Sunday, April 29, 2012

Inflation of the Phone Bill

The latest published inflation rate, shows that the cost of consumer goods rose 2.7% over the last year.  Historically a 2.7% inflation rate is a great number.  However I wonder if that includes things like phone bill payments.  I am not an economist but just looking at how much we pay in our phone bills over the past 5 years as cell phones have risen in popularity is astonishing.  Consider that the average home phone bill was probably $50 and now most people use cell phones as their primary means of contact and that these bills are now at least $100 depending on your contract.  This represents a 100% increase.

I have a family of four and my kids are now 10 and 12 years old.  Nobody told me I had to get them a phone, but I did as we no longer have a home phone.  Our phone bill for 4 phones is approximately $250/month or nearly $3,000 per year.  This is a huge expense, and as I type this out I actually feel sick knowing that this is 5x what I paid only 5 years ago.  Granted our phones do more than just make phone calls.  They provide internet access, games, texting etc.  But are all those things really worth 10% of the average American income.  I don't think so.  And as soon as the contracts are up I am cutting costs dramatically.  With the internet, I can have a free home phone through the internet.  I need to show my kids what is worth paying for.  When I was a kid, we used a payphone and parents didn't worry as much.  Today you are made to feel that everyone needs to be connected at all times.  We are an insecure society, always worrying.  Maybe I am going overboard but I am sure some people feel the same way.

Oh and by the way, the Median income in the United States is an abysmal $26,344 which is a 10 year low.  I am led to believe that this number will continue to fall as unemployment rates are not improving and wage growth is significantly lower as companies find as many ways as possible to cut costs in this tough economy.

References
http://www.usinflationcalculator.com/inflation/current-inflation-rates/

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