Increase In Cost Of Living Economics Essay

Ever since money was introduced as a value to exchange goods, there are advantages as well as disadvantages that can be seen from it. It is undeniable that money is important to every individual. Money has so much power that it can even control society. In economy, money flow happens when a penny is spent on products. Money flow goes from spending, receiving wages to spending again. Money could also be the main factor standards are formed as well as inequality. With all the financial difficulty, individuals could even decide to commit suicide because of the difficulty it brings. As the need of money grows, so does the greed of it. The greed of money could lead an individual to even drown their integrity for bribery and corruption to earn fast buck. The cost of living that is rapidly increasing compared to the income of individual brings many problems to the society. Individual may not be able to obtain their basic needs such as foods, clothes, education, and the like. Parents may not be able to raise-up their children with a comfortable environment. Children may need to help their parents in work just to lighten the burden but affecting their studies. In short for money, money matters.

Increase In Cost Of Living

The cost of living is the average cost of the basic necessities such as shelter, food, clothing, taxes, education, and healthcare. The cost of living is a basic cost for every family. As the cost of living increases, so does the hard work of men. Every government, for the sake of the people, would do their best to maintain an achievable cost of living as years goes by. Inflation is often the main factor in the increase in cost of living. A small degree of inflation as years goes by is healthy for the economy but a large increase in inflation brings negative effect to the society.

Inflation is a result of redistribution of wealth and income at different rates, different sectors. The proportions of the increments at all sectors of production are not the same. Causing some income groups gain during inflation while others to be the losers of inflation. Inflation is always unjust and thus putting economic burden on those who are least able to bear it. As the increments on the income of those who have fixed salaries are never on par with inflation, which means they have to use more of their income to purchase some products and services. Living under these conditions might lead them to a great amount of stress and thus triggering a chain reaction of tragedy like committing suicide, bankruptcy and other social problems. Increase in living cost reduces the purchasing power. Hence, crime rate may increase when an individual is unable to maintain their standard of living as before. Crime offers a way in which impoverished people can obtain material goods that they cannot attain through legitimate means.  Often threat or force can help them acquire even more goods, this induces them to commit violent acts such as robbery, which is the second most common violent crime.  For many impoverished people, the prize that crime yields may outweigh the risk of being caught, especially given that their opportunity cost is lower than that of a wealthier person.  Thus, high living cost could increase crime rates.

One way a large increase in cost of living could affect an individual is to lead an individual into bribery; the heart of corruption. The increase in cost of living creates difficulty to an individual from achieving a standard of living. An individual who goes into act of receiving bribery finds himself fast cash to achieve his standard of living. With Malaysia as the 59th country out of 180 countries in corruption in 2009, there is no doubt an individual would fall into bribery easily. Bribery has been an option during inflation because of the easy way out of not getting caught by the authorities and the lack of political will in implementing effective anti-corruption measures.

Increase in costs of living does not only burden citizens’ lives but also leads to an increase in mental health problems. It is not surprising that these problems are the main cause of alcohol abuse, commitment of suicide and mental illness. This increase in costs of living reduces individuals’ spending powers which affect negatively the economy and business. Thus, the businesses are not able to employ as much as they did and unemployment will be raised. People tend to commit suicide due to debts and unemployment because they are not able to support their lives. For example, inflation in India has caused formers to commit suicide as they faced the brunt of increase in cost of living and were bearing heavy debts said by Senior Bharatiya Janata Party leaders. Due to inflation, they were forced to pay more such as interest of loans for production which led them to earn lesser or even make losses on their investment.

Critical Thinking

In order to survive in the midst of increase in cost of living and without falling into corruption, we should find a way to live with lower living cost. At this point, a lot of discoveries and researches about what are happening in the money market had been made where it tells the community the flow of the money. 

One of the recommended solutions for this particular issue is to calculate the exact monthly income. This might be simple for people in varies jobs as it is consider a need in order to survive in this ever evolving world. One should always use wise estimation to ensure accuracy of the calculation in their monthly income. After calculating the monthly income, it is recommended to list all the planned expenses as it is very important to be accurate and comprehensive especially for those irregular income and the big spenders.

Besides that, creating a budget and account could help big spenders to actually decrease their daily expenses and minimize their living cost. Bank account should be organised for the ease of use as this will help to automate the money.

Another way to survive in this crisis would be try to live with the money that’s leftover. Throughout the months you spent your money, you will know where your balance is on any given day, and will only be spending your money on the items you’ve pre-determined to be acceptable in order to optimize the living cost.

Limitations

In an economy where knowledge is the most valuable commodity a person and a country have to offer, the best jobs will go to the best educated – whether they live in the United States or India or China. – US President Barack Obama, Washington D.C. (July 25th, 2009). The number jobs currently that one can secure without the education are scarce. Uneducated parents may have negative effects on the development of their next generation. Uneducated adults have a hard time finding jobs, as they do not know workers’ rights and being secure in a job.

Lack of education combined with a low income influences all aspects of a child’s life, including her physical, psychosocial health. The quality of child care available to low income families is totally not complete than that available to higher income families, and the quality of the child care affects the child’s development. Children raised under the influence of socioeconomic struggles tend to have socioeconomic struggles themselves as adults. This is because a child in a low-income living situation often is more likely to start working younger and is less likely to pursue higher education as an adult. This will limit promotional opportunities and growth in the workplace. High quality, center-based care is expensive and is simply not an option for many low income families. Instead, they turn to informal, sometimes unregulated child care.

Corruption in Malaysia is dominant in many conduct, it has turn worse. It has permeated all fields and levels, it has also shaken the country’s foundation and threaten the national security. Due to lack of cohesive approach by government agencies, private sector and the civil society to curb graft, undeniable there is several weaknesses in government’s effort to battle corruption.

As the government had not effectively addressed the root cause of corruption and its agencies suffer from redundancy and lack of focus, thus, the public no longer believe that the government is serious in handling corruption. In addition, the government is trying to ignore anti-corruption framework for example the National Integrity Plan, on the other hand, it provides comprehensive long term framework in strengthening integrity and combating corruption.

Overall, corruption is viewed by most Malaysians as a very serious problem. However, the public is evenly split as to the extent that it affects their personal life. More critically, public belief in the effectiveness of institutions in the front line of the fight against corrupition – the media, police, the anti corruption commission, the prime minister or the judiciary, was tepid, majority of them believe that any one of them were less effective . If the authorities keeps denying and trying to trivalising the problems, just like how crimes are dealt, anti-corruption would remain only an idle ideal.

Conclusion

There are many ways one can do in order to cope with the ever changing increase of living cost. We may think increase in living cost is normal but to some others, it may be chaos. A wise man once said “money is the root of evil”. Money should never be the master of anyone. Money is should be spent wisely for the good and the necessary. If you’ve ever dreamed about becoming a millionaire, or even just being financially stable, you need to teach yourself how money works and how you can best use it to reach your goals. Money is a tool to be used to accomplish the things you want in life and if no one has ever taught you about it before, the responsibility is now on your shoulders.