A Higher Price: the peculiar relationship between inflation and theft Research points to a positive correlation between inflation and the incidence of property crime. As inflation increases, so too does theft, writes Scott La Franchie, General Manager – Marketing and Product at FIRST Security.
Inflation is often characterised as the ‘invisible thief’ due to the fact that high inflation rates result in devaluing people’s savings. If a $50 bag of groceries is now costing you $55 at the checkout thanks to inflation, it can feel like someone’s just picked $5 from your pocket.
Scott La Franchie, General Manager – Marketing and Product at FIRST Security.
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NZSM
That feeling of being ‘robbed’ is currently pretty raw among New Zealand’s motorists, who’ve been suffering eye-watering price hikes in recent days at the pump. But while that feeling of being short-changed may be well justified, according to a range of research there exists a far more substantive correlation between inflation and theft. While we’re talking fuel prices, it’s interesting that the MTA noted a couple of years back that service station fuel thefts were rising in New Zealand along with the price of petrol and diesel. “When fuel prices started rising in late 2017,” stated the MTA,” so too did the number of drive-offs.” In a news article published recently, the ABC in the US similarly noted that ”as gas prices continue to rise, so have reports about gas theft, either through stolen credit cards, or straight out of the tank.” But what about inflation beyond the pump?
Research identifies inflation as crime driver Traditional wisdom dictates that financial crises, unemployment surges, falling wages and other economic stressors lead to spikes in shoplifting and theft. A recent Bloomberg report is a case in point, stating that the “last time consumers were under severe strain — in the wake of the 2007 financial crisis, amid rampant job losses and spikes in prices for food and fuel — shoplifting surged.” But according to Brent Orrell, a Senior Fellow at the American Enterprise Institute, it’s inflation, not unemployment or falling wages, that is the real catalyst for increases in thefts and other crimes. In an piece published last October, Orrell wrote that traditional views on the relationship between economic downturn and crime didn’t hold up during the Global Financial Crisisinduced recession of 2008-10. “Even though unemployment soared, real wages fell, and consumer sentiment hit record lows, the FBI’s 2009 Uniform Crime Report showed declines in both violent and property crime.” Orrell cites the work of University of Missouri-St Louis Emeritus Professor Richard Rosenfel, who found that in the case of both the Great Depression of the 1930s and the recession of 2008-10, an increase in unemployment and a drop in April/May 2022
