Why are YOU Spending so Much Money on Gas?

Why are YOU Spending so Much Money on Gas?

Written by Emma Kocanda, News Editor

Through this time of economic crisis, people globally have seen prices skyrocket in areas such as food, vehicles, and most recently gas with an increase of 14.5%. Due to this major jump, many people are asking why these prices are so high? Well, it is due to inflation, which occurs when there is a growth of total money throughout the economy. This isn’t the only cause. Once people get more money, they start to buy more products. Because of the escalation in demand for these products, the supply plummets. Therefore, business owners raise their prices in order to match the inflation rate. So, what causes inflation in our contemporary society? How are U.S. citizens handling this? When will it all end? 

There are many different factors that affect inflation such as wage growth, oil prices, and increase in productivity. In most recent cases, inflation is a result of COVID-19. Over 22 million employees were let go from their jobs due to the paralyzed economy during the virus. Inflation was taking down many Americans economically. Without jobs, many were unemployed and with increasing prices, many citizens were hurting. COVID-19 led to many setbacks in the economy which led to a major stunt. 

The aftermath of COVID-19 was rough for Americans across the country. Since the economy was just starting to recover, there was still an imbalance of supply and demand. Even though the economy was getting better, many Americans have a fear that they will not be able to fully recover from this detrimental loss. Since COVID set back production by limiting employees, the economy fell. The balance of supply and demand were all out of order and no one could stop it. For years, the virus persisted and so did inflation. 

Due to the rapid rise in inflation, many American families are struggling to stay afloat, especially when it comes to families living paycheck to paycheck. This is extremely damaging to the average American life. Many cannot even afford groceries or transportation for their everyday needs.  For years upon years, families were trying to recover from the inflation in the U.S. Those middle and lower class Americans were at risk of being in debt, losing their house, not being able to feed their families, and many other tragedies that would not stop for a great amount of time. With money dwindling down to basically nothing, citizens were at a loss for what to do. Many are struggling to afford necessities because of the inflation issue. With some making less than $40,000 a year, two-thirds of Americans are struggling just to keep afloat. Because inflation was so high, families had less and less money to spend on the things they need to survive. Gas is not the only culprit of their suffering. Just buying food could be hard, especially for a large family. Who knows how long these families will hold on? 

So, when will everything stop? How can Americans regain traction on their finances? By the end of 2022, inflation is expected to drop to 2.3% from 5.1%. Therefore, struggling Americans will experience a wave of relief after this year. Everyone will be in more control of their financial situation once the end of the year comes.