(Newsweek) America’s inflation rate rose by 6.8 percent in 2021, the highest jump seen since 1982, far exceeding the inflation increase of 1.4 percent in 2020 and 2.3 percent in 2019.
The subsequent increases in the prices of goods have in turn exasperated the economic inequality between America’s upper class and its middle and lower classes.
A December 15 report by the Budget Model project at the University of Pennsylvania’s Wharton School found that average Americans now spend 7 percent more on their household goods while wealthy Americans now spend 6 percent more.
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As of December, gas prices cost nearly 59 percent more than they did at the same time last year, meaning those who devote a larger portion of their budget to this expense would find themselves paying more of their household products in 2021 as opposed to 2020.
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“We estimate that inflation in 2021 will require the average U.S. household to spend around $3,500 more in 2021 to achieve the same level of consumption of goods and services as in recent previous years,” the study states.
“Moreover, we estimate that lower-income households spend more of their budget on goods and services that have been more impacted by inflation.”
The issue of inflation stands as a hurdle to securing moderate Democratic Senator Joe Manchin‘s support on President Joe Biden‘s Build Back Better social safety and climate spending bill. While supporters of the bill argue that it will reduce American poverty, Manchin has stood firm in his concerns that it could increase inflation and harm regular Americans.
