A look at why prices are up in Will County – and how you can cope

Joliet resident Ethel Garrett, who’s retired, is paying close attention to increases in gas and food prices.

Garrett said one of her favorite prepared meals used to cost $1.50. But the price rose to $2.12 and then $2.24. Another staple item was $1.99, then $2.49 and then $2.99.

“That is huge jump,” Garrett said. “I can understand for an item to go up but that much is out of control.”

To counteract rising costs, Garrett said she “looks for bargains” at stores close to home as opposed to her favorite stores. She combines errands into one trip, avoids impulse purchases and doesn’t make “just fun trips anymore.”

“I just don’t want to drive that far because of the price of gas,” Garrett said. “If I’m going to be out and about, I make sure there is a purpose for it.”

Garrett said she is OK financially, but she is frustrated by all the price increases.

“It just cramps your style a little bit and makes you think twice before spending,” Garrett said.

Why is the cost of living so high right now?

Wei Chen, associate dean and professor of economics at Lewis University’s College of Business in Romeoville, sees three major reasons for today’s high inflation: supply, demand and shock.

Chen said in an email that COVID-19 significantly affected the supply side of the economy that created shortages. But the demand for goods and services is rising as people’s lives are normalizing.

“The increased demand, coupled with supply side issues, pushes up the overall price level,” Chen said in an email.

In addition, the Russia-Ukraine war led to “a hike of oil prices,” which affected production costs, Chen said. So producers and suppliers pass increased production costs to consumers.

Tammy Batson, director of the Center for Economic Education at Northern Illinois University, agreed that inflation is tied to supply and demand.

“At certain times we want more of things and certain times we want less of things. At certain times strawberries are a dollar and sometimes they are three dollars,” Batson said. “Inflation is just tracking how all these prices are moving.”

A number of factors contribute to the fluctuation in prices: spending habits, interest, scarcity, government’s fiscal policies. The most extreme is the “spiral” of hyperinflation where “inflation chases inflation,” Batson said.

“As prices go up, workers say, ‘Hey. I need more money,’ and that makes prices go up even more,” Batson said.

Right now, service prices are particularly high, such as the restaurant industry and delivery services. This latter is “highly inflationary” due to gas and wage increases, Batson said.

But simply paying people more money isn’t necessarily the answer.

“The more money I make, the more money I have to spend. The more money I make, the more money goods cost,” Batson said. “That’s inflation chasing inflation.”

One reason why prices are high is because COVID-19 caused people to curb their spending habits for two years and stayed indoors, she said. Now people have a “pent-up demand” for certain products, which causes rapid price increases.

What’s uncertain is if prices will continue to rise and if they’re an indication of what we’ll expect in the future, she said. Furthermore, would these same prices seem high if they’d risen gradually over the last two years?

For instance, the price of gas in 2007 was $3 a gallon.

“I don’t think the price of gas will be as low as it had been in the past,” Batson said. “I think it’s a little too high now. Hopefully, it will stabilize around the $4 mark or below. But it will make some of us make big changes on our driving habits. This will change into more stay-at-home work to convert the high gas price.”

That’s the upside of inflation. It changes people’s habits and creates “new and better outcomes,” Batson said.

“There are positives to inflation,” Batson said. “It just doesn’t feel that way now because everything costs more.”

So how to cope? Michael Krivich, 68, of Plainfield offered some suggestions in his blog post: “Lessons From Living in the Great Inflation of 1965-1982, 10 Saving Tips for Today.”

In providing historical context for inflation, Krivich said today’s inflation is nothing compared to the Great Inflation of 1965-1982 and that the U.S. is currently not in a hyperinflationary period.

But Krivich did offer some strategies for survival: cut back on driving, clip coupons, use cashback apps and rewards programs, get a roommate, shop at less expensive grocery stories, change overall buying habits.

Most of all, he said, don’t panic. Realize this, too, shall pass. Develop self-reliance.

“Nobody is going to come to your rescue,” Krivich said.