Macroeconomic Trends: Inflation and Lunch Prices

The economic factor that all North Shore students are experiencing the most is inflation. Lunch prices at North Shore have increased dramatically and it hasn’t gone unnoticed. Students are growing angry and would have already boycotted the school’s lunch if the Seniors successfully organized it. On the bright side, though, students are finally applying math to real life by drawing exponential growth curves reflecting the surge in lunch prices. But, in all seriousness, inflation is a real phenomenon that’s affecting our country and world as a whole.

To truly dissect the root of inflation, one must understand the economic factors behind it. Inflation is when a currency loses its value as a limited supply of goods and services are highly demanded. The demand for goods and services grows when a country prints more money, as it usually ends up in the hands of consumers who then have more money to spend on goods and services. When consumers chase after more goods and services, sellers see they’re willing and able to pay more and therefore raise their prices. The pandemic has forced many countries to print money, resulting in consumers demanding for more goods and services and an uptick in inflation. A caveat to money printing is that the new money doesn’t necessarily all go into circulation: much of it isn’t needed by consumers, so they pour it into investments and savings accounts instead. Another side to the inflation coin is economic output, or, in other words, the supply of goods and services. Because the pandemic put the world on hold for two months, supply chains were disrupted like never before and the effects are still reverberating a year-and-a-half later. These supply chain issues leave a smaller pool of goods and services for consumers to buy from, resulting in upward pressure on prices. America’s massive stimulus program exacerbated the two factors causing inflation. On the supply-side, the enticing unemployment benefits deterred many from returning to work, which constrained our supply chain even more. The more obvious factor is the unprecedented money printing and spending that spiked the demand for goods and services. Although the government has played a role in causing some inflation, the circumstances of the pandemic have made it unavoidable as a whole.

Inflation has spiked to a record 6.2% (and the cost of groceries up 5.4%) in October, yet no one can crack the code as to why our lunch prices have grown even higher than that.