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Between COVID-19 economic
challenges, supply-side glitches, pent-up demand (people are finally
shopping again), and more, prices are percolating upward in most
uncomfortable ways. In Los Angeles, gas prices are hitting north of
$4.50, in some cases nearly $5.00 a gallon. In some places, the
shelves are bare, and staples like milk and bread are at least 5
percent higher than they once were. Inflation is here. It is real.
It isn't retreating, at least not anytime soon.
When
prices rise, we get inflation. Economists often describe it as "too
much money chasing too few goods: That means there are just a dozen
hot toys, and folks start making deals to get the hot toys from
somewhere. Other folks, then, either have o "wait their turn,"
conspire to pay more, or go without. While you can go without hot
toys, you can't go without milk, cheese, or chicken. Instead, you
watch hopelessly while prices rise and increasing prices take you out
of the mix.
Prices
rose by more than 5 percent from a year ago. It might be good news
for Social Security recipients, except that their larger check must
pay the higher prices that come with inflation. Inflation and Social
Security increase have hit a 13-year record high of 5.4 percent;
economists predict that inflation will drop only slightly in 2022, to
four percent, and then tick down a bit to 3.4 percent. In other
words, inflation will be with us for a while.
You
don't need economic analysis to explore this. All you have to do is
walk through the empty shelves at the supermarket, the rising gas
prices, the many ways people are cutting and pasting their lives to
conform with the "new" economic rules. Some of the rules
are powerful – balance your work and your lifestyle, and some
make no sense. However you interpret the rules, the metric has
changed. People are asking questions about the quality of life with
the same vigor that they once asked about compensation. And some are
willing to walk away from great offers that don't acknowledge their
challenges.
One
of the new economic realities, though, is the ways inflation affects
our lives. The effects are not uniform, and they have a differential
impact on people based on their socioeconomic status. People at the
bottom absorb the inflation hit more acutely than those at the top.
A five percent increase in the cost of a gallon of milk hits harder
for someone who earns $30,000 a year (or $15 an hour) than for
someone who earns $100,000 a year. At the bottom, people are making
survival decisions. At the top, the few cents more one is paying for
milk is nothing more than a nuisance.
What's
race got to do with it? Black people experience more poverty, spend
more time at the periphery, are more frequently unemployed (even as
some speak of labor shortages), and more economically distressed.
While all Black folks aren't poor or distressed, the number of us who
are, suggests that inflation will disproportionately affect Black
folks. If inflation is here to stay, we can predict a further
widening of the wealth gap and more economic challenges for Black
folks.
The
issue of workplace flexibility has ramifications as well. Many in
the middle/professional class have been told they can work remotely
for the rest of the year and even into 2022. Technology has made it
possible for people to shorten (or even eliminate) their commute,
thus saving money on gas, clothing, and more. Meanwhile, technology
has not made life easier for someone who must report to work in
person, the checkout clerk, the wait staff, the bus driver, the
nurse. These folks are dealing with inflation on two fronts, both in
terms of their expenses to go to work and the expenses they incur to
survive at home.
Black
folks will manage inflation the way we always have – with grit
and resilience. But inflation is as much a Black issue as the
infrastructure bill is. We are on a train that is moving forward,
even if, in the words of Dr. Bernard Anderson (University of
Pennsylvania), who mentored me, we are riding in the caboose.
Inflation hits us harder the poorer we are. And it won't get better
until we have better domestic public policy.
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