Inflation Hits Home

According to Forbes Magazine, San Jose boasts the highest cost of living of any major metro region in the country.

If you've been to the grocery store or stopped at a gas station recently, you know that prices are headed higher still. Inflation indexes released today revealed big jumps in the prices of energy and food in March, leading to the second-largest monthly increase in wholesale inflation since 1975 (the largest increase was last November).

Apparel prices were down, though. Food, gas, housing and healthcare may all be unaffordable, but at least you can buy new clothes!

Here are the price increases for major household budget items since 2000[1] (not including the last couple months):(Continued...)
Healthcare costs lead the pack; in the past seven years, insurance premiums have more than doubled, up 110 percent. Gas isn't far behind, with an 86% increase (and the price is rising so fast that that's already out of date). Childcare is incredibly expensive; the average annual cost at a center for one preschooler is $10,200. Even food -- which has historically been cheap in the U.S. -- has started to shoot up. And then, of course, there's housing (see yesterday's blog post on the thankless tradeoff of renting vs. owning.)

The cost of living is rapidly becoming a worldwide problem. In recent months, the costs of basic necessities have been rising rapidly in international markets, leaving millions of people without enough to eat. Escalating prices for staple foods including wheat, rice, corn and soy are crating a global food crisis.

Here in the U.S., wobbly financial markets, overstretched banks and bankrupt mortgage companies are still getting more attention. But given the choice between a starving family or a Bear Sterns shareholder -- which one is more in need of government aid, and which one should be left to the mercies of the free market?




[1] Data from multiple sources. Food cost is an average for the U.S., based on USDA Moderate-Cost Food Plan. Health care cost is an average for California, based on worker's share of premium for job-based family health coverage. Electricity cost is based on residential rates in the PG&E service area. Gasoline cost is for regular unleaded in the SF-Oakland-San Jose metro area. All other items are based on costs in the Silicon Valley region. Housing costs reflect only the trend through 2006, as 2007 data is not available. Childcare cost reflects the trend from 1998-2006 as costs for 2000 and 2007 were not available.

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Child Care Costs Skyrocket for Valley Families

Are families with kids being priced out of Santa Clara County?

A new report by the California Child Care Resource & Referral Network reveals that the average cost of care for one preschooler in the county is up to $10,597 per year, a 45 percent increase since 2001. Working parents are increasingly hard pressed to keep up with the cost (have you gotten a 45% raise recently?)

The first five years of a child's life are a time of critical intellectual, emotional and physical development. They learn to walk, talk, explore their world and interact socially with adults and other children.

Quality care and early childhood education may be the single most important investment we can make for our community's future. Research overwhelmingly shows that early education is critical to children's success in school and later on in life. Yet right now, kids, parents and providers are all suffering from the under-resourcing of child care and early education.

The cost for infant or toddler care is even further out of reach: $14,454 per year. A minimum wage earner working full-time makes just $15,600 per year. There's simply no way most low-wage workers can afford the market rate for quality child care.

Ironically, the people who are providing care and early education for our youngest kids are themselves in the ranks of low-wage workers. The median wage for child care workers in Silicon Valley is $11.41/hr. No wonder we've got such a shortage of child care (only 50,551 available slots for 195,871 kids, according to the Resource & Referral report.)

Over the next year our region will be making critical decisions about economic development, public budgets, and investments. A key topic in those discussions needs to be figuring out how to make early education work for all kids, parents, and providers.

[ Continue reading Child Care Costs Skyrocket for Valley Families ]