[The Editors' Verdict] The Age of '○○flation': Proactive Livelihood Policies Needed

Lunchflation, Noodleflation, Cupbapflation, Chickenflation, Milkflation, Coffeeflation, and so on...

It is truly a flood of '○○flation' terms. As inflation (price increases) intensifies, new words with the suffix "flation" are being coined almost daily.

The representative term is Lunchflation. It is a compound of lunch and inflation, referring to the increased burden of lunch expenses for office workers due to rising prices. This term emerged as the global supply chain became unstable due to COVID-19 and Russia's invasion of Ukraine, causing prices of key food ingredients like wheat and cooking oil to skyrocket, which in turn raised dining-out prices.

Derived terms include Noodleflation, which reflects the burden of a bowl of noodles surpassing 10,000 won; Cupbapflation, coined by public service exam candidates feeling the impact of soaring cupbap prices; Chickenflation, which arose with the dawn of the 20,000 won chicken era earlier this year; and Putinflation.

Recently, Milkflation, a compound of milk and inflation, has also appeared. Milk is widely consumed on its own but is also the main ingredient in various dairy products such as formula, cheese, and ice cream, and is heavily used in making bread and coffee. Consequently, when milk prices rise, the prices of formula, cheese, and ice cream also increase, and this acts as an upward factor for bread and coffee prices. Hence, the term Coffeeflation has emerged as well.

○○flation can be seen as a kind of social phenomenon arising from the tightening of household budgets due to rising prices. The problem is that this parade of new terms is expected to continue for the time being.

Although the inflation trend has somewhat slowed, there is no sign of prices dropping from their elevated levels. The inflation rates were 6.3% in July, 5.7% in August, 5.6% in September, 5.7% in October, and 5.0% in November. Over the past three years, the annual consumer price inflation rates were 0.4% in 2019, 0.5% in 2020, and 2.5% last year. Up to November this year, the consumer price index rose 5.1% compared to a year earlier. If this continues, the annual inflation rate for this year will certainly be in the 5% range.

The real income of salaried workers has also decreased the most in 13 years since the financial crisis in 2009. According to an analysis of microdata from the Statistics Korea Household Trends Survey commissioned by Rep. Kim Hoe-jae of the Democratic Party to the National Assembly Legislative Research Office, real income for salaried workers in the third quarter of this year fell by 5% compared to a year earlier, as income growth failed to keep pace with rising prices.

Rep. Kim and economic experts expect that the complex economic crisis caused by high exchange rates, high prices, high interest rates, sluggish exports, and corporate insolvency will intensify from next year, making it difficult for the downward trend in real income to reverse easily. Therefore, there is a growing call to boost the economy through fiscal investment to stimulate domestic demand.

Real income is decreasing, and household finances are becoming tighter. The government must consider the suffering of the people amid the flood of ○○flation terms. It is time to demonstrate genuine concern for the public through proactive livelihood policies.

Kwangho Lee, Head of Distribution Economy Department.

This content was produced with the assistance of AI translation services.