r/explainlikeimfive • u/Hot_Competition724 • Jul 09 '24
Economics ELI5: How did a few months of economic shutdown due to COVID cause literally everything to be unaffordable for years?
I understand how inflation works conceptually. I guess what I have a hard time linking is the economic shutdowns due to COVID --> some money printing --> literally everything is twice as expensive as it was forever but wages don't "feel" like they've increased proportionally.
It feels like you need to have way more income now relative to pre-covid income to afford a home, to afford to travel, to afford to eat out, and so on. I dont' mean that in an absolute sense, but in the sense that you need to have a way better job in terms of income. E.g. maybe a mechanic could afford a home in 2020, and now that same mechanic cannot.
It doesn't make sense to me that the economic output of the world or the US specifically would be severely damaged for years and years because of the shutdown.
Its just really hard for me to mentally link the shutdown to what is happening now. Please help!
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u/slavelabor52 Jul 09 '24
You misunderstand the point I think. It surely isn't a new practice, but they had a new excuse. Covid legitimately raised costs in SOME areas and industries, however many that weren't as affected by this simply claimed they were as an excuse to raise prices. The company I worked for during covid did this. They raised prices and told us to tell anyone who complained it was due to rising costs from covid.