Most Americans under the age of 40 are experiencing something they haven’t before; inflation. With the exception of a brief period at the beginning of the Great Recession in 2008, inflation has been restrained for nearly four decades. That means prices rising at a pronounced rate in a short amount of time is a new experience for many Millennials and members of Generation Z.
There are several contributing factors to the recent and sustained increase in prices. Though there are more academic ways of explaining how inflation works, a simple definition is “too many dollars chasing too few goods.” The sudden reopening of the economy following the initial shock of the pandemic, combined with government stimulus efforts, labor shortages, and the struggles of the global supply chain to keep up – creating scarcity of some products – are all contributing factors to the current surge in prices.
The impact of inflation and scarcity is not going unnoticed by young Americans. A recent survey by Junior Achievement and research firm ENGINE Insights found that 75 percent of teens have noticed changes during recent shopping experiences, including higher prices (49%), harder-to-find items (47%), and fewer checkers/less help at stores (32%).
From a financial literacy standpoint, these hopefully short-term economic realities present a teachable moment. There’s an old saying, “People fear what they don’t understand.” And while this doesn’t mean that today’s inflation shouldn’t be a cause for concern, as anyone who experienced the double-digit stagflation of the 1970s can attest, the factors contributing to today’s price increases are different than those of the past. Fostering a greater understanding of basic economic concepts among our young people will help them put their concerns into proper context.
To help achieve this, Junior Achievement delivers financial literacy learning experiences to young people in communities across the country with the support of business leaders, educators, and volunteers. Financial literacy is one of three educational pathways promoted by Junior Achievement, along with work- and career-readiness, and entrepreneurship. JA’s approach to these subjects has been shown to positively impact students' knowledge, attitudes, and competencies related to these essential life skills. A 2020 study by research firm Ipsos shows that JA alumni credit Junior Achievement for helping them have a better understanding of how money, business, and careers work.
To learn more about how you can be part of these “teachable moments,” please contact Junior Achievement in your community at www.JA.org/Locations.