Interesting article. What are you observing in your areas?
The article is behind a paywall for me but I was able to see the close-captioned video (about 2m30s for those like me who tend to avoid videos).
I will say that there are more meetings for work that would have normally occurred in-person that are now taking place virtually, due to the price of gas.
I wouldn’t be surprised that upper middle class incomes are not increasing at the same (or faster rate) than inflation, but I don’t have much feedback on that from others (my spouse’s and my incomes are not keeping up with it). That lower wage jobs are increasing is because their income was stifled for so long (ahem, federal minimum wage of $7.25). But with respect to the amount of debt people are going into or how their investment portfolio is holding up compared to others? I have no insight into most others in my surroundings. Either the people I know aren’t going into consumer debt or they’re not talking about it if they do.
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Couldn’t read the article, but my general thoughts about inflation.
Stock market not totally tied to inflation is down for sure we all see that. I don’t have money in the market that I will need immediately and I have 13-15 years until retirement so I am not worrying about it.
Housing - Luckily I bought my house in 2001 and have a fixed rate mortgage so it isn’t affecting me. I do feel for the people with rent increases and who had to buy a home in the recent craziness.
Gas - It sucks for sure. Can’t do too much about it. Maybe avoid a longer day trip on the weekend. Gas has been dropping quite a bit in the last couple of weeks.
Everyday spending and groceries - This is where I try to be creative and make some savings. First thing we reduced our eating out or going to get food by 1 trip a week. As mama used to say we got food at home. That helps plenty almost offsets the gas increase especially if you forgo a restaurant trip. I have been doing all the shopping since the start of Covid. Yes things have gone up at the grocery store, but at least at mine there are deals to be had. I going with the idea of what is on sale is what we are eating this week. It helps plenty when pork chops are buy one package get another free.
Overall I am also lucky that I haven’t had to buy a car or a big ticket item like that.
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Someone struggling with inflation is probably someone who:
- Is not one whose income increased to be part of the driver for inflation.
- Was living paycheck to paycheck before.
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The inflation that we are seeing is definitely not a lot of fun for a mostly retired person with a daughter in university. I used to say that we have beer tastes on a champagne budget. Now I say that we have beer tastes at champagne prices on a champagne budget.
Every trip to the grocery store is a reminder of how much prices have gone up.
I am very much aware that this is much more difficult for people who previously had beer tastes on a beer budget.
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not too sure why this is newsworthy. The only folks barely affected by inflation are the wealthy. Yes, the poor are hit the hardest – they spend a disproportionate share of their wage on basics – but its a sliding scale all the way up to 5%'ers.
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And folks like us who buy very little, both before and now. A lot of our meat comes from hunting. Our garden provides us with plenty of veggies. We only buy clothes when those we have are worn out, and that’s not often. Ditto with getting cars, etc.
I guess we never really supported the economy as a consumer “should” and perhaps because of that we can easily absorb increases in what we do buy.
I feel for those whose rent has increased so much. Other things increasing in price make sense with supply/demand and war issues. Rent? WTH?
We still own one rental place, having sold the others as tenants moved out by their choice. I can’t fathom why I would increase our tenant’s rate other than greed. Taxes haven’t increased that much. Few repairs are needed. I see no need to make them have to stretch their budget “just because.”
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The article (or at least the video that accompanied the article) indicated that it is not the poor who are being hit the hardest by the latest rise in inflation, but the upper middle class. The uppder middle class is having greater transportation costs (traveling further distances and paying for gas), experienced decreased income if they had to go on unemployment benefits during the pandemic which may have also resulted in decreased savings, and something else, IIRC.
In contrast, the lowest economic group has had increased wages, increased savings (unemployment benefits paid more than their regular wages), and they use more public transportation or other means of transportation than their own car with gas.
The article surely had more detail and nuance, but this was part of the gist that I got from the video.
Yes, many of those lower income people who upgraded their pay levels* benefited from pay increases to a greater extent than their inflation-driven costs increased. Indeed, the significantly increased pay levels for some sectors of lower income jobs are one of the drivers for inflation (but not the only one, however).
*Remember when a $15 minimum wage was a political slogan? Now it is irrelevant in many areas where lower paying jobs typically pay that or more.
Perhaps.
