The problem with inflationary indexes is that they don't take into consideration real world costs. Consider a comparison in real world costs over the life of our last two contracts:
- The price of electricity has soared, especially out West. However, CFL bulbs -- which sold for an average of $12 each in the early 2000s -- typically cost the consumer about the same as a traditional light bulb but last several times longer & achieve 70-80% energy savings. And any household appliances that have been replaced will acheive significant energy savings -- as much as 90% for modern TVs and computer systems. Thus, the average household is (or should be) spending less on energy than they did before.
- We pay significantly less for more minutes on our mobile phones than we did ten years ago (just watch the text & data charges) -- and phones & networks have become sophisticated enough to replace our landlines. Thus, we pay less for communications.
- High speed Internet is more costly than the AOL dial-up most of us used, but the lack of need for a phone line makes up for the difference. And the Internet has replaced our needs for newspaper & magazine subscriptions, checks, stamps to mail out bills, etc. Internet purchases save us time, money & gas money. And the Internet provides us with free entertainment and premium paid options -- Netflix is less than the cost of two Blockbuster Nights was. The Internet also provides us with the tools to travel cheaper.
- The cost of many major purchases, such as appliances, TVs and computers, has plummeted.
- If you bought a home recently, or are renting an apartment, you're paying about the same - or less - as you would have in 2002. (Some exceptions apply.)
So while yes, we're paying more for food & gas, many of our other financial obligations have dropped. And while yes, cable has increased in cost, if you were paying $30/month for basic cable 10 years ago but $200/month for premium cable with NFL Sunday Ticket, HD, etc. today, you've increased your obligations. And with the transition to digital TV, antenna viewing is better than ever.
My point is... for those (FTers) who claim the $8+ raise they've received over the past two contracts is "barely keeping up with inflation," you're BSing yourself - and the problem is more likely your poor financial habits than anything else.