Price Increases and Shrinking Potato Chip Bags 💸
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Season 2: Episode 22 Description
In today’s episode: 💰 Hold on to your piggy bank, we are talking about money. Learn what inflation is and the impact on your allowance. 🤑 Correspondent Pamela Kirkland breaks down this price impacting term. 💸 Can the government run out of money? Listen in as we explain what the debt ceiling is and why it is a hot topic in Congress. 🗞️ In the news: Pumpkin shortages and a sword from the deep. 🎃 And test your money knowledge in today's Trivia on the Ten. ✅
Sources for the episode:
debt ceiling - Students | Britannica Kids | Homework Help
House Approves Bill to Avert U.S. Default, Sending It to Biden - The New York Times (nytimes.com)
CDC sends out guidelines for vaccinations of kids 5 to 11 years old | TheHill
900-year-old Crusader sword found off the coast of Israel | CNN Travel
There's a Pumpkin Shortage in the U.S. — What that Means for Halloween | PEOPLE.com
Why Coke Cost A Nickel For 70 Years : Planet Money : NPR
How Much Did Coca Cola Cost When It First Came Out? REALLY (sodapopcraft.com)
Solving the mystery of the 5-cent Coca-Cola. (slate.com)
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TRANSCRIPT:
Bethany Van Delft 0:02
From the rising cost of potato chips to the national debt, hold on to your piggy banks. Today we're talking about money matters. I'm Bethany Van Delft. It's October 21st. And this is The Ten News.
Various Voices 0:19
10, 9, 8, 7, 6, 5, 4, 3, 2, 1
Bethany Van Delft 0:27
Inflation is not just for basketballs and pool floaties. It's the reason prices go up on things we're used to finding for less, or sometimes the price stays the same. But we get less of it. Like when potato chip companies put fewer chips in that same size bag, you think we didn't see that we do. This will not stand. Our correspondent Pamela Kirkland is here to explain what economic inflation is and how it impacts our day-to-day lives.
Pamela Kirkland 0:58
Do you ever hear your parents or older adults talking about how much stuff used to cost? Back in my day, a candy bar was five cents or a dozen eggs used to cost less than $1. So why is that Snickers bar now costing you $1.50? And why does that same carton of eggs cost $4 or $5 today? Well, there are a couple of reasons why that money in your piggy bank doesn't go as far as it used to. It's caused by something called inflation. Inflation is an increase in the price of goods like eggs, or services like a haircut. Economists measure inflation regularly to measure how the country's economy is doing. The change in price is put into a calculator. And from that, we get the rate of inflation. And that's a really important number because it helps determine how much it costs to live. It helps governments decide how much money they need for programs like welfare and Social Security, and shows workers how much they need to ask for when it's time for a pay raise. Right now, Americans are paying more for pretty much everything. Overall consumer prices rose by 5.4% in September. Compared to a year ago, according to the Bureau of Labor Statistics, that's the highest it's been in 13 years. Oh man, the price of cars, furniture, and TVs has increased dramatically. Even the price of shoes is up. Shoe prices increased 6.5% in September compared with the year before prices for kids’ shoes rose almost 12%. Gas prices have soared more than 42% than last year. And with the holidays coming up that means holiday road trips could be more expensive. And when it comes to products, one sneaky way companies will deal with higher prices is with smaller packages. It's called shrink-flation. Are you serious? Instead of asking you to pay more for everyday items, you'll pay the same price but get a little less. That bag of chips may still cost $2.99. But the bag you're paying for may be ever so slightly smaller. But, while you're paying more for groceries at the store, or gas or clothes, there's something else happening. Over time, inflation also reduces the value of the dollar. Let's stick with groceries. If you're paying more for the same groceries you buy every week. That means you have less money to spend on other things you might need too. What's supposed to happen is as inflation increases, wages increase for the money you make it work increases at the same rate as inflation, meaning you're able to keep up with all these price changes. But when the inflation rate increases faster than income, your money doesn't go as far and the value of the dollar slips. Okay, that's bad. So is inflation a bad thing? No. In a stable economy, the rate of inflation can increase one or 2% a year. Totally normal and a good thing. It shows the economy is strong and growing. But, sometimes when the rate of inflation is higher, it can throw the whole economy out of whack.
