How does an increase in inflation impact the real income of individuals in an economy characterized by significant income inequality?

When inflation rises, it means that the prices of goods and services increase, making it more expensive for everyone to buy what they need. For individuals with lower incomes, this can be especially challenging because they often spend a larger portion of their earnings on basic necessities like food and housing. As prices go up, their money doesn't stretch as far, leading to a decrease in their real income, which is the purchasing power of their earnings after accounting for inflation. On the other hand, wealthier individuals may be less affected by inflation since they have more savings and investments that can keep up with rising prices. For example, if a low-income family earns $2,000 a month and inflation causes prices to rise by 5%, they may find that their real income now feels more like $1,900, making it harder for them to afford essential items.