For example, you mention lower (as a %) unemployment benefits. But enhanced unemployment benefits (for the low income) have zero to do with inflation, and were solely teh result of one of the covid-recovery bills, stimulus checks. And yes, the upper middle may have longer driving since they choose to live in a nice house in the suburbs with cars that they can drive. (The poor are relegated to public transport.)
The article confirms my initial thinking: “While poorer families might feel the effects of inflation more deeply…”
And,
And,: “upper-middle-income Americans have less in excess savings than all but the poorest U.S. households….”
"Mark Zandi, Moody’s Analytics’ chief economist, suggests that this is at least partially the result of government policy. "
Actually, its the OP’s title that is incorrect, as the gist of the article is that the UMC did well in the first two years of covid, but now not doing as well (due to both inflation but also a reduction in government covid payments). Excess payments allowed teh UMC to save money, but those are now gone.
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Can’t read the article but I feel like inflation is hitting the amount of money we spend especially on restaurants. It’s just not worth $120-200 for a nice dinner for two. And going out with the kids is even crazier. We’ve also cut back on a lot of gourmet meat, food and even little gifts. We usually buy things locally. A lot of that has stopped.
We need to pay tuition and that is part of it. But the crazy gas prices do make me think.And some things just are not worth it anymore. I used to go to Panera on my way home from work 3x a week. At 17/lunch I rarely go at all.
Strangely enough, we are going on a European trip. First trip in a couple of years. The dollar is strong and we’ll spend a decent amount. Normally, we spend a large amount on restaurants, travel and food. I get more satisfaction from eating out when I travel than when I’m at home. I’ve noticed a lot of local restaurants are no longer full and some have abbreviated menus.
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Our discretionary income went up a ton after our last son graduated. 
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This suggests that those upper-middle-income Americans had a pre-existing spending problem compared to middle- and lower-middle-income Americans. No wonder they have difficulty with inflation, especially since their jobs are probably among the less likely to have pay increases that are part of the drivers of inflation (they are seeing price increases in restaurants, stores, etc. but not the $15 per hour instead of $8 per hour that the employees in restaurants, stores, etc. are now being paid).
$60 to $100 per person seems like it should be a very special occasion to begin with, rather than a common occurrence, for even the upper middle class.
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I think this thread belongs in the Parent Cafe as it’s not about college.
I would be happy to move it if the OP says it’s ok. Or the OP can move it themselves.
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Just can’t eat here for less than about $50/person no wine, 1 app without going to a chain restaurant. I think our area IS high ( we have lots of tourists and most of the restaurants are nicer). But even the Mexican place ( family owned and on the lower end of the cost area-wise is still at least $35-40/person. I know that there are areas of the country where this might be $15-20/but that’s not our area. We do know of one place where it’s guaranteed to be less than $100 but again it’s rare. And I’m including tax and tip.
We could drive a ways to go out to dinner but with gas prices and time being valuable, it’s not really worth it. A lot of the lower end places went out of business or are still mostly take out as they can’t get enough people to work. Even the high end places don’t seem like they are doing great. Oddly, inflationary prices are creating less customers.
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Would most of the tourists be upper (not upper middle) class people who normally spend that much on restaurants?
I live in what is considered a high cost of living area, but very few of the restaurants are where the cost of a typical meal is $50 or more per person.
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Please move it. Although college affordability is affected.
Another vote that the thread should be in the Cafe
We were just eating at tourist restaurants in San Francisco and didn’t come across $50 or more per person. They’re probably there, but we were in main sections with a lot of restaurants and tourists. We didn’t eat in any chains. We had Seafood and Thai for our main meals.
But everyone has their idea of what they want in a restaurant, so no quibbles from me if that’s what someone else likes/chooses. It’s just not us.
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Most people who live in the area have moderate to high incomes. Some are retired, some working. The tourists are a mix. I’d guess skewed a little high but not all.
In NE, the season for good weather is very short. So they keep prices high esp in the Summer. Average price of an entree is $28-32 and glass of wine $15. They’ve even made burgers close to $20 so you can’t really go somewhere and get a cheap eat. And restaurants have eliminated big price breaks at lunch ( You’d save maybe 20% over dinner). I’d say food went up at least 40% post Covid.
Sounds like your area is very inexpensive compared to ours.
Moved to Parent Cafe!
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