Consumer prices rose by 6.8% last month, the highest jump in inflation in 4 decades
DON GONYEA, HOST:
Six-point-eight percent - that's the amount consumer prices rose last month, the highest jump in inflation in nearly four decades. And it might sound like a dry statistic, but it's having very real impacts on daily life for many Americans. Joining us now is Mark Wolfe. He runs the National Energy Assistance Directors Association. Mark, good morning.
MARK WOLFE: Good morning.
GONYEA: So a Gallup poll showed a wide discrepancy between low- and higher-income households in terms of how they perceive inflation. You wrote about why you think that's the case in a recent op-ed. Can you explain?
WOLFE: Well, there are a number of reasons. And 71% of low-income families said they were struggling with high prices, but only 29% of higher-income families reported that. So it's a clear economic divide in terms of how families are coping with rising prices. And it's not surprising because the increase in prices is hitting essential goods. Where families who have discretionary income are able to adjust to those prices, the low-income families who live basically from paycheck to paycheck don't have much discretionary income to adjust when prices rise, especially when they rise across all of the essential goods that families spend money on.
GONYEA: OK, let's focus in on energy cost. Help us understand the difficult choices families are making when fuel and natural gas prices go up like we've seen recently.
WOLFE: When gasoline prices go up - and now we're seeing home energy prices increase somewhat - families have to choose between paying these higher prices. They cut back on food. They cut back on clothing. They cut back on essentials because they're already living pretty close to the edge. So families spend money on gasoline to take their kids to school, drive to work.
GONYEA: Your colleagues around the country help distribute funds to help low-income Americans pay energy bills. The federal government allocated an additional $4 1/2 billion toward that assistance this year. Are people using it?
WOLFE: Not yet. We haven't seen a significant increase in applications. One of our concerns is the name. Our program is called the Low Income Home Energy Assistance Program. So we believe that there are many people out there who are eligible, who've lost a job, who've had to cut back their hours in order to take care of the children or a loved one. In order to do that, they think that this program is not for them because they think it's just for low-income families. And, in fact, a family of four earning about $40,000 a year would still be eligible, in some cases, even as high as $50,000, because states have some discretion in how high to set the eligibility ceiling.
GONYEA: A lot of Americans did get more money through the child tax credit. That's set to expire. How does that play into all this?
WOLFE: The importance of the child tax credit is that it increased the amount of money families can receive per child in order to help pay their bills. But that expires this month. The Build Back Better bill that's hopefully not languishing in the Senate - that's the bill that provides extra money for the child tax care credit. It would extend it by one year. And low-income families are using those funds to pay higher energy bills, higher clothing bills, higher food bills. So if that program is extended, that will take considerable pressure off of these families as these inflationary prices continue.
GONYEA: But still an open question as to whether or not that'll happen.
WOLFE: It certainly is.
GONYEA: Mark Wolfe is the executive director of the National Energy Assistance Directors Association based in Washington. Thank you very much for joining us.
WOLFE: Thank you. Transcript provided by NPR, Copyright NPR.