Americans, faced with rising inflation, have become nostalgic for the prices of two years ago, when the cost of basic groceries was almost half their price.
In the past, people might have cynically recalled how the prices of everyday items have soared over decades, but now people are seeing prices escalating right before their eyes, according to a Wall Street Journal report.
Avocados averaged $1 a piece in early 2021, but had jumped to $2.50 just a year later.
“There’s a certain whiplash,” a 41-year-old marketing consultant told the newspaper in reference to the price of avocados. ‘Was that a bygone era from my youth or was it just last year?’
However, according to finance professors, there is psychology on top of inflation. On average, people exaggerate the magnitude of inflation and remember lower prices than they actually were.
Recent inflation has left some feeling nostalgic about prices just two years ago – the cost of food has risen significantly and faster than wages
Avocados averaged $1 a piece in early 2021, but had jumped to $2.50 just a year later
Nonetheless, people are right when they sense that the cost of living is rising and the cost of household food is exceeding wages.
In the past two years, since February 2021, the prices of groceries like grains, meat, dairy, and fruit have increased by an average of about 19 percent, according to the US Bureau of Labor Statistics.
The price of eggs has increased so much over the past year that Americans even began smuggling eggs 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 this change in hourly and annual wages represents a sharp increase historically, households have experienced reduced disposable income.
While government stimulus packages increased the amount of cash in ordinary American households, inflation has reduced the purchasing power of all that money.
A 51-year-old PR consultant in New York told the Journal that she filled with longing last summer when raw bagels at her local deli were $1.60 instead of $1.95 and a can of soda was $1 instead of $1.25 cost dollars.
For her, however, the nostalgia is more than just the price.
“It’s emotional and means something else, like, ‘Oh my god, when this fundamental thing is up 50 percent, my whole life is going to unravel,'” she told the Journal.
For many consumers, the desire for lower prices is more than just price, 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 god, if this fundamental thing is up 50 percent, my whole life is going to fall apart,'” one woman told the Journal
Eggs cost $4.21 per dozen last month, up from $1.60 in February 2021, according to the Bureau of Labor Statistics
“It’s not just about the nostalgia about the award — it’s about nostalgia about your life and where you’ve been and what your hopes and dreams were,” she added.
Eggs cost $4.21 a dozen last month, up from $1.60 in February 2021, and a pound of chocolate chip cookies cost $5.18, up from $3.80, according to averages from the Bureau of Labor Statistics.
Those drastic, significant price hikes are likely to be etched in people’s memories, Yale School of Management professor Jason Dana told the Journal.
“People are particularly sensitive and alert to price increases and don’t think as much about wage increases,” he said.