Inflation is hitting San Mateo County

For Normandin, supply chain issues have caused major headaches. Oil-based products have become difficult to obtain, he said, which means that practically every car part is now much harder to come by. Normandin has been forced to raise new car prices by up to 10% to cover increased costs, and has had to buy back used cars for more than their sales price. Labor prices have also risen, and the dealership is having difficulty finding employees to work entry-level positions.

“It’s been kind of blow after blow,” he said.

Labor shortages have also posed a problem for Aaron Qian, owner of Bay Area-based boba company TeaHut. Since last year, the small business has lost employees to the health care and hotel industries. Teahut has had to raise its starting wage by several dollars.

“It’s really stressful,” Qian said.

Like the Normandin dealership, TeaHut is also dealing with supply chain problems. Suppliers have raised their prices by 20%, forcing Qian to raise drink prices to cover costs.

Despite current challenges, both business owners remain cautiously optimistic. Business at the dealership is still good, and Normandin is not concerned about profit.

“While we’re doing fine economically and profitabilitywise, it’s very uneasy to run a business [right now],” he said. “It’s very unsettling trying to run a business when you don’t know what’s next.”

The combination of rising labor and supply costs can pose serious problems for small businesses like TeaHut. However, Qian feels encouraged by other small business owners like him, mentioning a friend who runs a nearby chicken and rice restaurant.

“He convinced me, in a way, that we can save ourselves,” Qian said.

Qian said that he is not overly concerned about the long-term effects of inflation on his business.

“I think we are an essential business,” he said. “[To] eat and drink, it’s essential … so I’m not too worried.”

Impact on families

Many families have faced different kinds of struggles than businesses. While Normandin and Qian are confronting labor shortages and supply chain problems, basic living expenses are causing anxiety among parents and families.

“The basic things you have to pay for to live successfully in this area have gone up [in price],” Jenisa Thompson, a stay-at-home mom of two and president of the Foster City Parents Club, said. She said that her PG&E bill has almost doubled in recent months, and that club membership has dropped because people are unable to pay the fee to join.

“The cost of living in California, especially the Bay Area, is so much higher than in other places,” said Emily Chin, a San Mateo resident and a student at George Washington University in Washington, D.C. Though her family isn’t experiencing much anxiety due to inflation, she said, they are very aware of it.

“Gas … is the biggest thing that everyone can see,” she said.

As of July 20, the average gas price in California was $5.843 per gallon, over a dollar more than the national average, according to AAA. In early June, a gas station in Mendocino set a national record when it charged $9.60 per gallon, according to ABC30 Fresno.

For Thompson’s family and the Foster City Parents Club, inflation means more than just high gas prices. In addition to seeing membership fall, the club also has to contend with less funds and fewer events. They have partnered with the San Mateo Parents Club through the end of the year so that the struggling clubs can preserve a sense of normalcy.

Thompson has seen more people participating in local “Buy Nothing” Facebook groups, where families can pass items between themselves instead of buying new ones. The parents club has its own “classifieds” page for members, which operates in a similar way by allowing parents to share diapers or outgrown clothes, passing items on or selling them for low prices.

Like many other families, Thompson is worried about managing the current situation in her personal life. Her energy bills are especially high, and have become a priority.

“If it’s PG&E or new clothes, I’m paying for PG&E,” she said.

She said the hardest part of the recent economic turmoil is “that sense of hopelessness … of ‘we can’t do it anymore.’”

Despite exhaustion from parenting and work, Thompson has considered taking an overnight shift, sacrificing her sleep. However, she still projects optimism. She said she is learning how to reassess the idea of “normal” and adjust. She has started pet-sitting from home, which provides an extra source of income while allowing her to take care of her two young children. She said that as long as her family is happy, she doubts she will take the night job.

“I’m OK with having less right now and being with my kids while they’re kids,” she said.

How long will it last?

Redwood Shores financial advisor Steve McCarthy is optimistic that this inflation will be temporary, but said that a recession is still very possible.

“[There is] maybe a 50-50 chance that we’ll have a recession in the next year, but the probabilities are creeping up,” he said.

McCarthy believes that economic uncertainty will last through the end of the year. In the meantime, he is hopeful that gas prices have already peaked and will continue to drop along with the price of oil. Overstocking of items at many retailers is likely to lead to discounting, which is another possible source of relief for consumers. If a recession does come, he believes that it will be short and fairly mild.

“I think a lot of this is going to sort itself out,” he said.

Meanwhile, Thompson is trying to manage her expectations and hope for the best. She said that a community mindset has gotten her and her community through hard times, and emphasized that “it takes a village.”

“I think everyone’s in a similar boat,” she said.