The Inflation Gap
A new analysis indicates that rising prices have been quietly taxing low-income families more heavily than rich ones.
We now have solid evidence that low-income families experience higher rates of inflation than high-income families; it's an effect of inequality, and also makes the lived experience of inequality far worse.
An obscure but influential argument made for not worrying about inequality is that the poor face a lower inflation rate than the rich. These arguments were everywhere ~2009 and still remain. Turns out new, actual research on the topic finds the opposite.
In the U.S., it's expensive to be poor & cheaper to be rich. New data shows that poor families experience higher inflation rates than rich families — meaning that inequality is even worse than we thought.
"Call it 'inflation inequality,' a subtle, novel way that the fortunes of the rich and the poor have diverged."
on a new economic analysis
Our inflation indices don't take into account that prices of goods consumed by low-income HHs are rising faster than those of richer HHs. Wimer, Collyer, & Jaravel find that adjusting for inflation inequality leads to higher poverty, reduced income growth
Patrick W. Watson
"Such changes compound over time, wedging apart the welfare of struggling households and flourishing ones. Rich families get competitive prices... poor families end up paying more for worse-quality alternatives."
Massive kudos to
for this great new research on inflation inequality and the rising price of poverty, and in general for using cool research to dismantle destructive and lazy narratives on the economy.
Bill Perkins (Guy)
For those who THINK inflation helps the poor, here is another article showing you how it helps the rich and pummels the poor. The Federal reserve has been full throttle on expanding the wealth gap. #TheyShouldBeScared
Albert S. Fu
A new analysis indicates that rising prices have been quietly taxing low-income families more heavily than rich ones... see earlier tweet about full profs complaining about inflation