How rising prices are squeezing Americans who were already on a tight budget

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• Judy Woodruff:

  We're going to get the latest U.S. government report on inflation tomorrow. And, once again, many economists believe the spike in prices is going to be quite high compared with a year ago.

  Inflation's bite has been particularly pronounced with some groups of Americans. That includes seniors living on fixed incomes, and millennials who had already lost ground during the financial crisis in the Great Recession.

  Economics correspondent Paul Solman reports.

• Hyacinth Yennie, Connecticut:

  Oh, prices has gone way out of control.

• Paul Solman:

  At the South End Senior Center in Hartford, Connecticut, rising prices have seniors like 67-year-old Hyacinth Yennie feeling the burn.

• Hyacinth Yennie:

  You look at your electrical bill, you look at your gas bill, you look now, especially now, food bill, it's ridiculous.

• Mark Demaio Retired Utility Worker,:

  I like hamburger.

• Paul Solman:

  Retired utility worker Mark Demaio.

• Mark Demaio:

  It's up a dollar a pound, so I cut back.

• Paul Solman:

  In Kennerdell, Pennsylvania, where backwoods broadband is intermittent…

• Hannah Schall, Pennsylvania:

  I live in the country, so that happens sometimes.

• Paul Solman:

  … 34-year-old Hannah Schall says she can't cut back on formula for her 9-month-old. But the price…

• Hannah Schall:

  It used to be $35. Now we're paying $50. So that's $15 in nine months. That's crazy.

• Paul Solman:

  And in Greenville, South Carolina, Schall's fellow millennial, nonprofit development manager Amanda Rice, got a rude awakening in December shopping for a used car.

• Amanda Rice, Nonprofit Development Manager:

  So, I didn't realize how expensive it was until I saw the 2021. I was like, hold on, that's around the same price that they're selling the 2015.

• Paul Solman:

  A car she needed for her side gig as a rideshare driver.

• Amanda Rice:

  To tide myself over to that next paycheck, because of what's happening in our economy right now.

• Paul Solman:

  What's happening is inflation, in economics, more money bidding up fewer goods and services.

  And right now, COVID inflation, the government printing and doling out more money to prevent a pandemic collapse, COVID-clogged supply chains providing fewer goods, workers afraid to catch COVID staying home, providing fewer services.

  No surprise prices have shot up. And no surprise that folks who live paycheck to paycheck, especially the old and young, are the hardest-hit.

• Antonio Najarro, California:

  The cost of living, it has become more difficult to sustain myself.

• Paul Solman:

  In Riverside, California, Antonio Najarro said his two part-time jobs in retail and for the county were paying less than his pre-pandemic job as a state election worker.

  So, you have been blindsided by the increase in prices?

• Antonio Najarro:

  In hindsight, yes, thinking that I would still be able to get by or manage myself the same way in the past.

• Paul Solman:

  In that regard, Najarro, age 30, is a typical millennial.

• Ali Wolf, Chief Economist, Zonda:

  They're used to stable prices really for their entire working career.

• Paul Solman:

  Economist Ali Wolf, herself a millennial.

• Ali Wolf:

  Really, for the past 15 years, they have had roughly 2 percent inflation, and that's what they're used to. So, costs go up a little bit, but their wages go up a little bit, and so their purchasing power has roughly been stable.

  And then the pandemic hit, and it really just turned the dynamics upside down.

• Paul Solman:

  Case in point, 38-year-old Alexandra Upton. She shares an apartment in Santa Fe, bikes to her job as a restaurant server, yet struggles to make ends meet.

• Alexandra Upton, Restaurant Server:

  I'm angry. I'm very angry. But the fact of the matter is, I'm still in this situation, so I just have to make do, get a second job, pare down, eat one meal a day at the restaurant.

• Paul Solman:

  So, you eat one meal a day on your night shift at the restaurant, and that's it?

• Alexandra Upton:

  Yes. And we have had pounds of rice and pasta, and we have some beans, you know?

• Paul Solman:

  But you can't afford the fruits and vegetables?

• Alexandra Upton:

  No. No, absolutely not right now. Nope. And I'm a vegetarian. These aren't abstract issues to me.

• Paul Solman:

  Some millennials have resorted to even more desperate measures.

• Antonio Najarro:

  Last month, I was kind of in dire straits. I had to donate plasma twice a week to afford rent.

• Paul Solman:

  How much do they pay for plasma?

• Antonio Najarro:

  For newcomers, you get a bonus, anywhere between $100 to $150 per donation, but, after the first month, it will drop to $50 to $60 per donation.

