As of October 2021, Wendy Edelberg shared in “What does current inflation tell us about the future?” that we have seen an inflation rate of 6.2%, increasing gas prices and average cost of living that can be compared to the Great Depression.
The Great depression began in the year 1929 when the stock market crashed and created a widespread panic that led to 15 million Americans being unemployed and over half of the country’s banks had failed. It decreased at the start of World War II, because private investments began to grow and the government cut back on spending but did not truly end until 1939.
The inflation we are experiencing today was caused by the widespread panic of covid -19. Consumers have increased supply and demand for products out of fear of quarantine, causing the products to become scarce and expensive.
Cost of Living
In 1930, gas prices were an average of 10 cents a gallon ($1.66 today). However today, gas prices are rising and have reached an all-time high since 2014. Prices are currently an average of $3.40 a gallon and even higher in some states. We are continuing to see these prices rise.
During The Great Depression the cost of living was an average of $4,000 per year, today that amount would be equivalent to $60,575. Yet, the average salary was $1,125 per year.
Today a single person household costs $1,000 per month and a family of four is $4,000 per month. The United States currently has an average yearly income of $51,480.
During the year 1933, the unemployment rate was at 24.9% for the United States. In 2020 the unemployment rate reached 14.8% due to the covid -19 crisis.
On top of that, businesses are being challenged with a labor shortage, there are plenty of jobs but nobody wants to work. The Federal government is currently offering $300 weekly for the pandemic unemployment crisis, this also means that people are receiving more money by staying at home than they would be if they were to return to work.
In order to fix the economic problems, the United States is witnessing, government spending needs to decrease to motivate people to return to work. The reality of the depths of this economic crisis is horrifying. It is time Americans realize the situation we are in and start taking actions to overcome what may be the “second” Great Depression.
Content Writer and Researcher