Rising inflation puts pressure on low-income families | News

BOSTON — Arielys Morales is careful about every dollar she spends and keeps a grip on the purse strings of her family’s modest budget.

But the 31-year-old mother, who works part-time and receives cash assistance from the state, said the rising cost of everything from meat and fresh vegetables to petrol leaves little money to buy things for her three school-age children.

“Everything is more expensive,” Morales said of Mattapan. “It’s hard to do more than buy food and put gas in the car. You have to remember a lot of things. »

State and federal governments have increased monthly cash assistance during the pandemic to help families struggling with the economic impact of the pandemic. They increased energy assistance to help low-income people struggling to pay their utility bills.

But the aid these social safety net programs provide is being eroded by the highest inflation in 40 years, and Morales’ pay and benefits aren’t going as far as they used to.

Proponents say that while inflation is felt by everyone, price increases are particularly devastating for low-income households who were already living on the fringes.

“Nearly all of their spending goes to necessities — food, energy, shelter — which have seen some of the biggest increases at various times over the past year,” said Lew Finfer, co-director of the Massachusetts Community Action Network. “People are really struggling.”

In economic terms, inflation is the measure of how quickly the prices of goods and services increase from month to month, and the rate has increased dramatically.

Economists attribute the rise to a variety of factors, including strong demand for oil and gas around the world, staff shortages and supply chain disruptions.

A recent Gallup poll found that 45% of American families said they had experienced severe or moderate hardship due to inflation.

President Joe Biden addressed inflationary pressure during his recent State of the Union address, calling on Congress to pass measures to reduce the cost of prescription drugs, energy and childcare .

“With all the bright spots in our economy, record job growth and higher wages, too many families are struggling to keep up with the bills,” Biden said. “Inflation robs them of the gains they might otherwise feel.”

In Beacon Hill, policymakers are trying to find ways to ease consumer pain, but no comprehensive plan is currently on the table.

Governor Charlie Baker said his proposed tax cuts that are being considered by the Legislature would go a long way to offset the impact of rising inflation.

Baker’s $48.5 billion preliminary budget proposal calls for adjusting income tax laws to increase deductions for low-income renters, expand housing tax credits and childcare and to revise the “death” tax, among other tax reductions. In total, the tax cuts total $700 million and would be funded by surplus revenue.

“I definitely think one way to help people is to take a little less out of their pockets,” Baker said during a Monday briefing. “Many of these cuts are aimed at seniors and some of the families hardest hit by the pandemic.”

Baker said his administration was also working on other ways to ease the inflationary burden on consumers, some of which would require legislative approval.

On Friday, the Baker administration said it would increase benefits from the federal Supplemental Nutrition Assistance Program, also known as food stamps, providing $1.4 million in additional support to families in low income.

Last year, Biden signed an executive order increasing federal food assistance by about 15% for nearly 12 million people who use SNAP and other programs.

But advocates say the state government needs to do more to offset the impact of rising inflation on state assistance programs and other safety nets.

A proposal being considered by lawmakers would increase the state’s main cash assistance program, known as Transitional Assistance for Families with Dependent Children, by 20% a year until they reach half federal poverty level and index monthly payments to inflation for subsequent years. years.

Last year, Baker and state legislative leaders agreed to increase monthly cash assistance program benefits by about 9.1%, which increased the maximum payment for a three-person household. at $612 per month. This was the first increase in more than a decade.

But proponents point out that the rate of inflation – which jumped to around 7.5% in January – reduces the net worth of the increase to just around 1.6%.

“It’s just not enough to offset the loss in value,” said Deborah Harris, an attorney at the Massachusetts Law Reform Institute, which advises low-income families. “We are hearing from families who are having to skimp on clothing and other essentials because the value of the aid they are receiving has eroded.”

Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group newspapers and websites. Email him at [email protected]