• Hannah Schall:

  We're pre-planners, so we stock up pretty well.

• Paul Solman:

  Even the most self-sufficient millennial we found was feeling the pinch.

• Hannah Schall:

  Ammunition is super-duper expensive right now. I hunt with a .30-30. A box of shells used to be maybe 20 bucks. They're $40 now.

• Paul Solman:

  What do you hunt?

• Hannah Schall:

  Deer, bear, turkey in our backyard.

• Paul Solman:

  Wait a second. You don't kill bears in your backyard, do you?

• Hannah Schall:

  You betcha.

• Paul Solman:

  And you eat the bear meat?

• Hannah Schall:

  Yes. It's not my favorite, but if you skin it correctly, get all the fat off of it, it's not too bad.

• Paul Solman:

  What about deer?

• Hannah Schall:

  It's absolutely delicious. We have actually shot deer out of our living room window.

• Paul Solman:

  You mean, so, you see a deer, you open the window and just shoot the deer?

• Hannah Schall:

  Yes.

• Paul Solman:

  But it's now more expensive because ammunition has gone up in price?

• Hannah Schall:

  Welcome to the country.

• Paul Solman:

  But wait a second. Schall drives into town to work as a nurse.

  Has your salary gone up?

• Hannah Schall:

  Not to match the prices.

• Paul Solman:

  Schall's plight is representative of average American workers. Incomes rose nearly 5 percent last year, but inflation was at 7 percent.

• Ali Wolf:

  Wages are going up, but they're not going up as much as we have seen the inflation rate.

• Paul Solman:

  And inflation isn't just outrunning worker paychecks. How about retired seniors living on so-called fixed incomes, paychecks that never rise?

• Hyacinth Yennie:

  They can't just get out and get themselves a big job that can pay them a lot of money.

• Paul Solman:

  Some do get small jobs; 71-year-old Inilda Pena works part-time at the Hartford Senior Center to help cover her rising food costs.

• Inilda Pena, Hartford Senior Center:

  I'm diabetic. And I have to have a certain diet, lettuce and vegetables. Those things are expensive.

• Paul Solman:

  But the Social Security payment went up this year.

• Inilda Pena:

  Yes, but not that much.

• Paul Solman:

  In fact, payments from Social Security, which provides most of the typical senior's income, went up 5.9 percent in January, the largest cost of living adjustment in 39 years. But, again, inflation was 7 percent last year.

  And, therefore, says The Senior Citizens League Mary Johnson:

• Mary Johnson, The Senior Citizens’ League:

  Their COLA, or their cost of living adjustment, isn't keeping up with those other rising costs.

• Paul Solman:

  Rising costs like a $21.60 increase in the monthly Medicare Part B premium from $148.50 to about $170, a 15 percent increase, deducted directly from Social Security checks.

• Mary Johnson:

  Medicare Part B has increased over the years three times faster than the annual Social Security COLA. That's been true for decades.

• Paul Solman:

  But decades in which prices for other essentials didn't go up as rapidly as they're increasing now, putting the squeeze on seniors, like 76-year-old retired housepainter Robert Deray.

  His Social Security, about $1,300 a month, mortgage $835, plus:

• Robert Deray, Connecticut:

  My gas bill is $200 a month. My electricity is about $100, $150 a month. And my water has been about $100 a month. But I'm hoping that goes down since I fixed the toilet.

• Paul Solman:

  But when you subtract his Medicare Part B premium of $170, he's underwater by more than $100 a month, sustained by SNAP benefits, food stamps. He says he can't even afford the $2 lunch at the senior center.

  Of course, all these folks want to know just what we all do: How long will the current inflation last? And it provokes furious debate among economists, including a famous one loudly unconcerned a year ago

• Paul Krugman, Columnist, The New York Times:

  I was relaxed about the inflationary outlook.

• Paul Solman:

  Nobel laureate Paul Krugman has been humbled in retrospect.

• Paul Krugman:

  I was wrong. It turns out that inflation is coming way higher than I expected.

• Paul Solman:

  But Krugman himself now asks, what's the cure?

• Paul Krugman:

  Is it simply, let up on the gas, maybe tap the brakes, or is it slam on the brakes?

• Paul Solman:

  Well, there are simply too many unknown unknowns to know, it seems.

  But then, as people from Hollywood producer Samuel Goldwyn, to physicist Niels Bohr, to baseball's Yogi Berra supposedly all said, forecasts are difficult, especially about the future.

  But, hey, we will be living that future, sooner and later.

  For the "PBS NewsHour," Paul Solman.