All Press Releases for March 18, 2016

The Chapwood Index

Chapwood Index proves underreporting the Consumer Price Index is killing the middle class.

    ADDISON, TX, March 18, 2016 /24-7PressRelease/ -- The Chapwood Index released its full year 2015 report today, which shows the true cost-of-living increase in America. Updated and released biannually, the Index reports the unadjusted price fluctuation of the top 500 items on which Americans spend their after-tax dollars in the nation's top 50 major metropolitan cities. In addition, the Chapwood Index released the previous 5-year average cost of living increase for each of the 50 major cities in the United States.

The report proves what most American's have already been feeling. According to the Chapwood Index the true cost of living increase in America is 6.5 times higher than government-reported BLS CPI. The report proves the CPI does not truly reflect real life price increases that impact all American's and sadly this hurts the middle class the hardest since most people in that income bracket see their salary increases from their employer tied to that government report. According to the BLS, prices rose on average 1.54 % a year for the previous 5 years; however, the Chapwood index says that when you include everything most American's spend money on including tax increases and insurance (which CPI doesn't include) the average cost of living increase over the previous 5 years is 10% The Chapwood Index again explains why the middle class is falling behind.

"Individual purchasing power is sinking in quicksand and people are unable to maintain their current lifestyles year over year and the velocity of this suppression is increasing at such a rapid rate that within 5 years most middle class workers find themselves with a 40 percent decrease in purchasing power. The key to highlight and remember is that if your salary INCREASE is tied to a statistic that doesn't accurately reflect your true cost of living increase, it is impossible for you to maintain a constant standard of living year over year. It's about time someone does something about this tragedy and stands up to explain why people are falling behind each year. This is why I created the Chapwood Index." said Ed Butowsky, index founder.

The goal of the index is to shine a true light on a slow moving virus that is destroying the economic and emotional fiber of most American's and giving them the opportunity to become more educated on why each year becomes more difficult than the previous to make ends meet.

Over the past 5 years (2011-2015), San Jose, California experienced the greatest cost of living increase, with an average annual increase of 13.24% per year. In fact, California cities saw the 8 highest cost of living increases from 2011 to 2015, with their average annual increases as follows: Long Beach (12.88%), Oakland (12.86%), San Francisco (12.86%), San Diego (12.60%), Fresno (12.30%), Sacramento (12.00%), and Los Angeles (11.96%). Ed Butowsky, the founder of the Chapwood Index, asserts that the Index should replace the Consumer Price Index (CPI) when consumers look for an accurate measure of their true cost of living increase.

The Chapwood Index exposes why middle-class Americans - salaried workers given routine pay hikes and retirees dependent on annual increases in their corporate pensions and Social Security Payments - are consistently failing to maintain their standards of living. Such sources of income are pegged to account for inflation rates; specifically the rates reported as the Consumer Price Index (CPI) by the Bureau of Labor Statistics. However, as the Chapwood Index exposes, the conventional inflation measure of Consumer Price Index no longer reflects the true cost of living in America - leaving millions of middle class families unable to keep up with their expenses. Salary and benefit increases are pegged to the Consumer Price Index (CPI), which for more than a century now has purported to reflect the price fluctuations for the typical "basket of goods" in American cities. However, the Chapwood Index has demonstrated that the CPI no longer reflects the true cost of living increase in America today - and hasn't for more than 30 years.

The middle class has seen its purchasing power decline dramatically in the last three decades, forcing more and more consumers to seek entitlements when their savings dry up. As long as pay raises and benefit increases are tied to the false, deflated statistic that is the CPI, the decline of the American middle class will endure.

"I have grown weary of observing people committing financial suicide by using this flawed statistic that is universally known to be inaccurate as a benchmark for maintaining a constant standard of living," Butowsky stated.

In 2015 the U.S. national average cost of living rate increased to 9.60% percent. This average national increase was nearly 14 times higher than the Bureau of Labor Statistics' reported 2015 Consumer Price Index (CPI) increase of 0.7%. Over the past 5 years (January 1, 2011 - December 31, 2015), the Chapwood Index found an annual 10.02% increase in cost of living, comparable to the Bureau of Labor Statistic's reported 5-year CPI of 1.50%.

The Chapwood Index solidly supports the notion that the unintended negative consequences of this CPI manipulation has had direct, devastating consequences for many Americans; it can be argued that the middle class has been hurt the greatest. For the 2015 calendar year, the Bureau of Labor Statistics reported a 0.70% increase in the Consumer Price Index. However, in Arlington, Texas, the true cost of living increase was 9.50% for the year of 2015, according to the Chapwood Index. This means that the increase in day-to-day expenses was 13.5 times higher than the standard CPI-pegged salary raise of 0.10%. 2015 was especially bad in Portland, Oregon, where the Chapwood Index showed a 13.40% rise in the cost of living. Even the city with the lowest increase, Mesa, Arizona, showed a 5.90% percent rise; 8.43 times the reported CPI.

Index Methodology: In creating the Chapwood Index, Chapwood's research team compiled a list of over 4,000 products and services that consumers across the country spend money on in their daily lives. That list was narrowed down to the top 500 items that were used most frequently. Fluctuations in the true price for each of those items were carefully tracked and monitored, without any manipulation or biases, quarter-by-quarter and city by city, creating a weighted index based on price. Examples of items included in the Index: Starbucks coffee, Advil, gasoline, taxes, tolls, fast food restaurants, computer paper, toothpaste, oil changes, car washes, pizza, internet service, Gymboree lessons, mobile phone service, cable TV, dry cleaning, movie tickets, hairspray, gym memberships, home repairs, piano lessons, laundry detergent, light bulbs, school supplies, parking meters, pet food, underwear and People magazine.

If you would like more information about this topic, please contact Ed Butowsky at 972-865-2223 or email at [email protected].


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Contact Information

Ed Butowsky
Chapwood Index
Dallas, TX
Voice: 972-865-2223
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