The poorest Americans experience higher inflation than the rich.
The sharp rise in U.S. income inequality has spawned yet another gap that is putting even more pressure on the poorest Americans. They actually experience substantially higher inflation than the rich, further exacerbating an already obscene wealth gap.
“In other words, as income inequality has increased, companies have increasingly catered to families with high incomes, driving down prices for the goods they buy, and further increasing real income inequality. In the meantime, poor families face prices and price changes that are ‘business as usual.’”
“Inflation inequality significantly accentuates both the incidence of poverty and income inequality,” wrote Christopher Wimer, Sophie Collier and Xavier Jaravel. He finds that annual inflation rates for those at the bottom of the income distribution are substantially higher than for those at the top of the income distribution, effectively increasing income inequality.
Instead, the Columbia study shows that “if we take seriously the idea that inflation varies across different points in the income distribution, a different picture of the economic health of those with low incomes emerges.” “We see similar trends for women-headed households with children, by race and ethnicity, and by gender respectively.”
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