Wall Street Journal reporter Josh Zumbrun offers interesting analysis of the Labor Department's latest consumer expenditure survey.
For example, the data explain why rising food and housing prices present a major problem for many Americans, even though inflation is very muted overall, he writes.
The reason: "low-income Americans spend a disproportionate share of their money on food and housing," Zumbrun says. Consumer prices were unchanged in the 12 months through February.
The Labor Department report
shows that those of us in the bottom 10 percent of income allocate 42 percent of our spending to housing and 17 percent to food. But the wealthiest 10 percent of us devote only 31 percent of our spending to housing and 11percent to food.
"This underscores one reason that inflation feels different household to household: people spend their money in such different ways," Zumbrun explains.
Perhaps the best solution to this problem would be to raise the income level of all Americans, so those at the bottom of the wealth totem pole don't have to worry so much about increases in food and housing prices.
Most of us would surely agree to this prescription, but on the issue of how to achieve it, reaching a consensus would be very difficult.
Meanwhile, a new study by four esteemed professors for the Washington Center for Equitable Growth indicates that Americans are concerned about the growing inequality of income, but they don't see the government as a solution for the most part.
"The survey shows that while respondents who view information about inequality are more likely to believe that inequality is a serious problem, they show no more appetite for many government interventions to reduce inequality — with the notable exceptions of increasing the estate tax and the minimum wage," the professors write.
They are Ilyana Kuziemko of Princeton University, Michael Norton of Harvard University, Emmanuel Saez of University of California-Berkeley and Stefanie Stantcheva of Harvard.
The statistics of the study are too complicated to summarize briefly, but if you click here,
you can find them in the report.
Bottom line: "The survey reveals a deep mistrust of the federal government’s ability to administer programs effectively and efficiently even after confronted with the importance of these programs in alleviating poverty among those Americans at the bottom of the ladder," the professors conclude.
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