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The trap of the "nominal" standard of living
When prices rise by 5–10% per year, but your income only grows by 3%, you are becoming poorer even if you are nominally making more money. This is the most dangerous illusion: we feel richer because we see a salary increase, but we ignore the rising costs of basic needs.
This creates a false sense of security that "everything is fine." In reality, you are gradually downgrading your quality of life, switching to cheaper alternatives.
If your income does not outpace the real inflation of your goods basket, you are downshifting without even realizing it.
#income #realincome