It’s hard to grok but inflation is just the “price of money” in terms of goods and services. (I.e. I can ‘buy’ one pound with X good)
Inflation only negatively affects the poor in that their wages are sticky and do not adjust in time (so in effect, their wages in goods and services terms declines)
The same thing happens to rich people, it’s actually a “capital owner vs salary man” divide. (A small building owner is impacted less than a very wealthy athlete for example, since one can raise rent yearly and the other is in a long term salary contract).
I first really liked the athlete example, but now think that that also depends on where the athlete is in their career and what they have done with their past income. A athlete a little bit later in their career, should have substantial investments unless that more than make up for the inflation impacting the value of their current salary. They probably also have a steady stream of sponsorship deals that get (re-)negotiated more frequently than salary at McDonald's
Very similar dynamics probably hold almost by definition for anyone who is wealthy.
>A athlete a little bit later in their career, should have substantial investments
Yes, that makes them a capital owner, but it's hard to make a metaphor where people aren't allowed to buy stocks with their excess money.
>They probably also have a steady stream of sponsorship deals that get (re-)negotiated more frequently than salary at McDonald's
Sure, but that still makes them worse off than a capital owner.
>Very similar dynamics probably hold almost by definition for anyone who is wealthy.
Sure, but a relatively low-wealth landlord is hurt less than a wealthy banker who consumes most of their salary. That's the only point- that it's more than rich/poor, even if the true nuance is correlated to rich/poor.
Inflation only negatively affects the poor in that their wages are sticky and do not adjust in time (so in effect, their wages in goods and services terms declines)
The same thing happens to rich people, it’s actually a “capital owner vs salary man” divide. (A small building owner is impacted less than a very wealthy athlete for example, since one can raise rent yearly and the other is in a long term salary contract).