Negative Effects of Inflation on Low-Income People

Inflation can be especially hard on people whose wages are at or near the poverty level.

Inflation can be especially hard on people whose wages are at or near the poverty level.

Inflation may be defined as a general increase in prices of products and services. This includes import and export costs, labor costs and the price of consumer goods. For people whose incomes do not keep pace with the rate of inflation, its impact can be especially strong. For example, inflation can make it difficult for low-income people to pay for basic household expenses.

Living Expenses

Low-income people may find it difficult to pay for items like housing, food and utilities when prices of these goods rise and outpace their wages. To pay for basic living expenses, people with low incomes might keep their heat off during winter months and air conditioning off during summer months, placing themselves and their children at risk of hypothermia and heat-related health problems. If rents and mortgages with adjustable interest rates rise, people with low incomes may be unable to avoid falling behind in payments and as a result face eviction and homelessness.

Work/Life Balance

To meet the rising costs of inflation, low-income people may have to work longer hours or take on additional jobs and -- even with the extended work hours -- might not have enough money to build or grow their savings. For people who have low incomes and school-age children, the long work hours can keep them from spending time with their children. It can also lead to situations in which their school-age children are at home alone before and after school if money for a babysitter is not available.


Low-income workers without employer-provided health insurance might be unable to afford to pay for it themselves. Even if they do have insurance, to keep from having to pay deductibles, they might forgo annual checkups for reason-specific doctor visits, which in turn may cause them to be unaware of health problems or to seek treatment for them. They might be forced to do without necessary prescriptions, eyeglasses, dental procedures and other healthcare expenses.


The rising costs of a college education can make it unaffordable for low-income workers.Children of parents with low incomes might drop out of high school or opt out of college in order to work menial jobs to help their parents pay for basic living expenses. This, in turn, can create a cycle of poverty extending across generations.


About the Author

Rhonda Campbell is an entrepreneur, radio host and author. She has more than 17 years of business, human resources and project management experience and decades of book, newspaper, magazine, radio and business writing experience. Her works have appeared in leading periodicals like "Madame Noire," "Halogen TV," "The Network Journal," "Essence," "Your Church Magazine," "The Trenton Times," "Pittsburgh Quarterly" and "New Citizens Press."

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