The bifurcated economy, and the policy decisions that stem from it, could become a double whammy for them, inflicting higher costs today and unemployment tomorrow. In that case, poorer families will almost certainly bear the brunt again, because low-wage workers are often the first to lose hours and jobs. The Fed might need to raise interest rates even more to bring inflation under control, and that could cause a sharper slowdown. If richer families don’t pull back as much - if they keep going on vacations, dining out and buying new cars and second homes - many prices could keep rising. Already, there are signs that poorer families are cutting back. That divergence poses a challenge for the Federal Reserve, which is hoping that higher interest rates will slow consumer spending and ease pressure on prices across the economy. But data and anecdotes suggest that lower-income households, despite the resilient job market, are struggling more profoundly with inflation. Between those stockpiles and solid wage growth, many have been able to keep spending even as costs climb. Higher-income households built up savings and wealth during the early stages of the pandemic as they stayed at home and their stocks, houses and other assets rose in value. “We notice it’s expensive, but it’s kind of like: I don’t really care.” “People in our group are not seeing this as a period of sacrifice,” said Schoenfeld, who lives in Sharon, Massachusetts, and is a member of a group called Responsible Wealth, a network of rich people focused on inequality that pushes for higher taxes, among other stances. He just returned from a vacation in Greece, with his daughter and two grandchildren.
Digital Replica Edition Home Page Close MenuĪnd David Schoenfeld, who made about $250,000 in retirement income and consulting fees in 2021 and has about $5 million in savings, hasn’t pared back his spending.
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