Years ago a fellow gun dealer suggested that rather than comparing cost in dollars,figure how many hours of pay it took"back then" and hours it takes now to buy a simular product, some are more and others are less.
That is the correct way to look at inflation.
Having more money doesn't absolutely mean you have more buying power.
There's a tendency to view inflation as only the cost of goods and services. That is an incomplete view of inflation. Inflation of wages and salaries has a direct consequence on the cost of goods and services.
Large scale pay increases (like when the minimum wage is increased) do NOT increase the overall buying power of the population (despite the lies that are often told to support higher minimum wages). In fact, large scale increases in pay often drive the costs of goods and services up disproportionately and have the overall effect of DECREASING individual buying power.
There are many historical examples of this on a small scale, such as hyper-inflated prices in boom towns. San Francisco during the gold rush days is a classic example. Oil boom towns in the 1920's and even in the 2010's are another example.
On a larger scale, when most families had a single income earner; families with dual incomes had significantly higher buying power. When the economy adjusted to most families having dual incomes, prices went up and dual income families went from enjoying the benefits of dual incomes to the burden of
needing dual incomes to meet the higher costs.
Money and buying power are not the same thing.