Bethany Van Delft 4:47
Do you have questions about where things stand with COVID-19? You better believe it! We want to hear from you. Tell us what questions you'd like The Ten News to answer in our next update about the pandemic. Send us your audio at hello@thetennews.com or leave us a voicemail at 877-TEN-NEWS. That's 877 T E N N E W S by October 30th. And you just might hear your question answered on the show. Did you know that the US federal government borrows money to pay its bills? It does. The US spends more on federal programs than what it brings in through taxes. So it borrows from the public or other government agencies like the US Treasury, but it can't just borrow any amount it needs. There is a limit called the debt ceiling. Maybe you've heard the term debt ceiling in the news lately, since Congress had been working to agree on a plan to raise the limit on the national debt by the October 18th deadline. Secretary Janet Yellen alerted lawmakers that the nation will have a debt limit. Some members of Congress want to keep the limit low and over the years, it's become a big debate.
Sound Bit 6:01
Republicans have said they are not going to vote on anything including a government funding bill if a debt limit increase is included.
Bethany Van Delft 6:11
So, can the US government actually run out of money? Well, if the debt ceiling is not increased, the government won't have enough money to pay federal workers salaries or fund federal programs. But don't worry, that's never happened. Whew. The debt ceiling has been raised 98 times since it was first established all the way back in 1917. For now, Congress has agreed to pass a temporary extension to raise the limit by 480 billion, which the Treasury Department estimates is enough to last until at least December 3rd. Now let's see what else is happening.
Bethany Van Delft 6:58
October 26th is a date to have on your calendar. That's when experts at the Food and Drug Administration are planning to meet next week to discuss emergency use authorization for the Pfizer vaccine for 5 to 11-year-olds. If approved, the vaccine will be available in November. An amazing find happened this week in a sea bed near Northern Israel. A diver found a 900-year-old Crusader sword. Crusaders are soldiers who fought in a series of religious wars from 1095 to 1291. The sword is covered in marine life and weighs almost 13 pounds. Could you imagine swinging that thing around? And some scary news ahead of Halloween. Not really. But sort of some pumpkin lovers may have a hard time finding one this year. Some parts of the US are facing a pumpkin shortage due to bad weather, pandemic shipping problems, and a fungus that has wreaked havoc on pumpkin patches. No pumpkin is available in your town? Well, check out our show notes for fun paper designs to dress up your front stoop. Excellent! Lucky you, it's time for...
Various Voices 8:14
What, what, what's the big idea?
Bethany Van Delft 8:17
Trivia on The Ten. From 1886 to 1959, a bottle of Coca Cola sold for just 5 cents. 70 years is a long time for the price of anything to stay the same. Can you guess why coke kept the price the same for decades? Was it a) in order to compete with the price of other fizzy drinks? b) because vending machine technology was very different back then, or c) because the founder of the company liked the sound of nickels being dropped on counters.
Bethany Van Delft 8:59
Did you guess it? The answer is B. Before vending machines were spitting back people's dollars they only took nickels. Coca-Cola owned 80% of the vending machines in the 1950s and wanted to raise the price but not double it. They actually tried to get the US government to start making a seven and a half-cent coin so they could increase the price without increasing the number of coins needed to pay for it. Seriously? Also to thank for keeping coke's price fixed were deals with the bottling companies, low inflation at the time, and the high cost to upgrade vending machines. Today a 12-ounce bottle of Coke costs about $1.35. That's a lot more nickels. Time's up, but before we go, here's a quick note for the grownups. Thanks for listening to The Ten News. Look out for our new episodes on Tuesdays, Thursdays, and extras on Saturdays. The Ten News is a co-production of Small But Mighty Media and Next Chapter Podcasts and is distributed by iHeartRadio. The Ten News creative team is saving their allowance and includes Tracey Crooks, Pete Musto, Andrew Hall, and Nathalie Alonso. Pamela Kirkland contributed to this episode. Our production director is Jeremiah Tittle and our executive producers are Donald Albright and show creator Tracy Leeds Kaplan. I'm Bethany Van Delft, and thanks for listening to The Ten News, sneaky chip holding back companies. I knew there were less chips in those bags.
