World News: The Daily Money: High gas prices hit working-class Americans hardest

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Wednesday, March 9

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Good morning and happy Wednesday, Money readers. Jayme Deerwester here with you again, While taking the dog out early this morning, I saw some snow on the ground and realized Third Winter has arrived following the Spring of Deception this past weekend. Oh well, it was nice while it lasted.

🗞 News you should know 🗞

Just as the sudden increase in gas prices has hit unevenly among regions – an average $5.44 a gallon in California vs. $3.73 in Missouri on Tuesday, AAA reports – they also have socked some professions harder than others.

Some are obvious. Drivers for ride-hailing services like Uber and Lyft who drive their own vehicles and have to pay for their own gas are debating whether their gigs are still worth it. The same goes for food deliverers. The trucking industry is also in trouble, especially since many drivers are owner-operators who must buy their own fuel.

But those who drive for a living – as well as workers with long commutes – aren't the only ones who will feel the most pain from gas prices that averaged a record $4.17 a gallon Tuesday, up $1.40 from a year ago. USA TODAY talked to shrimp boat operators, blacksmiths, mobile pet groomers, limousine operators, real estate brokers, hospitality workers and gardeners to see how high gas prices are impacting their businesses.

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💡 Daily insight 💡

While the double-whammy of high gas prices and inflation is a frustration for all of us, a Bank of America report last fall found that inflation hurts a few groups the most: Black and Latino communities, rural households and households without a college degree.

These categories of people make up a greater portion of working-class communities and have a higher likelihood of working minimum- and low-wage jobs. Due to inflation, they are now spending a greater portion of their income on goods and services on top of dealing with the disproportionate financial strain borne by the pandemic.

Not only are they spending more, but the cost of items on which they spend their money is also rising faster than for those in higher-income brackets. London School of Economics study found that low-income families experience a rate of inflation that is actually 0.5 percentage points greater than that of high-income families.

💵 All taxes, all the time 💵

If your debt has reached the point where it's become unmanageable, it may be time to look into doing a debt settlement, in which a creditor agrees to accept a smaller payment than what's owed in exchange for leaving you alone. This way, they get some amount of money rather than run the risk of having to keep chasing you down to potentially get none.

But when you do a debt settlement, the amount of your debt that's written off is reported to the IRS. And it's generally considered taxable income. If you do a debt settlement this year, you may end up owing the IRS money next year when you file your 2022 tax return.

🎶 Mood music 🎶

Today's lyric comes from Doms Gauge's "Make Ends Meet" : "Yeah we tryna make ends meet. Keep rolling till the tank's empty. I hope you hear me loud and clear: We gonna make it out of here."

LISTEN WHILE YOU WORK: There's some swearing at the end of the song – and no clean version – so I can't put it in the playlist, but you can still listen it on Spotify. You can also hear just about every track I've quoted in the newsletter in the Daily Money Mood Music playlist.