Inflation batters low-income workers

Atziri Rosario makes $18 per hour from her full-time shift leader job at Duane Reade, $3 more than the state’s minimum wage. 

Rosario, who lives with her parents in Washington Heights, doesn’t pay rent, but she has noted that her salary buys less than it did even just a few months or even weeks ago. “For example, I would say toilet paper (has) gone up, like $5 or $6,” she said recently. “It sounds like a little bit, (but) it all adds up.”

Like many, Rosario, who is also a full-time college student, has found it a challenge to keep up with rising prices. 

The Consumer Price Index, which measures the average change over time in prices paid by urban consumers, increased 9.1 percent over the last year, a four-decade high. The Bureau of Labor Statistics on July 13 said June’s 1.3 percent increase was “broad-based,” with gasoline, shelter and food being the largest contributors.

But it's not just at the pump and in supermarket aisles where prices have increased.

Gerson Escobar, 23, came from El Salvador to Queens, five years ago. He now works 55 hours a week juggling two jobs, as a kitchen crew member at Chipotle and pizza cook. “I have to pay all the bills and take care of the child,” he said.

“The thing that I have on my shoulder now is the car debt,” Escobar said, adding that he’s thinking of picking up a third job to pay off the brand-new car he bought in January.

Having recently received a certificate in cooking, Escobar plans to ask for a raise from the pizzeria, where he’s made the same salary for years.

Debipriya Chatterjee, a senior economist at the Community Service Society of New York, a nonprofit that advocates for economic opportunities and equitability, said inflation effects “are highly regressive,” such that “low-income folks spend a higher share of their household income on basic necessities, and so, they are facing the effect of inflation more than someone with a higher purchasing power.”

According to The Unheard Third, a public opinion survey led by the Community Service Society, one in three low-income households have less than $100 in savings. “For a household like that, to experience this high inflation, it means having to go hungry, having to forego medical appointments, having to forego buying school supplies, and so on,” Chatterjee said last week.

And recent findings by the Economic Policy Institute showed that the value of the federal minimum wage, currently $7.25 an hour, has reached its lowest point in more than six decades. And this June, $15, the state’s minimum wage, bought what last year would have cost $13.75.

Chatterjee noted that the increase in wages could lead to an “inflation spiral,” where higher prices beget higher wages and yet still higher prices. But she nevertheless advocated for workers to ask for and receive better pay and benefits because “it is totally possible that a wage increase can be absorbed by the economy.”

“They should definitely push for higher wages, better workplace protections,” said Chatterjee, “to unionize, and to ask for better.”

Policy makers could have options

There’s little otherwise workers can do for themselves, “other than trying to organize and pressure the employers to actually provide economic support to them," she said.

Policymakers, though, could act to lessen the financial burdens on individuals and families by, for instance, expanding city and state income-support programs, and increasing federal tax credits such as the Earned Income Tax Credit and Child Tax Credit. Lawmakers should also reconsider the Good Cause eviction bill, which would prohibit most evictions and cap some rents, she said.

“There should be a review of any revision of the standards that are used for providing benefits,” Chatterjee said.

A research paper by a Federal Reserve economist released last month found that there’s a slightly greater than 50 percent chance of a recession in the next year.

“If a recession does happen in a year or two, it would be devastating as it always is, and low-income workers are almost always the first of casualties,” said Chatterjee, who is nonetheless optimistic that a recession can be staved off.

Regardless, inflation guarantees that bills will continue to pile up.

Mahmudul Hassan, who makes $15 an hour working at a Dunkin’ store on the Upper West Side, occasionally uses a Citi Bike rather than the subway to get to work from his West 54th Street home. A round-trip used to cost him about $6 or $7; it’s jumped to around $12. 

Which all adds up to more credit card debt, Hassan said. Where that monthly statement used to hover around $400, “now I had an $800 bill,” he said.

Rosario, the Duane Reade worker, said neither she nor her working parents had received raises in some time. Among her solutions to the increased cost of living is a simple one. 

“They should pay $20 minimum for everyone,” she said. “Because if everything else is going up, I feel like our pay should go up as well.”

shihaof@thechiefleader.com