Maribel Velazquez, a single mother of five who lives in Chicago’s Little Village neighborhood, made the difficult decision to quit her job at the Bolingbrook factory this year. because she couldn’t keep up with gas prices and pay for day care at the same time, she said.
She made just over $500 a week, but “I just didn’t know where the money was going,” Velazquez said as he prepared elots at the corner of 26th Street and Millard Avenue. Instead, her mother set up a store to sell fruit and corn, hoping to earn enough to pay the rent and buy food for her children. Two of the younger ones sat on the sidewalk as she served customers last month.
But business wasn’t going well, she said. After food prices soared, she also increased the prices of her sliced watermelon and other fruits in her own business. A mixed glass was $9 and a single fruit glass was $8.
“Everything has gone up in price and it’s very worrying because people don’t want to buy anything either,” she said. “At least now my kids have a place to sleep and something to eat, but it gets harder every day.”
Although she said she gets some help from the government – the Link card that is provided to her children – “I can’t keep up”.
It’s a refrain that was heard across the city well before the Federal Reserve announced Wednesday that it was raising interest rates by 0.75%. The hope was that higher interest rates would help fight inflation, officials said, which in May rose 8.6% from a year earlier.
That’s the biggest 12-month increase since 1981, according to the Bureau of Labor Statistics, hitting the wallets of Chicagoans and everyone else across the country as they try to keep up with everything from the price of groceries to a gallon of gas.
But despite rising interest rates, relief from inflation will not come quickly, warned Phillip Braun, a clinical professor of finance at Northwestern’s Kellogg School of Management. Despite the Fed’s interest rate hike, Braun said he expects inflation to remain high throughout this year and likely into 2023.
Rising interest rates make it harder for people to borrow money, Braun said. “So people will cut their spending, which leads to a slowdown in the economy.”
The people who are most affected by inflation are “also the ones who will be hardest hit by rising unemployment,” he said. “This will only make the situation worse for those who are struggling.”
Last year, the cost of food consumed at home increased by nearly 12%, according to the Bureau of Labor Statistics. Meat, poultry, fish and egg prices rose the most – by more than 14%. The cost of eating out, including food in restaurants, rose 7.4%.
And while most federal nutrition programs, like the federal Supplemental Nutrition Assistance Program, are adjusted for inflation once a year, families that are seeing food prices soar now won’t see their aid increased until October.
Chicago food pantries, which are keeping an eye on hunger in the city, say they have seen a surge in demand since early 2022.
Greg Trotter, a spokesman for Nourishing Hope, the food pantry and social services organization formerly known as the Lakeview Pantry, said the organization was dealing with rising food prices and donor fatigue while also seeing a high demand. Visits to food programs in 2022 increased by nearly 40% compared to the same period last fiscal year, Trotter said.
“We are preparing for this to be a long-term economic crisis for many of our neighbors in need,” he said.
Velázquez said she is grateful for the little money she earns selling fruit and corn, and has also been moved by the efforts of community organizations in the area to help other families like hers.
Now that Velázquez’s children are out of school, she said, “food is even more necessary, they want to eat all day.” The mother plans to find help at a newly opened fresh produce market that will provide free food for families in the Little Village area.
Levels of food insecurity remain elevated from pre-pandemic levels, according to a study for the Greater Chicago Food Depository by Professor Diane Whitmore Schanzenbach. But those most affected remain families of color with children. About 32% of black families and 28% of Latino families with children are food insecure, according to the data.
The Pan de Vida Fresh Market, opening this week on South Lawndale Avenue, was born out of a partnership between the New Life Centers and the Greater Chicago Food Depository. It immediately began serving around 200 families a day.
It aims to provide fresh and culturally appropriate food to the community in a dignified manner. Resembling a grocery store, people can go inside and choose which foods to take home. There are fruits, vegetables, meats and dairy products.
“The impact was enormous,” said Pastor Matt De Matteo. “With prices at the pump and at the supermarket, even families who have jobs need help and that is a huge relief.”
Continuing economic struggles have only widened the gaps the Greater Food Depository hopes to close, its leaders said. From June 2020 to May 2022, the Greater Food Depository provided New Life with a total of 16,854,834 pounds of food at no cost to help distribute to those in need.
“It’s not just a story of more people in need; What is clear is that gaps have widened, families with children and families of color, and therefore families of color with children, have been impacted even more disproportionately by food insecurity,” said Kate Maehr, CEO of the trustee.
And it’s not just the cost of food that is rising and causing many local families to struggle.
The gasoline index is up 48.7% from last year, according to the Bureau of Labor Statistics. According to the AAA, the average gas price in Cook County on Thursday was about $6 a gallon — 20% higher than the national average of $5 a gallon and 10% higher than the average price. of gas in Illinois.
Patrick DeHaan, head of oil analysis at GasBuddy, said on Thursday that a confluence of factors is pushing up the cost of gas this month, most notably the Russian invasion of Ukraine and increased demand from drivers arriving after the closures. many oil refineries during the pandemic.
“BP, ExxonMobil, Shell — all the oil companies started losing money with the arrival of the pandemic, because they had a massive drop in consumer demand almost overnight,” DeHaan said.
While many motorists feeling the pain at the pump are complaining about the price hike, DeHaan said the rise in gas prices is market-driven, not unlike the rise in home prices in the Chicago-area market being fueled by a shortage of gas. offer.
“You need refineries to be able to produce oil, and when you don’t have as much capacity and there’s demand, you’re going to charge more,” he said. Sanctions on Russia – one of the world’s biggest oil producers – have also served to reduce supply at a time when the global economy is recovering from the slowdown during the pandemic, boosting demand for oil, DeHaan said. Gas inventories in the Midwest “are at an all-time seasonal low” since 1990, DeHaan added.
Auto insurance rates have also increased in recent months in Illinois. The state’s three largest auto insurers — Allstate, State Farm and Progressive — have requested rate increases this year, following cuts and rebates in the early days of the pandemic. Among the reasons for the increase in premiums are rising prices for new and used cars, supply chain disruptions, labor shortages and rising medical costs, industry analysts said.
In one example, State Farm recently asked for a 3% increase from the state Department of Insurance, which was due to take effect on Monday, after a 4.7% increase in March. Combined, the two increases mean State Farm customers will pay about $59 more to insure each vehicle per year.
Public transport agencies have been looking to capitalize on rising gasoline prices to encourage travelers and passengers to turn to trains and buses instead of cars.
Metra and CTA officials said ridership on both systems had increased this year. Gas prices are likely playing a role, although there is no way to measure how gas prices compare to other factors that drive an increase in ridership, such as summer events or workers returning to the office at least a few days a day. week, they said.
In the meantime, local families will have to sort out all the recent price increases, both for basic necessities like food and transportation – and the pressure that comes with them.
Evelyn Figueroa, director of Pilsen Food Pantry, said the facility had to triple its food budget compared to a year ago. At the same time, demand started to pick up in the food pantry in February and has remained high since then, she said.
“The people most affected by the economy will be low-income families, low-income families,” said Figueroa, who is also a professor of clinical family and community medicine at the University of Illinois at Chicago, “because it doesn’t have a safety net.”