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Which goods are less expensive the 20 years ago? Which are more?

This is a great infographic from Visual Capitalist to show how general measures of inflation in the US mask significant differences within individual product categories (going nicely with this month-by-month variations in individual products on the WSJ here). It would also be an interesting introduction to trade and globalisation.

You can ask your students what they think the more expensive goods have in common and what the less expensive goods have in common, or for the forces they think have come into play. You can also ask what they think the effects of these relative price changes might be.

You can follow this up with the Visual Capitalist article, which has some nice additional context. It comments how it is those which can be easily outsourced whichhave witnessed price reductions, whilst key "non-tradable" categories have seen substantial rises. It suggests factors responsible for the dramatic rise in healthcare costs such as escalating labour costs, an ageing population, advanced technology, and the pricing of pharmaceutical products and hospital services. It also gives the suprising statistic that half of all Americans now shouldering medical debt, with the majority owing $1,000 or more.

They explain that the skyrocketing tuition costs and university textbook prices disproportionally impacts students from low-income backgrounds. Decreases in Pell Grants and state funding for higher education have further compounded this issue.

They also explain possible causes of those products which have decreased in price, the largest of which is globalisation. Notably, flat-screen televisions, which at the dawn of the century used to cost around 17% of the median income, now cost less than 1% of the U.S. median income. Prices for mobile phone services, software, and toys have also diminished over the past two decades. In the meantime, prices of items such as clothing and household furnishings have remained comparatively steady, even taking into account the most recent wave of inflation.


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