Editorial: Gas is cheaper this Memorial Day. So why does your wallet still feel lighter?
You pull into the gas station, surprised to see a $3.49 pump price staring back at you. That's cheaper than last summer. So why doesn't it feel like a win?
Maybe because inside the grocery store, the steak for your Memorial Day cookout costs $16, and it wasn't even a pricey cut. And the soda aisle? A 12-pack costs $9. So the tank might be full, but the wallet still feels empty.
Memorial Day is synonymous with cookouts and time spent outside — or in the garage, if you're a Chicago suburbanite. This weekend is our bridge to summer.
For a long time, the big decision for Memorial Day was whether to stay home or hit the road to take advantage of the extra day off. The open road still calls Americans; AAA anticipates 39.4 million drivers will have traveled by car across the U.S. this holiday weekend and more will plan to travel in coming weeks as the kids gets out of school.
Gas may be down, but AAA shows domestic flights today are 2% pricier versus 2024, when they hardly were cheap. So with prices rising across the board, many families now have to weigh whether travel is worth the squeeze.
Many of us will have chosen a nice Monday gathering with friends and family. But sirloin steak is up 13% this year. Hosting a group of eight might cost you $30 more than it did last May. Add soda, chips, and burgers, and your backyard barbecue is suddenly flirting with triple digits — and that's before dessert.
Restaurant dining on a road trip isn't cheap, either. Eating out costs are up 3.9%, and while the spike has come down from its peak, diners still notice a hefty increase on their bills. At some restaurants, the price spike is even more obvious.
Take IHOP, once a reliable budget option: A milkshake now costs $7.99, up from $3.99 five years ago. The Two x Two x Two meal? It jumped from $5.49 in 2020 to $12.59 today, according to FinanceBuzz.
And that's just the food. We don't make decisions about travel in isolation, we consider our ability to afford a trip. Other unavoidable costs —such as child care, which rose about 6% last year, and car insurance, up more than 20% — are taking even bigger bites out of household budgets and making it harder to justify expensive travel plans.
It's not just higher prices — it's weaker buying power. Wages lagged inflation in 2021 and 2022, meaning people earned more but could afford less. Only recently have paychecks begun to stabilize.
According to government data, the average worker's pay in April 2024 was about 4% higher than it was a year earlier.
But once you factor in inflation, that boost disappears. In 2021 and 2022, prices rose so fast that paychecks couldn't keep up, meaning people could actually buy less even if they were earning more. Lately, because inflation has slowed, take-home pay is holding steady or rising slightly — but most people still haven't fully caught up.
Until real wages consistently outpace inflation — and the cost of essentials stabilizes — it will continue to feel like 'everything's more expensive' even if paychecks are technically bigger.
This helps explain why people are eating out less and cutting back on nonessentials.
A recent KPMG survey found that nearly 4 in 10 consumers reported a decline in household income (double last year's finding) and 70% of respondents said they believe a recession is likely soon. Overall, the survey showed people plan to spend about 7% less on restaurants this summer, looking for ways to cut back costs.
Still, KPMG's analysis shows Americans are still planning to travel this summer — and at an even higher clip than last year. That's the good news, and maybe it means that while we're tightening our belts at the moment, we're all hopeful that things won't stay this way forever.
We've likely seen the peak of inflation. But not the peak of pain. Until wages rise faster than prices — and stay ahead — Americans won't feel like they're getting anywhere. This summer may be cheaper at the pump, but economic pressure still rides shotgun.
