High Inflation Unsurprisingly Hurting Poor The Most

[Economy 52,844]

https://www.google.ca/amp/s/www.cnbc.com/amp/2021/12/29/economists-warn-of-inflation-inequality-in-2022.html

 

High inflation like in past high inflation periods is hurting the poor the most as the categories of goods and services that went up the most like food and fuel also happen to be the things that low income earners happen to spend a higher percentage of their income

 

Incomes for the bottom 20% in the US rose 5% but their cost of living rose some 7% in the last year showing a decline in real income purchasing power 

 

Tho the article is showing US numbers the story is simmilar in most of the world

[Economy 52,844]

After years of sub 2% inflation i kept wondering when it was gonna come back with a vengeance

 

While supply chain disruptions may have been the leading cause of this and the trigger money supply has also been increased considerably

 

When supply chain issues improve im sure the inflation rate will calm dow a bit from the current high rate but I worry it will not go down to what it was

[AnglerfishbraBENUS 5,734]

inflation is really interesting - the way it can be manipulated. 

 

[Lucas 31,111]

Yeah it does lol. I live in Luxembourg, here we have salary indexation. If there is a certain % of inflation, then your salary increases by the same %.

However here's where it sucks, if you win like 2500€ your salary will increase by let's say 62.5€ but if you win 4500€ it will increase by 112.5€. So the highest salaries will increase the most while the small salaries increase by a ridiculous amount.
+ add to this the fact that rent also increases immediatly when they do salary indexation. My rent increased by 100€ while my salary increased by less than 100€.
At the end this salary indexation hurt me more than anything because it puts me in a situation where I have even less money than before the salary indexation which is supposed to help the poor lol. It's just ridiculous

[Economy 52,844]

52 minutes ago, Lucas said:

Yeah it does lol. I live in Luxembourg, here we have salary indexation. If there is a certain % of inflation, then your salary increases by the same %.

However here's where it sucks, if you win like 2500€ your salary will increase by let's say 62.5€ but if you win 4500€ it will increase by 112.5€. So the highest salaries will increase the most while the small salaries increase by a ridiculous amount.
+ add to this the fact that rent also increases immediatly when they do salary indexation. My rent increased by 100€ while my salary increased by less than 100€.
At the end this salary indexation hurt me more than anything because it puts me in a situation where I have even less money than before the salary indexation which is supposed to help the poor lol. It's just ridiculous

Well the first part i dont think is where inflation hurts u. Of course if ur salary is higher the percentage increase makes a higher total number but if the percentage perfectly matches inflation then neither higher earners or lower earners wages increase more than the other... the purchasing power stays the same

 

Problem is inflation is an average across the board. When basic necessities go up in price more than luxuries it affects poor people more because a higher percentage of their income goes for such things

 

Also question if its the same percentage how isit possible that ur rent went up more than ur income? Ur rent is higher than ur income? I assume u must have a 2nd person with income?

 

And is that a law or something every company must follow? Of giving raises that match inflation?

[Lucas 31,111]

3 hours ago, Economy said:

Also question if its the same percentage how isit possible that ur rent went up more than ur income? Ur rent is higher than ur income? I assume u must have a 2nd person with income?

 

And is that a law or something every company must follow? Of giving raises that match inflation?

No no, my income is higher than my rent. But majority of landlords (they're assholes tbh) increase the price of rent right after the indexation. I guess rent isn't taken in consideration when the government calculates inflation.

And yes it's a law that absolutely every company must follow for all their employees. The government announces the % of inflation and the date from which salaries must be increased by the same %.

[moonsago 7,285]

I see it in my country too, I live in the eastern part of Europe and the prices for heating gas for example have gone up INSANE amounts, people are paying 5 times the amount they did last month or last year during the same time period, it’s an entire disaster for the poor, we need heat during winter but I already know people considering all kinds of alternative methods. 

[HEARTSTOP 3,154]

1 hour ago, moonsago said:

I see it in my country too, I live in the eastern part of Europe and the prices for heating gas for example have gone up INSANE amounts, people are paying 5 times the amount they did last month or last year during the same time period, it’s an entire disaster for the poor, we need heat during winter but I already know people considering all kinds of alternative methods. 

Russia's fault. But also Europe's fault for relying on Russia's gas instead of developing proper (and hopefully green) energy systems.

[Emvee 8,827]

The high gasoline prices are thanks to OPEC, are they not? They control their own production to make up for the losses they took in the early pandemic era.

It all dominos from there. 

[AJRocketMan 2,684]

I want interest rates raised. I don’t need to take out a loan for anything, so it doesn’t affect me anyways.