Expert offers advice for consumers as inflation reaches highest rate since 1982
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As inflation hits a 39-year high, a pricing expert in Minnesota offered advice to consumers on how to adjust to skyrocketing costs.
Prices jumped 6.8% in November compared to last year, the largest year-over-year increase since 1982.
Certain products saw even greater increases, with beef prices going up 20%, used car prices up 31% and gas up 58% from last November.
"Things are changing faster than you know. And what you thought prices looked like isn’t true anymore," said Mark Bergen, a pricing expert at the University of Minnesota’s Carlson School of Management. "Everything is up and more than I anticipated. To be fair, I think it’s more than companies anticipated and more than consumers have as well."
Bergen said American consumers have enjoyed a long period of stable prices, so the skyrocketing inflation is a new experience for most people.
"Start to think about what kinds of trade-offs you need to make in your lives to deal with it," Bergen recommended. "It may not add up like it did before, so you’ll have to start thinking of some ways to scale back. What are the things in your budget that have changed so much that, those I’m willing to give up on?"
He suggested Minnesotans be attentive and shop around, perhaps more than usual, in order to get the best price.
Bergen said many people also do not realize how many goods and services are negotiable.
You may be able to barter recurring payments, such as phone contracts and gym memberships.
"You can negotiate anything. Go to that company and say, look, I’m going to have to cut back unless we find a way to help me make this and navigate through," Bergen said. "Places with lots of payments coming up or those that make up big parts of your budget are not bad places to start. Just go back in and ask, can you change things?"
He said it also may be worthwhile to have a discussion with your boss to see if the company can offer a raise that is in line with inflation.
"I urge people to go in and talk to their employers. As prices spiral up, you not only have to take care of your wealth but you have to take care of your income," Bergen said.
As you are shopping for groceries and other goods, Bergen recommends taking a closer look at the products themselves as well.
"Be attentive of the ways they may be changing prices. They’re going to try to change in ways you don’t notice as much. For example, there’s an idea called ‘shrink-flation’ where they’re just going to shrink the size or lower the quality, so just be attentive to what you’re getting," Bergen said.
He said, as businesses try to keep up with inflation, some may try to pass new costs to the consumer.
"There are a lot of hidden surcharges. They’ll hide something in a transportation fee, so you don’t see it in the list price," Bergen explained. "So there is a consumer protection side to be aware of. You need to protect yourself."
5 EYEWITNESS News asked Bergen how long he expects inflation to stay at such high levels.
He responded, "The thing about inflation is it is very uncertain. So it’s not like it’s going up and is going to stay forever. Inflation bounces around. Right now, we’re at a couple of periods of highs. I wouldn’t be surprised to see some periods where it goes back down a bit. It’s certainly here for the foreseeable future but I’m not worried about it getting out of control and spiraling out at super high levels for extended periods of time."