Wages and Food Prices = Impact Quality of Life

Wages and food cost can impact people lives.

By Vince DelaRosa

Oneida, WI - Over the last year and a half I have heard a lot of people expressing concerns with their wages. Recently, I wrote about how we (Oneida) have a $479,172,033.00  million dollar budget but there is no room for wage increases for the employees. One of my main concerns with stagnant wages is the reduction is peoples buying power. Whether it's gas in the tank or items for the dinner table, everything is going up in prices while wages are flat.

Here is a little eye opening fact regarding minimum wages. Look at the inflation-adjusted value for minimum wages as outlined below: 

For some of us, our grandparents had more spending power earning minimum wage four decades ago, then some of us today, I know that is hard to believe. According to calculations by the Economic Policy Institute, when adjusted for inflation, the minimum wage in 1968 was worth $8.54 per hour. The current minimum wage is $7.25 per hour in Wisconsin.

The value of the minimum wage has risen in the last few years, following a three-year government effort to boost the lowest allowable hourly wage in the United States. The final stage, which took effect in July of 2009, brought the minimum wage up nearly 11 percent to its current rate. These are issue that we have to look at here in Oneida, WI.


Remember, when I did my work on wages issues, which included a GTC petition, we laid the ground work to build a progressive system. Now when revisions to my work came around, I wanted to address some of these matters, but I was never given the opportunity. Today the tribes wage project, which was know as Valiant in 2008, that needs to be revisited. 

Now I will say, we can do as we please with our wages, especially if we could ever get control of spending. In some states for example, there has been mandates that allowed minimum wages to be paid at a higher rate than the national rate. Those are states where they are trying to look out for their people.

But the truth is the value of the minimum wage has not, in the long-term, kept up with rising inflation cost, which boosts what things cost and lowers the value of money. (For more fun with inflation, check out this inflation calculator from the Bureau of Labor Statistics.)

Millions of workers across the country are earning wages at or below the minimum wage, look here for more information: Bureau of Labor Statistics. Its' believed that nearly 5 percent of all hourly paid workers are under paid.

Grocery prices are going up! 

Now with all this said on wages, over the last several years, as you may have noticed, food prices have begun to soar. Not only at high end grocery stores such as Whole Foods but even at chains such as Safeway, Sam’s Club and Costco.

The rise in food coast have been fueled by trends in the global demand for food and the costs involved in supplying it, finding cheap food is becoming almost impossible. That why I think a vibrant Oneida Food Pantry is so needed.

To illustrate the huge jump in food prices, look at commodities cost for items such as wheat and rice. Between 2005 and 2008, average world prices for rice rose by 217%. As it pertains to wheat, the recent droughts and wildfires in Russia caused the government to ban grain exports for the remainder of the year, which in turn caused wheat prices worldwide to spike. Although the recent downturn in the economy took pressure off rising food prices as demand decreased slightly, rising incomes all over the world and increased food consumption, particularly in China and India. This has resulted in a new demand/supply equilibrium: prices have adapted upwards. According to the U.S. Department of Agriculture, food prices are expected to increase by 3% to 4% based on increases in supermarket prices of 2.5 to 3.5 percent.

Increasing food prices can in part be attributable to an increase in the costs of inputs required to produce food such as energy, land, seed and fertilizers. Several years ago, the U.S. and Europe began promoting ethanol research, giving farmers financial incentives to sell corn and other crops for use in biofuels. However, corn ended up being used to try to help cars run more efficiently rather than in the production of food. As a result, there is less corn product to meet customer demands for consumable corn.

Corn is used in so many grocery store foods and is also fed to dairy cows, hens and cattle. The growing demand for the corn crop has sent a ripple effect into every aisle of the supermarket, even in Oneida we feel the pain at the register.

Additionally, the increase in oil prices in recent years, has also affected the way that food is produced and priced. Operating heavy machinery has become more expensive, as has the price of fertilizers and shipping products from one place to another. As production costs increase, commodity prices such as wheat and rice must trade higher to ensure that farmers continue to make a profit. This cost ultimately has to be passed on in the final price of food. Trade also plays a role in rising food prices. In an attempt to give domestic markets a competitive edge, governments are limiting free trade and placing tariffs on imported or exported goods. The ultimate goal is to prevent a food shortage at home but its causing food prices globally to increase by hindering free trade.

Well as you can understand, there are many factors leading to the increase in food prices. Developing nations are making attempts to become self-sustainable and decrease their dependence on foreign food sources. Governments and global organizations are also adjusting ethanol subsidies, tariffs, and trade restrictions to reduce food shortages. On the consumer end, consumers must commit to making changes in their diets so that food distribution can be more equal globally. This is no easy task and one that will take years to achieve, if ever. Honestly, many of these factors probably make no sense to us here, but they do impact us. Just look at the prices at Walmart, Festival or Copps, all going up.

Likewise, when we couple this with shrinking wages, wage freezes and no cost of living adjustments, this can spell out some tough times ahead of us. I think one of the most important issues here in Oneida on issues such as these, we really have to try and re-shape some of our priorities, especially around low to mid-level wages.