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this post was submitted on 22 Jul 2023
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Which union secured their members a 10% wage increase in the past year?
The poor are the most affected by inflation. Just because their spending pattern doesn’t shift doesn’t meant they aren’t affected. The shift in spending patterns is a way to avoid the effects of inflation. A person whose income cannot be diverted is the most effected.
It’s like a plane is crashing and one person ejects while the other person doesn’t. Yes getting ejected from a plane’s cockpit is a high energy event. But crashing in the plane is an even higher-energy event.
The people who you are saying are “most affected” by inflation are experiencing those effects in the activation of anti-inflation mechanisms in their life. Those anti-inflation mechanisms while they do represent an effect are not as big as the effects felt by those without access to those mechanisms.
Some managed to do so, but 10% inflation is exceptional anyways.
Otherwise I don't agree. Obviously the poor are effected "the most" by any adverse economic effect due to their low coping capacity / economic buffer. But that they are especially affected by inflation is not universally true.
You need to drill down a bit further what inflation actually entails. The common "basket" used for calculating "the" inflation is far from perfect and depending on your consumption pattern you might hardly see any inflation in your personal expenses if it is mainly driven by an increase in energy costs as was the case in Europe during the last year.
Classic inflation aka devaluation of money only effects those that have money (savings). Of course if you have an increase in certain prices due to some external shock this can have a much broader effect, but it is actually wrong to call that "inflation".
So what should I call it when my food budget balloons, because the grocery stores are calling it inflation?
Most likely "greedflation" 😅
This model you’re putting forward seems to imply that when energy costs increase, it isn’t really felt by the poor.
Here in Colorado, lots of food has doubled in price. That’s big for poor people.
What I’m asking is: is the food not a major component of inflation in Europe as well. And if it is, do you not see that as connected to energy prices?
You need to improve your reading comprehension. I never said any of these things.
Obviously energy prices can have an impact on food prices, in fact they do a lot with conventional agricultures dependence on fertilizers made from natural gas.
While we’re discussing reading comprehension, I actually made an argument as to why the poor are especially, universally, affected more by inflation.
You can’t just counter the conclusion without countering the argument. How is what I described not something that’s always operating anywhere inflation is happening?
Because you failed to understand my argument. I did address your concern above.
Your argument is that because poor people don’t have savings, they don’t get affected by inflation.
No, my argument is that people with savings are effected more by inflation specifically, but of course due to low coping capacity poor people are more effected by any negative economic situation. However if you have no savings, but a relatively stable inflation adjusted income, then inflation does not effect you much.