Texas is feeling inflation. What’s causing it?
One possible cause is the involvement of Pandemic Unemployment Assistance (PUA) and the Texas Workforce Commission (TWC). Don’t get me wrong, there have been some Texans that have been fine, and even some Texans that are now better off than before COVID-19, like mentioned in the “Abused Unemployment Benefits in Texas” article.
COVID-19 did cause a recession in the request for goods and services worldwide. However, it also went on to cause inflation in the United States. Inflation increases are usually because of base effects, less supply, and more demand restrictions, which affect services.
Base Effects were shown in the beginning months of COVID-19 by the February through April 2020 price decreases, and then the rise in May causing what they expect to be a yearly inflation growth rate for months. There were also disruptions and misalignments in supply chains. This caused the cost of production to increase like the materials needed to make products and the utilities needed to produce. Some of the biggest demands that have been affected for services were restaurants, hotels, and travel providers.
Now Texas feels the inflicted inflation that COVID-19 has caused. There is an increase in the base, supply, and demand, which caused increases in the costs of goods and services because of inflation. Again, this may not be affecting those that were receiving PUA and TWC, but that will change soon. Also, taking into consideration all the essential workers that have been working through all of this, for some, there have not been inflation adjustments in pay.
This causes more issues to be discussed later.