Consumer fees are everywhere. They’re even taxing baseball fans.
There is a clear disconnect between the seemingly daily reports of positive economic numbers in Washington and on Wall Street and the economic uncertainty reported in surveys of Americans.
From a purely statistical perspective, consumers should be popping champagne. The stock market continues to break records, sending retirement accounts soaring, as economic growth is expected to reach nearly 4% this year. Truflation, a financial data platform that provides inflation analysis, shows that real-time inflation is now just over 1%, a significant decline.
That’s all great news. Yet, consumer confidence in the economy just hit its worst level in 12 years. Why do consumers feel squeezed when the economic data seems so strong?
The answer is simple: The user taxes and fees consumers see everywhere they turn.
Look no further than the new deal Major League Baseball made with ESPN for out-of-town games, effective Feb. 10.
To watch your team play on the road, you will now have to pay twice: $30 a month for a subscription to ESPN Unlimited and a separate fee for MLB.TV access. The nation’s pastime is hidden behind a double paywall.
Unfortunately, such consumer fees have become par for the course.
Want to watch any new show on a streaming service? Pay a fee. Want to sit on the aisle of an airplane? Pay a fee. Need cash from an ATM? Pay a fee. Want to go to a concert? Ticketmaster adds “convenience fees” that can cost as much as the actual ticket. Your phone bill advertises at $50 a month but ends up costing $75 after taxes, fees and surcharges.
While some of these charges are nothing more than corporations hiding costs, others are the result of misguided government action.
Take, for example, the fees many Americans now pay to keep their bank accounts open. These add-ons came about thanks to large retailers’ D.C. dealmaking.
In 2010, they lobbied Congress to pass a law, now colloquially known as the Durbin Amendment, which capped the fees they pay to merchants every time we swipe our debit cards in their stores. Supporters said at the time that, because this law would save retailers money, they would lower their store prices in return.
However, a growing body of research, including a recent analysis from Robert J. Shapiro of the Progressive Policy Institute, shows that most large retailers pocketed the savings rather than passing them along to consumers. Why? Because banks had to keep our debit cards running, they had no choice but to raise fees to make up the difference.
It doesn’t really matter whether these added costs come from corporate boardrooms or acts of Congress. The result for consumers is always the same: higher monthly bills and greater income inequality.
The ESPN–MLB deal is the latest reminder that strong, topline numbers don’t mean much if the cost of everyday life keeps rising. Until policymakers start judging economic success by what families actually pay — not by what the broader economic data suggest — consumers will keep getting fleeced.
Jason Altmire, a Democrat, is a former member of Congress from Pennsylvania/InsideSources
