Consumer Alert: You’re making more but it feels like you took a pay cut. Here’s why and what to do about it.

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ROCHESTER, N.Y. (WHEC) — This consumer alert is all about dominoes. I’m not talking about the tiles or pizza. I’m talking about the domino effect I believe is caused by astronomical inflation. Right now we’re seeing a correlation between high inflation and deep dept. And while correlation doesn’t necessarily signify causation, I’d put my money on my belief that one economic reality is causing another.

There are a number of things happening at the same time. Inflation is spiking, wages have not kept up with inflation, and American debt is deepening. While I can’t scientifically prove one is causing the other, you probably shouldn’t bet against me.

On Tuesday I wrote about a scary number, 8.5%. That’s the highest rate of year-over-year inflation since Reagan was in office and folks really did think leg warmers worked with any outfit. The price you pay at the pump is one of the main drivers of inflation.

The other predominant driver is food prices. Take a look at how much you’re paying for staples compared to this time last year.

  • Flour: 14.2%
  • Butter and margarine: 14%
  • Meat, poultry and fish: 13.8%
  • Milk: 13.3%
  • Eggs: 11.2%
  • Fresh fruits: 10.1%
  • Fresh vegetables: 5.9%

And here’s a troubling correlating occurrence. Consumer debt increased a whopping 11.3% year over year in February and credit card debt is leading the way with a 21% increase.

So here’s why I think inflation is causing our debt; it’s not just a correlation. Wages have increased, but not nearly as fast as inflation. The numbers tell the tale. Your earnings increased 5.6% year over year, but when you factor in inflation, you actually saw a 0.8% decline in wages. Ouch!

While some economists believe inflation may have peaked in March, high prices aren’t going away. We have to change our behavior. Here’s Deanna’s Do List.

  • Buy generic.
  • Choose frozen veggies instead of fresh. They’re cheaper and just as nutritious.
  • Buy your meat and staples at the cheapest grocers. The Today show recently named the cheapest grocers in America and four are in our area: Aldi’s, Walmart, Trader Joe’s and Costco. BJ’s would likely be on that list as well if it were a national warehouse store.
  • Lastly, don’t panic. We’ll all get through this together.