Inflation Hits the Poor Hardest...Staples Are Rising Fastest

[babylonsister]

Inflation Hits the Poor Hardest
No Income Group Is Untouched, but Staples Are Rising Fastest

By Neil Irwin and Alejandro Lazo
Washington Post Staff Writers
Friday, March 21, 2008; Page A01


Inflation is walloping Americans with low and moderate incomes as the prices of staples have soared far faster than those of luxuries.

The goods and services Americans consumed in February were 4 percent more expensive than they were a year earlier. But there is a big divide in how much prices are climbing between the basic items people need to live and get to work, and those on which they can easily cut back when times are tight.

An analysis of government data by The Washington Post found that prices have risen 9.2 percent since 2006 for the groceries, gasoline, health care and other basics that a middle-income American family has little choice but to consume. That would cost such a family, which made $45,000 on average in 2006, an extra $972 per year, assuming it did not buy less of such items because of higher prices. For a broad range of goods on which it is easier to scrimp -- such as restaurant meals, alcoholic beverages, new cars, furniture, and clothing -- prices have risen 2.4 percent.

Wages for typical workers, meanwhile, have been rising slowly. In that same time span, average earnings for a non-managerial worker rose about 5 percent. This contradiction -- high inflation for staples, low inflation for luxuries and in wages -- helps explain why American workers felt squeezed even before the recent economic distress began.

"It just doesn't seem like anything is cheap these days," said Faith Tyler, 41, a personal trainer from Baltimore who has reacted to the higher prices for necessities by cutting back on luxuries. "I don't eat out very much, no vacations, nothing extravagant unless it's on sale."

more...

http://www.washingtonpost.com/wp-dyn/content/article/2008/03/20/AR2008032003517.html

[tsuki]

1. I'm glad Faith has luxuries to cut back on. What about the families

that have no luxuries?

[eShirl]

3. I know... "no vacations"?!

oh the humanity

[stellanoir]

2. I'd reckon that to fill an average sized paper grocery bag now costs about 35 bucks.

It cost about 20 bucks for a long time. Yes I try to use cloth bags when I remember to put them in my car before going shopping.

Throughout the '90's I'd put 10 bucks of gasoline in the tank of my car per week and drove more than I do now. Now it costs 30 bucks per week.

Let's not even go into heating costs.

But all those discrepancies will be rectified with a 600 dollar rebate which I may or may not receive . . . right?

[SpiralHawk]

4. "What's the problem? Just have your private chef make something delectable. SMIRK." - Commander AWOL

"That's what I do, it's what all my republicon homelander fatcat cronies do."

- Commander AWOL

[acmavm]

5. The manufacturing industry in this country is going to go completely

to Hell this year. In a lot of areas it already has. The biggest irony is that the people corporate America needs to buy their crap are the people they put out of work and who are stone-cold broke.

And in a time of 'war' no less. Does that not make CEOs traitors?

[raccoon]

6. Sadly, it always does. nt

[NashVegas]

7. Do Low Income People Even Buy Staples Anymore?

Why buy a box of spaghetti (or roll your own) for $1.30 and boulion for $3.50 and make dinner for four that way when you can get two dozen packs Ramen noodles for $5 - and have dinner for four, 6 times?

Even if not for that, most poor people don't have the *time* for cooking with pantry staples, they have to work two jobs for food + rent + clothes.

I think this article got written because of how it affects the middle class. If they drink organic milk, the price of that hasn't gone up, but they are now paying $3-$5 for a single red pepper, and that's got some people upset.

I'm still glad it got written, I just don't buy the writers' premise that it's all about the poor.