Inflation is covering a small Texas town, receiving more than 40 million benefits, pensions are not enough to live on
Midland, Texas, USA, is located along Interstate 20, more than a 4-hour drive from the larger city. The remote location makes everything in this town expensive and hard to find. Poor traffic conditions, plus dependence on crude oil make Midland not immune to inflation.
According to Bloomberg, inflation in Midland has fluctuated around 10% over the past 6 months, which is much higher than the national average. It is known that the upcoming US consumer price index CPI is expected to increase by 8.1% in April, cooling slightly from the previous month.
In a remote town like Midland, though, the economic pain seems to have just hit. Even though the central bank raised interest rates by half a percentage point last week, the highest level since 2000, it is still not much compared to the dizzying price increase in the Midland.
According to Bloomberg, the small town will need months, if not years, to “untangle” the “mess” of inflation. These issues are beyond the reach of local authorities, as they relate to Russia-Ukraine geopolitical tensions, supply chain crises and mainland China’s hard-blocking policy.
Inflation creeps into every nook and cranny
Basically, the effects of inflation are creeping into every small business, including Bo Garrison, owner of Permian Dirt Works LLC. Every day, he and 20 other workers will drive about 2 dozen trucks, excavators, bulldozers to dig, level and transport soil to help energy companies.
Mr. Bo Garrison, owner of Permian Dirt Works LLC
Starting last week, this work has been interrupted. An employee at Caterpillar told Mr Garrison that there were no more bulldozers available. The car dealership where Mr. Garrison frequents also announced breaking news: There won’t be a new Ford F-250 in Midland until at least 2023.
This means Mr. Garrison’s company will have to pay more for the repair and rental of bulldozers. Other batch bills are also piling up; even the salary that he “bites his teeth” increased by 20% to retain workers.
“Now I’m praying the equipment won’t break, otherwise fix it,” Mr. Garrison said.
The increase in productivity in oil fields benefits the local economy, but this invisibly puts pressure on consumers and businesses. Non-profit organizations that specialize in helping elderly people repair their homes are no exception. They say the price of water heaters, wood and bulkheads has doubled and forced the use of cash reserves for the first time in its 50-year history.
“When prices spike like this, they won’t turn down. Meanwhile, the demand is increasing day by day. A lot of people need our help. They don’t have the money to fix the house,” said Nathan Knowles, director of a non-profit organization.
People waiting to get food at the Food Bank
People are naturally the subjects most affected by inflation. The rising cost of goods means they can only rely on the Food Bank in Odessa, a city about 20 minutes by car from Midland.
Since January, the line of cars parked outside the Food Bank has been much longer than before. They came to ask for watermelon, bread, and canned vegetables.
“The only thing I can buy at the grocery store is eggs and beans,” said 74-year-old Mr. Jesus. It is known that the pension and allowance of this elderly couple is about 2,000 USD/month (more than 40 million VND), but only a few months ago, the expensive expenses made the other money not be of much help.
“The only thing I know is that prices go up and then go down. But now, I doubt it. West Texas is experiencing double inflation. Initially oil, gasoline, milk and everything else,” said Mr Tippin, a resident in the town of Midland.
“With the cost of living here and inflation, people just won’t be able to keep up,” said Libby Campbell, CEO of the West Texas Food Bank, after noting that inflation is already ingrained in wages. of workers. She also worries that the rise in fertilizer prices – the consequences of the Russia-Ukraine crisis will make the problem worse.
Mrs. Melinda Hernandez, 52 years old
According to Bloomberg, the unemployment rate in Midland is about 3.5%, lower than the annual average, but jobs related to the service sector have not shown any signs of improvement.
Melinda Hernandez, 52, told Bloomberg that she lost her job as an administrative assistant at an energy services company in March. Currently, she works as a part-time delivery driver for a pizzeria for $10 an hour. This middle-aged woman also takes jobs at the local funeral home to cover the income, even though they add up to only half of what it was before.
Hernandez, a single mother living in Midland, is in the same situation. The high cost makes her afraid that she will not have enough money to organize a high school graduation party for her son.
“I don’t want my son to be sad and that’s my fear,” Hernandez said.
At Legendary Barn Door steakhouse in Odessa, Mr. Roy Gillean also had to increase the price of the entire menu, in which the most special dish of the restaurant was the Tomahawk steak, which costs nearly $65. He said he has increased the prices of the dishes many times and will probably push them to $70 to make up for the expensive input costs.
DOES THE FED DECISION REALLY HELP?
Reportedly, based on data released by the US Department of Labor on April 12, the US consumer price index (CPI) increased by 8.5% in March, the highest increase since December 1981. The price increase occurred in all commodities, in which the price of gasoline increased by 48% compared to a year ago. Grocery prices increased by 10% and food prices also increased by 8.8%.
The Fed last week decided to raise the federal funds rate by 0.5 percentage points
The figures are considered the first to show the impact of the Russian-Ukrainian conflict on the world’s largest economy. Along with supply chain bottlenecks, the persistently high inflation rate is expected to continue until the end of this year, even into 2023.
According to the American Psychological Association, the percentage of people facing financial stress has risen to its highest level since 2015. 65% cited financial problems as the main reason for their constant stress. feel anxious, in which the upward trend of prices of essential goods due to inflation is the problem that makes Americans feel the most pressure.
“There is no sign of abating. Inflation is still accelerating, hitting a 40-year high and will increase further in the next few months,” said Greg Mcbride, director of financial analysis at Bankrate.com. .
To address the alarm bells of inflation, the FED last week decided to raise the federal funds rate by 0.5 percentage points. Lending interest rates applied to banks across the state will accordingly be raised from the current 0.25%-0.5% range to 0.75%-1%.
“Inflation is too high and we understand the difficulties that inflation causes. Therefore, we must act urgently,” said Fed Chairman Jerome Powell.
The USD is increasing rapidly recently
However, the Fed’s interest rate hike, according to some experts, also has its own consequences. For example, borrowers have to pay more to pay off credit, while banks are more strict when providing loans. This will certainly pose many challenges, especially for emerging markets with high levels of public debt.
According to: Bloomberg
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