As U.S. inflation hit a four-decade high, rising prices in Southern California — where costs of shelter and food are among the highest in the nation — are warping the fabric of daily life: Shoppers are cutting grocery budgets, businesses are scaling back operations and low-wage workers are seeing their paychecks eaten away at the gas pump.
In a metro area as large as Los Angeles with an economy driven by low-wage work, the effects of inflation — especially gas prices — fall disproportionately on the working class, said Leo Feler, a senior economist at the UCLA Anderson Forecast.Annual inflation in the L.A. metro area, which includes Los Angeles and Orange counties, clocked in at 8% in May. San Diego saw 8.3%, while the Riverside metro area, which includes Riverside and San Bernardino counties, saw a 9.4% inflation rate.
“If you’re consuming a lot more gas, which lower-income families tend to consume, and you’re more dependent on rent, and a larger portion of your paycheck goes to food, you’re losing more purchasing power,” Feler said. To keep up, the organization has had to spend more money buying food. Pre-pandemic, 5% of the food distributed by the food bank was purchased; now that percentage is roughly 15%, Flood said, with the remainder coming from donations. The food bank has also been spending more money on fuel for its fleet of delivery vans and large trucks.
President Biden, in Los Angeles for the final day of meetings around the Summit of the Americas, addressed the latest inflation numbers in a speech at the Port of Long Beach on Friday, reiterating that inflation remains his “top priority.” But citing record job growth, rising wages and an unemployment rate below 4%, Biden asserted that “America can tackle the problem of inflation from a position of strength unlike any other country in the world.”
Grocers say they are absorbing as much of the increases as they can, but with profit margins at 2% or less there is only so much they can do to blunt the price hikes. Transportation, fuel and labor costs are the biggest factors in rising food prices, industry experts say. Further up the supply chain, trucking companies are also feeling the pinch. Southern California gasoline prices have shot up 44% in the last year, and the surge in diesel costs has topped 50% in the same time.