On Tuesday’s edition of NPR’s “Marketplace” podcast, host Kai Ryssdal, Correspondent Mitchell Hartman, and Morning Consult Senior Economist Kayla Bruun stated that despite the rate of inflation easing, low-income earners “are still playing economic catch-up and coming from way behind to do it.” And are “falling behind” and “now less financially secure.”
Ryssdal said, [relevant remarks begin around 16:40] “During the distressing peak of those rising prices, overall real wages lagged, and they lagged a lot. Even though paychecks were going up, prices were going up more. This spring though, that trend turned around, and average hourly earnings starting outpacing the Consumer Price Index. That is welcome news for low-income Americans in particular, who are most affected by inflation, but…they are still playing economic catch-up and coming from way behind to do it.”
Hartman then did a report on how the finances of low-income families have deteriorated “in the face of inflation, even as price increases have started to moderate.” Hartman added that “with inflation now falling, middle and upper-income consumers are spending more, worrying less about high prices, and looking for fewer discounts. But this is not true of consumers at the bottom.”
He then played a clip of Bruun stating, “It’s really that lowest income group that seems to be falling behind.” She also stated, “It’s about the duration of living with high prices, so even as inflation slows, they’re still playing catch-up. They’ve worked their way through their savings, they’re increasingly likely to walk away from purchases.”
Hartman then stated, “And even though post-pandemic wage gains have been relatively strong, especially in lower-wage service jobs, these folks are now less financially secure. For example, says Bruun, when these households are faced with an emergency household expense –” he then played a clip of Bruun saying, “The lowest income group was least likely to say they’d be able to cover it with cash, 47% said that they might not be able to pay some of their other bills if they face a $400 expense, which is pretty striking, I think.”
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