Just the other day it occurred to me how it is that people don't really notice how inflation eats away at their earnings. Now, everyone is vaguely aware of the problem but they don't understand just how it affects them. And I believe I have found the primary reason they don't see it.
In the course of a person's life they work various jobs and in for the majority of people those jobs are more advanced or technical or specialized. This naturally increases their worth to a company, or society if you will, and so their pay increases. So during their life, say from 16 to maybe 45 their pay continually increases because they are a more valuable asset as time goes on, and tho all the while inflation is eating away at their income it is hidden to them due to their naturally increasing worth. So what should be a time of getting ahead and building up a retirement and an inheritance for one's children instead becomes a time of barely increasing income in real terms.
To illustrate:
A man starts work flipping burgers at age 16 in 1978, working at minimum wage. We'll say he worked 40 hours a week. His gross income would have been $5,512
That same man, in his prime at 45 today would make about $40-45,000 (this is about 5-10K higher than the national average) For the following comparison I have used the more generous 45K figure.
From a dollar perspective he makes a tremendous amount more than he did as a youth, but when adds in inflation the change is not so dramatic as one might think. When the 1978 amount is adjusted for inflation it becomes $17,707. Or, looked at another way (holding everything to 1978 dollars), his income went from $5,512 to $14,007.
In terms of dollars his income increased by ~8, but in real purchasing power it increased by less than 3. The man has hardly gotten ahead, but he was able to successfully hide from himself the constant theft by inflation.