The haves and have-nots, the stark disparity of inflation in the Bay Area
SAN FRANCISCO (KGO) -- Inflation was 9.1% higher in June compared to last year, which is a 40-year high.
Overall, Americans are spending an extra $493-per month, according to Moody's analytics. Across the nation, rents are rising up 25.5% from a year ago.
Consumers are likely to tighten their spending even more in some working-class communities, while other Bay Area residents may see this rapid uptick in the cost of living as a minor inconvenience.
Experts say it's something called "the barbell effect," where the weights - "the haves" and the "have nots" - feel the effects of inflation, but in very different ways.
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"Now you're seeing prices in July in the first half of the month begin to moderate particularly at gas stations we've seen prices come down," said Jeff Bellisario is Executive Director of the Bay Area Council Economic Institute.
Prices in the Bay Area tend to be higher across the board, according to Bellisario, meaning any sort of inflation effect may be felt more here.
"What we see here and what we've had in the region previously is a barbell effect where we have people at the top and we have people at the bottom and fewer people in the middle. What inflation does is maybe drive a bigger wedge between those groups," said Bellisario.
High inflation is hitting some harder than others.
Nonprofits are trying to help those people, while also dealing with the impacts of inflation themselves.
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The news of inflation now being at its highest in decades though comes as little surprise to those who have seen its negative impacts firsthand.
"The numbers of people who are coming to our food distribution sites are increasing again," said Tracy Weatherby, Vice President of Strategy and Advocacy at Second Harvest of Silicon Valley.
The nonprofit said in the worst days of the pandemic, it had nearly 500,000 people a month coming to them for help.
Now, they're close to that again with about 450,000 a month.
"With this kind of inflation, it is really impacting people's budgets, and 60% of the people that we serve, have less than $100 in savings," Weatherby said, "So if you start to add that to increased gas prices, increased food prices, often people need to turn to us in order to be able to pay the rent, in order to be able to pay childcare, so they can keep working."
Demone Carter works with South Bay nonprofit Sacred Heart Community Service.
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He says that inflation puts a brighter spotlight on what so many people have already faced.
"What's happening right now with inflation is just another symptom of a broken economic system, which is basically shutting people out of opportunity and creating these kinds of catastrophes that we're seeing," Carter said.
Sacred Heart says a large part of its focus now is getting donations for its Pack the Back backpack drive to help set students up for the new school year.
So far they have 3,800 families signed up to get a backpack with $100 worth of school supplies.
"That's money that could be going towards food. That's money that could be going towards gas," Carter said. "So while for folks of means, this may not seem like a lot, but this can really be a hardship, especially in situations where parents have multiple children."
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With inflation also impacting the organizations working to help people, they say community support from those who are able to help...is especially welcome.
"When we have this separation between those who have and those who do not have, that's where a lot of these economic problems can fester," Carter said, "We try to get people in proximity with each other because these are your neighbors."
Despite the increased cost of living, one Bay Area benefit is - rent prices have not fully rebounded to pre-pandemic levels.
"We've seen a bit of a drop in population and those folks who have moved away have often been renters," said Bellisario.
According to Zumper, cities like San Francisco and Oakland are still enjoying lower rents brought on by COVID.
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Whereas San Jose has begun to rebound a bit as tech company employees return to the office.
Kyle Holm, VP of Total Rewards Advisory for Sequoia, advises clients on employees' total compensation.
"We have seen some increases in compensation to mitigate the impact of inflation but not to the extent of inflation matching," said Holm.
Which is why Holm says many Bay Area employers continue to be flexible when it comes to working from home saving employees on costs like childcare, gas and food.
He says benefits for working in-office might include lunches or happy hours.
Holm adds some companies are also offering retention bonuses, cash up front for agreeing to work at the company for a certain amount of time.
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