By William A. Galston Ezra K. Zilkha Chair and Senior Fellow - Governance Studies and Elaine Kamarck Founding Director - Center for Effective Public Management Senior Fellow - Governance Studies
As inflation keeps rising, the Biden administration cannot ignore what people are experiencing in their daily lives. Overwhelming numbers of Americans list inflation as a big worry. However, as prices rise in the most visible parts of the economy—food, gas and electricity for example—the impact has been different for lower and higher-income Americans. A recent AP-NORC poll found that “half of people in households earning less than $50,000 a year say that price increases have had a major impact on their finances. Only a third of those in households earning more than $50,000 say the same.”
The difference is between the family that goes through the grocery store adding up the items as they put things in their trolley to make sure that they have enough money to pay and the family that simply put the items that they want in their trolley without worrying about the total. For the former, inflation is a daily source of anxiety, especially in two places most Americans cannot avoid—the gas station and the grocery store. For higher-income households, inflation is a cause for concern, but its impact is less serious, therefore might not affect their political choices.