Monday, February 11, 2013

SHARP INCREASE IN LIVING COSTS HAVING AN IMPACT

Wow!

With thousands of provincial government employees on tenterhooks waiting for the guillotine to drop on their jobs the reality of the rising cost of living in a have province is hitting hard. The prices of key staples are on an upward trend that shows no sign of abating.

Over the past few months the price of milk has risen by 48%, gasoline cost more than it did this time last year, bread prices are up significantly as is flour and rice, home heating fuel prices are up, property taxes took a steep rise, fruit prices are crazy, eggs cost more, breakfast cereals are more expensive as is pork and beef and vegetable prices are increasing.  Even the price of the iconic Tim Hortons Coffee has gone up.

For those of us raising a family, making average wages, saving for kids educations our fixed costs are rising at an incredible rate. Cheap TV's, cars & furniture do not compensate for greatly inflated grocery costs.

The United Nations food index soared 25 per cent last year. The World Bank warned is concerned that  the global economy is "one shock away" from a food crisis.

Here in Canada the impact of last year's drought in the United States, increased grain prices and swings in global geopolitics means food inflation is going to outpace the national inflation rate.

When food suddenly costs more, those who can least afford it get hit hardest.  I can only imagine the pickle that those on the margins are facing.  Higher prices for frequently purchased items, like eggs and meat, are putting severe strain on people's ability to pay the bills.

I can not help but wonder if our local economy is one shock away from a housing crisis. Can the St. John's economy shoulder a 20% reduction in provincial government employees?

The divide between the haves and have-nots is becoming much more prominent in our oil based have economy. 

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