Submit a letter, of no more than 400 words, to the editor here or email letters@chicagotribune.com.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Miami Herald
3 hours ago
- Miami Herald
Tony Robbins sends strong message to Americans on 401(k)s
Many Americans preparing for retirement through savings and investments often encounter significant financial hurdles as they work toward a secure and enjoyable future. They eventually come to realize that while Social Security provides a foundational stream of income, it was never designed to fully support every cost of living throughout the entirety of retirement. According to renowned motivational speaker and author Tony Robbins, although 401(k) plans offer valuable opportunities, workers frequently encounter scenarios that could jeopardize their long-term financial well-being. Don't miss the move: Subscribe to TheStreet's free daily newsletter Regularly contributing to retirement accounts that offer tax advantages - such as 401(k) plans and Individual Retirement Accounts (IRAs) - is a smart financial strategy. Taking full advantage of these contributions, particularly with regard to 401(k) plans when an employer match is available, can greatly enhance retirement savings over the long term. Robbins has emphasized the importance of financial awareness when it comes to retirement planning. One of his key messages is a warning to American workers regarding misconceptions about Social Security and 401(k) plans. Related: Jean Chatzky sends strong message to Americans on Social Security A crucial part of effective retirement planning certainly involves understanding how Social Security benefits are determined and carefully choosing when to begin claiming them. By postponing benefits beyond one's full retirement age, retirees can receive higher monthly payouts from the program. Considering this background, Robbins highlights a critical caution about how 401(k) plans are used - urging workers to avoid common pitfalls that could affect their financial futures. Tony Robbins points out that for three decades, companies managing 401(k) plans were not required to reveal how much they were charging in fees. Now that disclosure is mandatory, he believes many providers hide those costs in lengthy, complex documents - making it hard for individuals to truly grasp what they're paying and keeping them largely uninformed. "What the majority of Americans don't realize is that an increase in 1% in fees will cost you 10 years in retirement income," Robbins wrote. More on retirement: Dave Ramsey offers urgent thoughts about MedicareJean Chatzky shares major statement on Social SecurityTony Robbins has blunt words on IRAs,401(k)s Robbins uses a straightforward hypothetical scenario to underscore the long-term impact of investment fees on retirement savings. In his example, three employees - let's call them Employee 1, Employee 2, and Employee 3 - each invest $100,000 at age 35 into separate mutual funds. All three investments generate the same steady annual return of 8%, and none of them withdraw any funds for 30 years. However, each employee is subject to a different annual fee: 1%, 2%, and 3%, respectively. By the time they reach age 65, Robbins clarifies, the variation in fees has created a striking difference in their account balances. Despite identical contributions and returns, Employee 1, who paid the lowest fee, has nearly double the retirement savings of Employee 3, who paid the highest. Related: Dave Ramsey sends strong message to Americans on Medicare Robbins emphasizes that the cost of high investment fees doesn't end at retirement. Using the scenario of each employee needing $60,000 annually to fund their retirement, he notes that the long-term consequences become even clearer. The employee facing the highest fees - Employee 3 - depletes their savings before reaching 75, while Employee 1, who paid the lowest fees, sees their nest egg last until age 95. According to Robbins, this stark contrast demonstrates how even small differences in fees can compound into significant financial disparities. It's a powerful reminder, he says, that being mindful of investment costs isn't just a matter of saving money - it's a crucial step in safeguarding long-term financial security. "I learned about these abuses while writing 'Money: Master the Game,' and it made me so angry that people were getting robbed blind," Robbins wrote. "So I brought in America's Best 401(k)." America's Best 401(k) is a retirement plan provider that says it aims to reduce the high fees commonly associated with traditional 401(k) plans. Robbins asked the firm to asses the 401(k) plan used by his own research company and ended up using their proposed solution. "They showed me that we were paying 276% more than we needed to for the same exact stocks," Robbins wrote. "It saved my employees $5 million in their retirement, and it cost nothing." Related: Shark Tank's Kevin O'Leary warns Americans on 401(k)s The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Newsweek
3 hours ago
- Newsweek
Justice Jackson Warns of 'Reputational Cost' to Supreme Court After Ruling
