FROM NETWORK INDIANA
We may finally be getting out of the tough fight we’ve been having with inflation over the last three years.
That’s the assessment of Dr. Michael Hicks, an economics professor at Ball State University in Muncie. Hicks believes that things have shifted in that wages are finally starting to catch up with where prices for basic needs like milk and eggs are.
He said he understands that milk, eggs, and gasoline all appear to be more expensive than ever. But, Hicks is also urging you to put all of it in perspective.
“I know how much milk costs. I know how much eggs cost,” Hicks said on Indy Politics. “But, (people) don’t see the increase in wages as having the same cause of mechanism as the rise in milk prices or egg prices.”
Hicks also said you should consider other factors too. The Ukrainian war with Russia and even the Israeli conflict with Hamas have had an impact on gas prices. With eggs, it was last year’s bout with avian flu that forced farmers to put down thousands of birds.
Hicks said wages, on average, have gone up in the time that inflation has hit the economy. As wages go up, inflation essentially gets canceled out. As wages continue to rise Hicks said now the Federal Reserve will most likely start rolling back interest rates soon.
“Wages have outpaced inflation,” he added. “There was a period of time they didn’t in late 2022 and early 2023 wages were going more slowly than inflation, so (that’s why) it hurt.”
He said you will likely never see milk or egg prices go back to what they were before 2021. Instead, he said your wages will keep rising to meet the level of inflation the economy sits at. He said a drop in those prices, or “deflation”, would be indicative of a bigger problem with the economy.
The only place where wages have still not risen as much as they probably should have are jobs in the public sector. People like teachers, police officers, firefighters, and other public sector jobs have still had a tough go dealing with inflation.
Finally, as far as unemployment is concerned, Hicks said it is as low as it can possibly get outside of wartime. The national unemployment rate sits 3.7-percent.