Inflation is a common economic term. Have you heard of skimpflation?
NOEL KING, HOST:
Inflation is the highest it's been in 30 years in this country. You've noticed it, no doubt, at the gas station, in the supermarket.
But Greg Rosalsky, who writes the Planet Money newsletter, came up with a word for something else that he has noticed happening in the economy.
GREG ROSALSKY, BYLINE: That word is skimpflation.
KING: Skimpflation - kind of like inflation - also skimpy. Tell me what's going on.
ROSALSKY: Yeah. So it - we all know what inflation is. It's when prices go up. You know, companies charge you more for stuff. Skimpflation is when, instead of simply raising prices, companies skimp on the stuff that they provide. And the effect is, like, kind of just like inflation. You get less for your money.
KING: You know, I would venture to say I've seen this over the past few months. But give me an example that you've seen in the real world.
ROSALSKY: OK, Noel, so a few weeks ago I was out to dinner with my girlfriend. You know, it was a pretty nice restaurant. But it was completely understaffed. And there were, like, two servers scrambling to get dozens and dozens of people their food and drinks. I honestly felt bad for them. There were clearly just, like, not enough servers. And there was no one, you know, bussing tables. And as a result, I saw a bunch of frustrated customers. And it hit me. I've been seeing a ton of examples of this recently.
And I got interested in this and, you know, whether this was a broader trend. And I started looking into it. And sure enough, this kind of decline in service quality is happening all over the place. Domino's is taking longer to deliver pizzas. FedEx is taking longer to deliver packages. Airlines are canceling flights. And then when you, like, call them up to rebook your flight, you might be put on hold for, like, literally hours. There are all these examples of customer service being worse than it used to be.
KING: I feel like flights have always been awful. But I recently got into, like, an asymmetrical war with UPS over a missing mattress.
KING: It went on for months and months. And I eventually lost. But that seemed to me like an example of customer service...
ROSALSKY: Oh, Noel.
KING: ...Just being absolutely wretched. So the places you're describing are in the service economy - fair to say that. Why now? What's driving it in that sector?
ROSALSKY: Well, the short answer, of course, is, you know, like everything these days, it's the pandemic and the knock-on effects of the pandemic. We're hearing about this all the time. Businesses are facing higher material costs, higher energy costs and higher labor costs. There are all sorts of bottlenecks and shortages and expenses. People are, you know, quitting left and right. And there are job openings everywhere. Meanwhile, Americans are spending money like crazy, and businesses are having a hard time keeping up. So skimpflation is one of their responses.
KING: I know that people will be curious. How is this any different than typical corporate cost-cutting?
ROSALSKY: Well, this seems to be happening across the entire economy. And the big point I want to make is if you look only at standard inflation - you know, just rising prices - you're missing part of the picture. There's also a deterioration of quality that's happening at the same time. So actually, even though inflation is at, like, a 30-year high, it seems that the statistics are actually understating the problem. They're not capturing skimpflation.
KING: You made it up. But I respect it.
Greg Rosalsky from Planet Money - thanks so much for being with us. We appreciate it.
ROSALSKY: Everybody, subscribe to the Planet Money newsletter. We're totally not skimping on the content. It's at npr.org/planetmoneynewsletter.
KING: I do subscribe. Greg knows that.
ROSALSKY: (Laughter) Thanks, Noel.
(SOUNDBITE OF GEORGE BENSON'S "BREEZIN'") Transcript provided by NPR, Copyright NPR.