Inflation inequality deepens wage losses for America’s poorest

“The sharp rise in U.S. income inequality has spawned yet another gap that is putting even more pressure on the poorest Americans” writes Pedro Nicolaci Da for 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.The average middle-income household lost about $1,250 of purchasing power through 2018 to higher prices attributable to inflation inequality, according to the findings. “Inflation inequality significantly accentuates both the incidence of poverty and income inequality,” wrote Christopher Wimer, Sophie Collier and Xavier Jaravel.They actually experience substantially higher inflation than the rich, further exacerbating an already obscene wealth gap.The findings are pretty stunning given the role of official inflation numbers in setting a wide range of economic policies, from interest rates to social benefits.

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