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Supreme Court Justice Ketanji Brown Jackson criticized the majority's ruling in a case over fuel providers challenging the Environmental Protection Agency's (EPA) approval of California's vehicle emissions regulations, writing in a Friday dissent that the decision comes at a "reputational cost" for the court, according to documents reviewed by Newsweek. She added that the decision gives "fodder" to the perception that "moneyed interests, enjoy an easier road to relief in this Court than ordinary citizens." Why It Matters In a 7-2 decision, the Supreme Court reversed the D.C. Circuit and sided with fuel producers, ruling they have Article III standing to challenge the EPA's approval of California's vehicle emissions regulations. California's regulations "require automakers to limit average greenhouse-gas emissions across their vehicle fleets and manufacture a certain percentage of electric vehicles," the lawsuit reads. Several fuel producers sued the EPA over its approval of California's regulations, arguing the agency exceeded its authority under the Clean Air Act by approving regulations that target "global climate change rather than local California air quality problems." Jackson's dissent raised concerns about public perception of favoritism and the court being swayed by powerful interests. Confidence in the Supreme Court has steadily declined for decades, with 47 percent of Americans viewing the court favorably and 51 percent unfavorably, according to a 2024 Pew Research Center survey. In 1987, 76 percent held a favorable view, while just 17 percent viewed the court unfavorably. Supreme Court Justice Ketanji Brown Jackson at her Senate confirmation hearing on Capitol Hill on March 22, 2022. Supreme Court Justice Ketanji Brown Jackson at her Senate confirmation hearing on Capitol Hill on March 22, 2022. AP Photo/Carolyn Kaster What To Know In Diamond Alternative Energy v. Environmental Protection Agency, Justice Brett Kavanaugh issued the majority opinion, joined by Justice Elena Kagan, one of the court's liberals, holding that fuel producers have standing to challenge the EPA's approval of the California regulations. In her dissent, Jackson called out the majority's application of "standing doctrine," writing that "When courts adjust standing requirements to let certain litigants challenge the actions of the political branches but preclude suits by others with similar injuries, standing doctrine cannot perform its constraining function." She argued that "Over time, such selectivity begets judicial overreach and erodes public trust in the impartiality of judicial decision making." Jackson's dissent says the court is "setting us down that path." "I worry that the fuel industry's gain comes at a reputational cost for this Court, which is already viewed by many as being overly sympathetic to corporate interests," she said later in the opinion. Jackson argues that this perception, and even a mere "'appearance' of favoritism, founded or not," can undermine public confidence in the highest court. Justice Sonia Sotomayor also dissented, filing a separate opinion and not joining Jackson's. What People Are Saying Jonathan Adler, a professor at Case Western Reserve University School of Law, told NBC on Friday: "I don't think this case is an example of the court being inconsistent or somehow more favorable to moneyed interests than other sorts of interests. It's not like the court has closed the door on environmental groups." Supreme Court Justice Brett Kavanaugh wrote in the majority opinion: "Justice Jackson separately argues that the Court does not apply standing doctrine 'evenhandedly'...A review of standing cases over the last few years disproves that suggestion." Beth Milito, vice president of the National Federation of Independent Business' Small Business Legal Center, which filed an amicus brief in the case, said in a Friday press release: "Small businesses have the right to challenge overreach by government agencies and seek relief from harmful regulatory actions. The D.C. Circuit's opinion set an unreasonable standard for plaintiffs to prove that the court can remedy their injury. This would have made it nearly impossible for indirectly regulated parties to challenge regulating agencies. NFIB applauds the Court for reversing the lower court's opinion and ensuring that small businesses have a clear course of action and a fair chance at proving that the court can provide suitable relief." Kristen Waggoner, president and chief counsel of Alliance Defending Freedom, who filed an amicus brief in the case, said Friday on X (formerly Twitter): "The ruling in Diamond Alternative Energy v. EPA has significant implications beyond just environmental SCOTUS ruling will help plaintiffs, like these churches, hold the government accountable when its regulations have the downstream effect of violating their fundamental rights. An important win." What Happens Next The Supreme Court is expected to release a slew of opinions in the coming weeks, with the term scheduled to end in late June.
