Please note!

This fact brief was originally published as an experiment to test the concepts behind fact briefs.

Readers should be aware that while there is still a lot of useful information in fact briefs like this one, not all of them reflect Gigafact's current methods and standards for fact briefs. If you come across any that you feel are out of date, don't hesitate to contact us at support@gigafact.org.

FACT BRIEF

Does inflation disproportionately harm the poor?

Tuesday, December 15, 2020

By Austin Tannenbaum

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YES

Inflation, a general increase in prices over time, disproportionately harms the poor.

A 2011 U.K. study found that between 2008 and 2010, the poorest fifth of Britons experienced an inflation rate 1.6 percentage points higher than the richest fifth due to low mortgage rates, which benefit property owners, and increases in the price of gas, electricity and food, which “hit poorer households harder.”

A 2014 U.S. analysis found that between 2012 and 2014, the poorest fifth of Americans experienced an inflation rate 0.2% higher than the national average, which caused “hundreds of dollars a year in extra costs” for those “least able to afford it.”

A 2000 World Bank analysis stated that “high inflation tends to lower the [income] share of the bottom quintile and the real minimum wage—and tends to increase poverty,” with inflation outpacing wage gains among the poor.

This fact brief is responsive to conversations such as this one.

Sources

Institute for Fiscal Studies: Poor experience higher inflation than rich

FiveThirtyEight: Inflation may hit the poor hardest

World Bank: Inflation and the poor

ABOUT THE CONTRIBUTOR

Gigafact

Between 2020 and 2022, under close editorial supervision, Gigafact contracted a group of freelance writers and editors to test the concepts for fact briefs and provide inputs to our software development process. We call this effort Gigafact Foundry. Over the course of these two years, Gigafact Foundry writers published over 1500 fact briefs in response to claims they found online. Their important work forms the basis of Gigafact formats and editorial guidelines, and is available to the public on Gigafact.org. Readers should be aware that while there is still a lot of relevant information to be found, not all fact briefs produced by Gigafact Foundry reflect Gigafact's current methods and standards for fact briefs. If you come across any that you feel are out of date and need to be looked at with fresh eyes, don't hesitate to contact us at support@gigafact.org.

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Fact briefs are short, credibly sourced summaries that offer “yes/no” answers in response to claims found online. They rely on publicly available, often primary source data and documents. Fact briefs are created by contributors to Gigafact —a nonprofit project looking to expand participation in fact-checking and protect the democratic process. See all fact briefs here.