Definition from the International Monetary Fund:
Inflation is the rate of increase in prices over a given period of time. Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country. But it can also be more narrowly calculated — for certain goods, such as food, or for services, such as a haircut, for example. Whatever the context, inflation represents how much more expensive the relevant set of goods and/or services has become over a certain period, most commonly a year.
Gas prices are hovering around $3.50 per gallon in New York, up from an average of $2.15 per gallon a year ago.
Meat, chicken, dairy, eggs, sugar and coffee are among the products that have seen especially large price gains in the past year, Bureau of Labor Statistics data shows.
In the 12 months since last October, the Consumer Price Index has gone up 6.2%, the highest inflation since 1990. The annual price hike rate over the last decade was 1.9%
“The good news is that consumers are putting up a fight against it,” says New York Times opinion writer Peter Coy. He cites the University of Michigan’s Survey of Consumers in which people are asked if they think it’s a good time to buy cars, houses and large household good, and that those numbers have fallen as inflation has hit. “If they thought inflation was going to remain this high or even go higher, they would probably want to buy now to beat the next price hike,” Coy says. “The time to really worry about inflation is when people indicate they’re willing to buy goods even in the face of sharp price increases.”
Miles Crettien, a co-owner of Lunch Nightly at 636 Broadway in Kingston said the eatery, that combines a lunch spot, a restaurant with higher-end dinner offerings along with a bar has faced close to a doubling of the cost of certain goods.
Crettien said the business is in the process of reposting menu items with higher prices to keep up with costs and he feels they’ll have to continue to increase the prices to keep up with inflation.
He said one of the things that has not been greatly affected is the cost of its local meat, though the availability of pork remains an issue. “The local supply chain is way more stable,” Crettien said.
Where they’ve really been hit is in everyday items that come from farther afield like oil and paper goods. “Things we need are significantly higher.”
He said one of their suppliers, Cintas, ran out of soap and detergent forcing them to go out and shop for it at local stores. “The supply chain overseas is disrupted and it’s not even functioning,” Crettien said.
Gabriel Weinstock, also a co-owner who manages Lunch Nightly’s bar said alcohol prices have stabilized for the most part, but wine can still be a bit of a wild card depending on where it’s coming from.
“It’s been great to work with producers in the U.S.,” he said. “Those prices are relatively stable.”
Crettien said they have also been hit with a 30 to 50 percent jump in labor costs.
“We can’t get a dishwasher at less than $16 an hour,” he said. “We’re happy folks are getting paid what they should paid.” But he admitted increased labor costs could eventually sink them.
And he decried other factors that are beyond their immediate control, such as a lack of affordable housing in Kingston that has reached crisis levels.
“Our staff need to live somewhere,” he said. “The only stable market is for people that either own or rent five-plus family units to family members below market.”
A one-bedroom has gone up from $1,200 to $2,200 in a short period of time. And though gas is $3.50 in a city with a strong driving culture, he said doesn’t feel higher gas prices have kept diners away yet.
Samantha Strand, also one of the owners, said amongst all of this they continue to try to balance their menu, with some casual more affordable items interspersed with more expensive higher-end items. “It’s difficult to achieve that with rising labor costs,” she said.
But even as prices increase, Crettien promised that Lunch Nightly will continue to have something for everyone.
“A lot of restaurants coming to a term of reality that this is a thin margin business with, costs of labor and goods increasing,” Crettien said.
“My business is absolutely affected,” says Paul Alexander, who, for 38 years has run Paul Alexander Construction Company, which does renovation and remodeling, mostly in Woodstock. “But I’m more affected by the supply chain disruption. Whereas a few years ago there was reason to assume that if you did a job you could estimate a certain amount and that the estimate would still be valid a few months down the road, when you’d do the job. That is no longer certain.”
Alexander says that he’s had to modify how he does business in order to accommodate for difficulty getting materials and the fluctuation in prices.
“I no longer guarantee a price to people. I can’t promise you what your renovation is going to cost anymore. Materials are traditionally one third to one half the cost of renovation, which is a big price tag. There might be tens of thousands of dollars of material, and it’s going to change between the time I estimate it and get to the renovation. Marvin Windows, which is my preferred window brand — you’d order windows and it would be six to eight weeks forever. Now it’s 24 weeks plus. So it’s much harder to plan out the work.”
And, he says, that one problem leads to another.
“I can’t even guarantee the labor anymore. The supply chain shortage affects my labor…you can’t have carpenters standing around waiting for materials. Plus, there’s a skilled labor market shortage. Inflation is affecting what I have to pay. I’ve happily given raises to my guys. But my material and labor costs have gone up.”
How do clients react to his new procedures?
“It’s a very different climate,” says Alexander. “But everybody is pretty patient, they seem to understand that. There’s such a demand right now for the service I provide, that people are willing to go along with what has to happen. People have a lot of patience and a lot of gratitude for what I do. The price and drawn out time lines…I find the biggest headache is not inflation it’s the supply chain problems.
Is he affected personally by rising costs?
“Interesting question…no I haven’t noticed it. And gas has been this high many times…”
Alexander suggests that high gas prices might have the effect of changing our reliance on fossil fuels, though he does worry about hardships it could cause on working classes…
“We’re making less money,” says Linda Tiano, an owner of Catskill Mountain Pizza in Woodstock. “We haven’t had a problem getting products, but they’re all higher than they used to be. Propane is 120 percent than last year. Produce is up ridiculously; Paper products…right across the board everything is up. Our drivers are still delivering…we were charging $1 for deliveries, but we may have to go to $3…sometimes they don’t get tipped out…for $1, it costs them more than that to drive there.”
“Since COVID, most of our employees are making more than the minimum. You have to pay them to keep them. They get a lot of overtime because of our being short staffed. But how much more can you get for a pizza without going crazy? Tomatoes, cheese flour…we’re taking a loss on items, so we’ll have to increase our prices. People won’t be happy about that…hopefully it will all be over with, and we can reduce our prices.
“Very little has gone down, let’s put it that way. Sometime in the past prices would go down. In summer, veggies and produce you can get them at a much lower price, but this year that hasn’t happened. For the people making minimum wage it’s hard. We’re all struggling with that.
Retail…for you and me and anyone it’s pricey to go shopping now…”
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