Chicago Tribune
4 hours ago
- Chicago Tribune
Senate parliamentarian deals blow to GOP plan to gut consumer bureau in tax bill
WASHINGTON — Republicans suffered a sizable setback Friday on one key aspect of President Donald Trump's big bill after their plans to gut the Consumer Financial Protection Bureau and other provisions from the Senate Banking Committee ran into procedural violations with the Senate parliamentarian. Republicans in the Senate proposed zeroing-out funding for the CFPB, the landmark agency set up in the aftermath of the 2008 financial crisis, to save $6.4 billion. The bureau had been designed as a way to better protect Americans from financial fraud, but has been opposed by many GOP lawmakers since its inception. The Trump administration has targeted the CFPB as an example of government over-regulation and overreach. The findings by the Senate parliamentarian's office, which is working overtime scrubbing Trump's overall bill to ensure it aligns with the chamber's strict 'Byrd Rule' processes, signal a tough road ahead. The most daunting questions are still to come, as GOP leadership rushes to muscle Trump's signature package to floor for votes by his Fourth of July deadline. Sen. Tim Scott, R-S.C., the chairman of the Banking Committee that drafted the provisions in question, said in a statement, 'My colleagues and I remain committed to cutting wasteful spending at the CFPB and will continue working with the Senate parliamentarian on the Committee's provisions.' For Democrats, who have been fighting Trump's 1,000-page package at every step, the parliamentarian's advisory amounted to a significant win. 'Democrats fought back, and we will keep fighting back against this ugly bill,' said Sen. Elizabeth Warren of Massachusetts, the top Democrat on the Banking Committee, who engineered the creation of the CFPB before she was elected to Congress. Warren said that GOP proposals 'are a reckless, dangerous attack on consumers and would lead to more Americans being tricked and trapped by giant financial institutions and put the stability of our entire financial system at risk–all to hand out tax breaks to billionaires.' The parliamentarian's rulings, while advisory, are rarely, if ever ignored. With the majority in Congress, Republicans have been drafting a sweeping package that extends some $4.5 trillion tax cuts Trump approved during his first term, in 2017, that otherwise expire at the end of the year. It adds $350 billion to national security, including billions for Trump's mass deportation agenda. And it slashes some $1 trillion from Medicaid, food stamps and other government programs. All told, the package is estimated to add at least $2.4 trillion to the nation's deficits over the decade, and leave 10.9 million more people without health care coverage, according to the nonpartisan Congressional Budget Office's review of the House-passed package, which is now undergoing revisions in the Senate. The parliamentarian's office is responsible for determining if the package adheres to the Byrd Rule, named after the late Sen. Robert Byrd of West Virginia, who was considered one of the masters of Senate procedure. The rule essentially bars policy matters from being addressed in the budget reconciliation process. Senate GOP leaders are using the budget reconciliation process, which is increasingly how big bills move through the Congress, because it allows passage on a simple majority vote, rather than face a filibuster with the higher 60-vote threshold. But if any of the bill's provisions violate the Byrd Rule, that means they can be challenged at the tougher 60-vote threshold, which is a tall order in the 53-47 Senate. Leaders are often forced to strip those proposals from the package, even though doing so risks losing support from lawmakers who championed those provisions. One of the biggest questions ahead for the parliamentarian will be over the Senate GOP's proposal to use 'current policy' as opposed to 'current law' to determine the baseline budget and whether the overall package adds significantly to deficits. Already the Senate parliamentarian's office has waded through several titles of Trump's big bill, including those from the Senate Armed Services Committee and Senate Energy & Public Works Committee. The Banking panel offered a modest bill, just eight pages, and much of it was deemed out of compliance. The parliamentarian found that in addition to gutting the CFPB, other provisions aimed at rolling back entities put in place after the 2008 financial crisis would violate the Byrd Rule. Those include a GOP provision to limit the Financial Research Fund, which was set up to conduct analysis, saving nearly $300 million; and another to shift the Public Company Accounting Oversight Board, which conducts oversight of accounting firms, to the Securities and Exchange Commission and terminate positions, saving $773 million. The GOP plan to change the pay schedule for employees at the Federal Reserve, saving $1.4 billion, was also determined to be in violation of the Byrd Rule. The parliamentarian's office also raised Byrd Rule violations over GOP proposals to repeal certain aspects of the Inflation Reduction Act, including on emission standards for some model year 2027 light-duty and medium-duty vehicles.
