Market power: Market power refers to the influence that a firm or group of firms holds over the pricing and quantity of a product or service in a given market.
This influence allows them to adjust prices or wages without a significant impact on their customer base or workforce.
Factors contributing to market power include limited competition, entry barriers, mergers and acquisitions, and innovation.
Notably, the Institute for Public Policy Research found that corporate profits have surged by 34% since the start of the COVID-19 pandemic, with the top 25 multinationals accounting for 90% of these gains.
A concerning trend is the growing market concentration observed in many sectors in recent decades.
What are the effects of the cost of living crisis?
The cost of living crisis has a profound impact on individuals, households, businesses, and society overall. It leads to several significant effects that affect various aspects of our lives.
Poverty: Poverty refers to the inability to meet basic needs and maintain a minimum standard of living.
It encompasses hunger, malnutrition, ill health, limited education, and lack of opportunities. Poverty can be assessed through indicators such as income, consumption, or the multidimensional poverty index.
According to the United Nations Development Programme, rising global food prices, and energy prices have pushed 71 million people in developing countries into poverty.
The prevailing cost of living and energy crisis may further exacerbate the plight of the existing impoverished population. Explore more about poverty and its impact on individuals and societies.
Inequality: Income inequality refers to the uneven distribution of wealth, opportunities, and income within a society.
It signifies that certain individuals or groups have more resources and enjoy better living conditions. There are several indicators, such as the Gini coefficient, Palma ratio, and human development index, that help measure inequality.
Unfortunately, the COVID-19 pandemic has exacerbated inequality, with the top 10% capturing 52% of global income growth in 2020.
Additionally, the cost of living crisis may further widen the gap between the rich and the poor.
Social unrest: Social unrest refers to the collective expression of dissatisfaction or discontent with the existing social order or policies.
It can manifest in various ways, including protests, strikes, riots, or acts of violence. contributing to social unrest may include economic hardship, political repression, social injustice, or environmental degradation.
According to The Guardian, many countries worldwide have experienced social unrest due to the rising cost of living crisis.
People are taking to the streets to demand lower prices, higher wages, and improved services.
How can you cope with the cost of living crisis and save money?
To address the cost of living crisis, both governments and businesses must take action.
However, individuals and households can also proactively manage rising energy costs and save money.
Here are some practical tips to help you cope with expenses and improve your financial situation.
Budget wisely: Budgeting is a crucial process that involves planning your available funds and allocating them to different expense categories.
By effectively managing your finances, you can avoid debt and overspending.
There are various tools available, including spreadsheets, apps, or even envelopes, to assist you in budgeting.
Start by diligently tracking your income and expenses for a month. Then, set realistic goals and limits for each category.
Regularly review your progress and make adjustments as necessary to stay on track.
Shop smartly: Smart shopping involves purchasing products and services that provide excellent value for money and quality.
It not only helps save money but also reduces resource wastage.
To shop smartly, you can employ different strategies like price comparisons, searching for discounts and coupons, buying in bulk or during specific seasons, opting for generic or store-brand items, and considering second-hand or refurbished goods.
By adopting these smart shopping practices, you can make the most of your money while minimizing waste and maximizing value.
Conserve energy: Energy conservation involves using less electricity, gas, or fuel for your household or transportation needs. It not only helps you save money on energy bills but also reduces your environmental impact.
There are several methods to conserve energy, such as turning off appliances when not in use, switching from incandescent bulbs to energy-efficient LED ones, installing insulation or solar panels, adjusting thermostat and water heater settings, energy usage, and opting for public transport or carpooling.
Meet Angela, one of our writers focusing on AI technology. She is an experienced journalist and researcher with a passion for all things AI.
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