Inflation, a problem that devastated the world’s poor in the 1970s, is back.

Once again, it’s driven by rising food and energy costs, with no relief in sight. In February 2022, consumers paid more for their goods, including groceries (up 11.5% vs. one year ago and 18.9% vs. two years ago), according to the Inflation Insights Price Pulse. That’s well above the overall inflation rate of 7.9% reported by the federal government last week.

Food and energy inflation affects everyone. But it affects low-income people more than high-income people, as they spend a more significant proportion of their incomes on necessities like energy and food. That’s something missing in inflation statistics.

“Consumer-price inflation measures are calculated using a basket of goods representative of the average consumer,” wrote Indermit Gill and Peter Nagle in a piece posted in the Brookings Briefs on March 18. “But the actual composition of spending varies significantly by income group. The lowest-income households in emerging and developing economies spend roughly 50% of their income on food. For the highest-income households, the amount is just 20%.”

“Inflation is affecting different consumer groups disproportionately, including minorities, Gen Z and low-income consumers,” said Bob Summers, vice president of financial services for Numerator. “These groups are absorbing higher-than-average grocery inflation, reflecting an inability to mitigate price increases. And sustained double-digit grocery inflation will likely lead to more significant behavior changes among these consumer cohorts.”

Low-income consumers in the U.S. are paying 12.8% more for groceries than a year ago, compared to middle-income (11.4%) and high-income (11.1%) consumers, according to Numerator. Household items saw the sharpest increases in prices (15.3% vs. one year ago and 24% vs. two years ago) across all categories.

“High-income households can easily switch from higher-quality goods to lower-quality goods in times of crisis,” wrote Gill and Nagle. “They can also take greater advantage of discounts on bulk purchases and sales. Poor households ordinarily don’t have those options.”

Low-income households rely more on wages and government subsidies than wealthier households. These sources of income usually lag behind inflation.

“Price inflation often outstrips growth in wages and transfers, while self-employment income and investment income may be more likely to keep pace with inflation,” wrote Gill and Nagle. “As such, inflation can reduce the incomes of poorer households relative to those of the richest. In Brazil ... self-employment and investment income account for a larger share of income in high-income households than in low- and middle-income households. The very poorest households also rely on non-monetary income.”

What can governments do to ease the pain?

A few things.

One of them is to adjust programs like food stamps to inflation. Another is to drop the gasoline sales tax. A third is to tax the beneficiaries of high energy prices like oil companies and transfer the money to low-income people.