your hopes and dreams were,” he added.
Eggs were $4.21 a dozen last month, up from $1.60 in February 2021, and a pound of chocolate chip cookies were $5.18, up from $3.80, according to US averages. the Bureau of Labor Statistics.
These drastic and significant price increases are likely to be burned into people’s memories, Jason Dana, a professor at the Yale School of Management, told the Journal.
“People are particularly sensitive and attentive to price increases, and they don’t think so vividly about raising wages,” he said.