Americans are already fed up with soaring inflation, but the problem is even worse than official statistics describe due to a sneaky phenomenon dubbed ‘skimpflation.’
Coined on a recent episode of NPR’s Planet Money podcast, skimpflation refers to a drop in the quality of services as businesses struggle to cope with a labor shortage and rising material costs.
While it is related to ‘shrinkflation’, which refers to stealthy reductions in package sizes, the services cutbacks of skimpflation are an even bigger headache for consumers, causing longer waits, fewer options and a general increase in daily inconveniences.
With US inflation at a 30-year high of 5.4 percent, skimpflation is piling on the woes for consumers who are already suffering.
In a prime example, Disneyland and Disney World have still not restored parking lot tram service six months after the theme parks reopened, infuriating visitors who have had to walk nearly a mile from their cars to enter and exit the parks.
‘The Trams are needed, many people can’t do all the walking. I personally can’t because of my bad back please get these going it will be so much better for many people,’ one irate visitor complained on Facebook.
‘Skimpflation’ is infuriating consumers as business cut back on services. In a prime example, Disneyland and Disney World (above last month) have still not restored tram service six months after the theme parks reopened
Nationwide delivery times for Domino’s pizza have steadily increased since mid-July. Above is a Domino’s in Livonia, Michigan
Other inconveniences have spread across the economy at a rapid pace. Nationwide delivery times for Domino’s pizza have steadily increased since mid-July, according to Bloomberg.
Hotels are cutting back on services such as daily room cleaning and free breakfast buffets, to the horror of guests waking up to find a meager tray of packaged food first thing in the morning.
Meanwhile, phone wait times for customer service are increasing across many industries.
Understaffed bars and restaurants have also seen customer satisfaction suffer, with complaints about service, food and cleanliness on the rise.
Airlines in particular have infuriated travelers with massive, seemingly random waves of flight cancellations, which the industry has only grudgingly admitted are due to staffing shortages.
Last weekend, American Airlines became the latest carrier caught up in the chaos, cancelling some 1,000 flights in a single day.
Overall, customer satisfaction has fallen in nine out of the past 10 quarters and are at their lowest levels in 15 years, according to the American Customer Satisfaction Index.
Customer satisfaction has fallen in nine out of the past 10 quarters and are at their lowest levels in 15 years, according to the American Customer Satisfaction Index
The consumer price index rose 5.4 percent in September from a year ago, up slightly from August’s gain of 5.3 percent and matching the increases in June and July. But skimpflation is adding headaches for consumers that the number doesn’t show
Air travelers line up at O’Hare International Airport’s United Terminal in September. Airlines in particular have infuriated travelers with massive, seemingly random waves of flight cancellations
‘Skimpflation is a new term, but it’s an old way that companies have had to react in the face of inflationary pressures,’ economist Jeffrey Haymond with Cedarville University told WKEF-TV.
‘It’s new to most of us now, because we haven’t had the big inflation with that we had inflation of the ’70s and we had a brief period in the mid 2000s. But even then, that wasn’t as long-lasting as what we are seeing today,’ he noted.
‘That seems to be, it seems to be more baked into the whole market now. And we’re starting to see it manifest more like the ’70s experience,’ Haymond said.
While the economy continues to flash positive signs, such as Friday’s positive employment report that sent the S&P 500 to new record highs, the pain for consumers in undeniable, and becoming an increasingly significant political issue.
On Tuesday, a third of voters in Virginia ranked the economy as their top concern, as the state elected Republican Glenn Youngkin to the governor’s office in a devastating upset for Democrats.
The economy’s reopening pains, now dragging on much longer than officials projected, are also becoming an increasing liability for President Joe Biden.
A poll last month found nearly two-thirds of Americans deemed the economy poor, with a majority saying they believed Biden was not handling the matter well.
Hotel breakfast buffets, such as the one above at Doubletree by Hilton Orlando, are becoming increasingly rare as hotels cut back on services and amenities to reduce costs
Understaffed bars and restaurants have also seen customer satisfaction suffer, with complaints about service, food and cleanliness on the rise. Above, a popular restaurant in West Palm Beach, Florida is seen in a file photo
Severe disruptions in supply chains, rising gas prices, and a labor shortage have made purchasing everything from furniture to cars more difficult and expensive.
Biden on Friday praised the U.S. economy for performing better than the rest of the world, saying it’s largely because of his $1.9 trillion coronavirus relief package and plans for additional spending of roughly $3 trillion on infrastructure, climate and social programs.
‘We still have to tackle the costs that American families are facing, but this recovery is faster, stronger and fairer and wider than almost anyone could have predicted,’ Biden said. ‘That’s what the numbers say.’
The president also acknowledged that voters can’t just rely on the numbers-they need to ‘feel it in their lives and their bank accounts and their hopes and expectations.’
Economists across the ideological spectrum noted that the country faces an unusual, if not downright bizarre, situation after the coronavirus.
The Delta variant hobbled growth late this summer, and a flood of government cash caused consumer and business demand to surge while global supply still struggles due to pandemic restrictions.
While hiring has surged, there are still five million fewer Americans working than there were prior to the pandemic, with many appearing to have dropped out of the workforce, at least for now.
Biden on Friday praised the U.S. economy for performing better than the rest of the world, saying it’s largely because of his $1.9 trillion coronavirus relief package and plans for additional spending of roughly $3 trillion
Employers are struggling to find workers despite raising wages. Container ships are stuck waiting to dock at ports, creating empty shelves and long delays for consumers ahead of the holiday shopping season.
‘Inflation is outpacing wage gains and that´s a big problem,’ said Michael Strain, director of economic policy studies at the center-right American Enterprise Institute. ‘It feels like the economy has gotten worse.’
Average gasoline prices have jumped more than 60 percent from a year ago to $3.42 a gallon, according to the American Automobile Association.
The jump has been so swift that Biden last week called on OPEC nations to pump more oil even as he simultaneously called for moving away from fossil fuels to have a zero-emissions economy by 2050.
Republican lawmakers have been effective at hammering Biden and Democrats on the inflation issue.
The Biden administration initially tried to minimize inflation as a problem by calling it transitory, but the consensus by many economists is that it will keep running above the Federal Reserve’s 2 percent annual target until the second half of next year.
Senate Republican Leader Mitch McConnell interpreted the results of Tuesday’s election results as a rejection of Biden’s economic policies.
‘Washington Democrats have super-charged inflation, re-created welfare without work requirements, and made America significantly less energy independent,’ the Kentucky senator said in a Wednesday floor speech. ‘The American people will not stand for this. That’s what voters told Democrats last night.’