How inflation affects a Central California couple in their 60s
At 78 years old, Antonio Lomeli, a Grayson resident, still works at the barber shop he opened in Patterson in 1994, working around 45 hours per month. This is the maximum he can work without losing Social Security benefits. As his 72-year-old wife Yolanda prepares to retire from her daycare career, he must continue to cut.
Living on social security alone is simply not enough, and with the inflation rate at its highest in decades, Concern over the affordability of food and health insurance increases for the couple who say they are spending their money faster than ever. Even though the two are tired, Antonio says he doesn’t know when he can hook up his mowers and retire.
“I never thought I would be in this position” Antonio said in Spanish.
It’s not quite the life he imagined giving Yolanda when they decided to say “yes” when they were just teenagers. Yolanda says she wasn’t initially interested in Antonio, who worked as a field worker alongside her father. But when he took his guitar to play for her, she fell madly in love and had four children with him soon after getting married.
Yet since Yolanda was a little girl, she wanted more for herself and her family.
“I had big dreams of studying,” Yolanda said in Spanish.
So, at the age of 30 and pregnant with her fourth child, the stay-at-home mom enrolled in Modesto Junior College to study child development. About a year later, she graduated as an associate and landed at her current daycare job in Patterson. She earns around $ 51,000 a year, but that is all about to change when she retires in January.
Life took a peek at these two when Antonio got injured on the job and couldn’t get back to being a field worker again. However, he was retrained as a barber and opened his own shop.
Antonio says he likes to cut his hair. He has been in the same location for so long that he says he has built a great relationship with the community and his clients are begging him not to retire.
However, business is not even half of what it was before the pandemic, when he was making around $ 37,000 a year, not including around $ 18,000 a year in Social Security benefits. It’s always open during normal hours, but says there have been many days lately where hours have passed without a customer in the chair.
Because of the virus, “a lot of people are still afraid to go out,” he said.
Antonio believes the fear of catching the virus while having their hair cut keeps clients away, and that the economic impact of the pandemic coupled with inflation is causing people to cut their hair at home. With COVID cases on the rise again, he says he doesn’t know how long his business will be able to survive.
The total monthly cost of running his business is around $ 900, almost a third of his new income, he said.
“The business is no longer a business,” Antonio said, explaining that expenses are starting to outweigh income.
Industries such as child care, which Yolanda is retiring from, were already struggling with razor-thin profit margins, but faced an even greater financial challenge when enrollments in July 2020 only remained at 52% of pre-pandemic levels, shows American Progress. An estimated 8,500 daycares across California have closed, leaving tens of thousands of families, especially low-income ones, with few options, reports CalMatters.
The Lomelis say they are grateful that they don’t have to worry about housing since they now own their home. Yet the cost of food absorbs a large part of their income. Antonio says he does his best to save money, like when he goes shopping.
“I go to the store and I’m afraid to see the prices for the meat,” Antonio said. “I try to buy less because if I bought like I did before, I won’t have enough (money).”
But amid rising prices and a pandemic that has hit the economy, a UCLA economist interviewed by The Bee predicts there may be a silver lining in the coming year. .
Why is inflation increasing?
There are two main causes of rising inflation, said Jerry Nickelsburg, director and professor of economics at UCLA. One of the reasons is the increase in the price of oil and energy.
Electricity allows people to heat their homes and businesses to manufacture goods. It is produced by burning petroleum to heat water, which produces steam that produces electricity, according to the United States Energy Information Administration. But oil prices collapsed near the start of the pandemic, and as a result, construction of the drilling rigs needed to extract the oil came to a halt, Nickelsburg said.
However, “they are being built again… and we are seeing the oil prices go down,” he said.
Nickelsburg said price and supply chain constraints also play a role in rising inflation. An example of this can be seen in the demand for automobiles and housing.
Manufacturers have not been able to produce vehicles quickly enough to meet demand, and the vehicles they have been able to produce have not been shipped due to the pandemic. Nickelsburg further explained that the inability to get vehicles to dealerships has caused people to buy the available used vehicles, driving up auto prices overall.
With more Americans working from home, the high demand for larger living spaces is not keeping up with the low supply available, he said. Additionally, cash investors who have readily available funds to secure real estate properties have taken the opportunity to do so during this time. These two forces have pushed house prices through the roof.
“When the parts are at the dealership, those prices will go down,” Nickelsburg said, assuring that the situation with the auto industry would soon be resolved. He is not sure he can say that about the accommodation. His prediction, however, is that house prices in 2022 will not rise as much as they are now because consumers begin to push back on purchases.
“After 2022, we might see inflation rates similar to what we’ve seen over the past decade – quite low,” he said. He warned, however, that the protracted pandemic means a risk of worsening inflation.
Woman retires by leap of faith
It’s the risk that makes Yolanda nervous as she moves away from her career, where she will drop from an annual income of $ 51,000 to around $ 18,264 in Social Security upon retirement. Her husband is already insured by Medicare, but she fears that with the rising cost of living, she will not have enough to afford health insurance.
“I will have to pay for health insurance out of pocket,” she said, believing that she is making too much money to be entitled to health insurance.
However, a retiree can claim Medicare regardless of their income, but would have to pay a higher premium based on that person’s income, the official government website says. So a person who paid Medicare taxes while working could avoid paying $ 499 per month for hospital coverage, or Medicare part A, and would pay $ 170.10 per month for medical insurance, or Medicare part. B, if that person earns less than $ 91,000 or $ 182,000 for couples.
Coming out of 2021, during which she contracted COVID-19 and lost her younger brother, 42, to cancer, Yolanda said she was ready to risk her retirement. She feels in her lungs and in her body that her health has deteriorated, so she intends to make the most of the years she spent with her parents, who live next to her.
On the other hand, Yolanda said her husband told her that the day he could no longer work, he would rather die. It’s the pressure of wanting to provide his wife with financial security that keeps him at work, he said.
Yet as the barbershop business goes downhill, he begins to realize that his wife may be right. That even if they will have to live on a tight budget, it is better to step away from work while being in good health so that they can enjoy the rest of their life, he said.
Yolanda said she will be retiring in mid-January. For now, Antonio plans to continue working, but is strongly considering closing his shop.
“We will have to be very conscious of our money,” Yolanda said. But, “as long as I can get by … I’d rather take advantage of my parents.”