Home  Editorials Changing spending habits is now essential
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Changing spending habits is now essential |
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Monday, 19 May 2008 |
The words of an African American man purchasing gas at a North Miami gas station were reflective of the situation faced by most South Florida residents, and, really, residents across the entire United States. As he paid for the gas the man said, “How are we going to manage? The prices of gas, food, electricity and rent keep rising; but salaries remain fixed.”
It is a fact that the perpetual rising cost of food, gas, utilities, and now, even postage stamps, is taking a severe toll on the pockets of most citizens. According to the U.S. Labor Department the average price of groceries is climbing at an annual rate of approximately five percent – the sharpest increase in 18 years. Gas prices have increased by well over 20 percent within the last year. However, average weekly earnings are rising at only 3.3 percent. With salaries being far outstripped by rising food and gas prices, consumers are being left in a very serious quandary.
The fact that consumers are finding it more difficult to find money to spend on discretionary items is not surprising. Surveys conducted on behalf of the National Weekly over the past two years showed that the disposable income (income left after the basic bills are met) have been declining steadily.
While consumers would like to see the government intervene with the oil producing countries, or the large U.S. oil companies, in an effort to roll back the price of oil and gasoline, this is not an option that is going to be exercised anytime soon. The oil producing countries are enjoying a climate where the demand for their commodity is high, making them richer; gas companies are also enjoying unbelievable profits, while greedy commodity traders continue to speculate, pushing up oil prices.
Moreover, it is unrealistic to expect employers to offer significant salary increases at this time. With most businesses’ operating cost affected by rising oil prices, they cannot afford to increase salaries, and, in fact, some are faced with the real possibility of cutting staff.
It is therefore left to consumers to now radically change their consumption behavior. Without income rising to match rising prices it means cutting back on the things we purchase, and making the things we buy last longer. For example, there can be real savings in the amount of gas purchased by simply driving slower, keeping vehicles serviced, and restricting driving to only necessary trips.
Food bills can be contained by buying only the basic food items that are required. Electricity bills can be contained, by turning off lights that are not being used, and keeping the air condition at an average of 82 degrees. Unfortunately, a lot of the discretionary expenses that make our lives more pleasant will have to go. This may include dining out and going to the movies. In fact, families may bond better by dining together at home and watching rented movies. Times are hard and fast becoming like the times during and after World War II, when we understood the key word for economic survival was “austerity.”
In other parts if the country, there are reports of truckers saving by not running their engines when they park and sleeping in their trucks instead of motels; consumers are managing by buying generic brands of rice and flour, rather than name brands, and women are visiting salons and spas monthly instead of weekly. There are many austere means that can be adapted to enable consumers to cope with rising prices. The great challenge is learning how to cope, and although it may not be pleasant, it is the immediate solution.
Interestingly, as consumers begin to spend less on gas, food, clothing and entertainment, the prices of these commodities and services will begin to fall – high demand pushes up prices, and low demand pulls them down – and coping should be easier.
Please Fund Tri-Rail
Recent reports that Tri-Rail, the rail service serving Palm Beach, Broward, and Miami-Dade counties could be reduced drastically is very disconcerting. The state legislature was unable to approve dedicated funds for the railway, which is yet another example of how badly out of touch lawmakers in Tallahassee are with South Florida.
Tri-Rail’s passengers have increased by over 20 percent in the last year, as they try to save on gas. Unlike other cities in the U.S., mass transit in South Florida is relatively poor. The majority of people commuting to work depend on private vehicles. However, as gas prices increase people commuting between or within the three counties have been parking and riding either Tri-Rail or, in the case of Miami-Dade, Metro Rail. There also has been a significant increase in the number of passengers riding on metro buses in both Broward and Miami-Dade.
For Tri-Rail to have to cut back its services would be a severe blow to commuters who cannot afford to drive their cars. The state’s legislators and commissioners in the three county commissions must find a way to provide dedicated funding to Tri-Rail. These politicians cannot allow one of the very few mass transit providers in the region to reduce its service, while commuters need the service. Politicians were put into office to find solutions. Please, find a solution for Tri-Rail. |
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