Income falling behind inflation rate, what comes next – new video uploaded to AP Video Hub

In the video, he describes how income is not keeping up with rising inflation, how we got to this point and steps that might have to be taken to bring inflation under control. All videos in the Campus Insights series are free for download and use by all AP members and can be found at apvideohub.ap.org or by doing a general search on the Associated Press site. AP members may use the video or to pull quotes for print article or for broadcast or podcast.

STORYLINE

Bond says that individual buying power has decreased by 3%-5% on average over the last 6 months. The inflation rate is increasing rapidly month over month, but wage growth has not followed. This rise in inflation comes in the wake of supply chain disruptions caused by the COVID-19 pandemic. Bond says that the best-case scenario is after the pandemic is eliminated, things will stabilize and go back to the way they were. But as time goes on, he says, this scenario is becoming less likely. Bond says that more serious action may need to be considered, such as bringing money out of the economy. This can be done through higher interest rates, tax increases and reductions in spending. Bond notes that none of these things are popular because they are painful for individual consumers, making the situation tricky to navigate.