“So essentially when the cost of things go up, that reduces the amount of money that people have in their pockets at the end of the day,” said Michael Collins, a poverty researcher at the University of Wisconsin Madison. The biggest driver of the higher poverty rate is also the source of inflation the Fed has struggled with most: “Rent is more expensive, and so rent took away more money out of people’s budgets, and so — as a result — they had less money left over for everything else,” Collins said.
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