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Maribel Velasquez, a single mother of five living in Chicago’s Little Village neighborhood, made the difficult decision this year to leave her job at a factory in Bolingbrook. because she couldn’t keep up with gas prices and pay for childcare at the same time, she said.

She was making just over $500 a week, but “I just didn’t know where the money was going,” Velasquez said as she cooked elots on the corner of 26th Street and Millard Avenue. Instead, the mother opened a fruit and corn shop, hoping to earn enough to pay the rent and buy food for her children. The two youngest sat on the sidewalk while she served customers last month.

But things were not going well, she said. After food prices went up, she also increased the prices of sliced ​​watermelon and other fruits in her own shop. The mixed cup cost $9 and one cup with fruit was $8.

“Everything has gone up in price and it’s so worrisome because people don’t want to buy anything either,” she said. “At least now my kids have a place to sleep and food, but it’s getting harder every day.”

Although she said she gets some government help — a Link card given to her children — “I can’t keep up.”

That refrain was heard throughout the city long before the Federal Reserve announced a 0.75% interest rate hike on Wednesday. The hope was that higher interest rates would help fight inflation, which surged 8.6% year-over-year in May, officials said.

It’s the biggest 12-month rise since 1981, according to the Bureau of Labor Statistics, hitting the wallets of Chicagoans and everyone across the country as they try to keep up with food prices to a gallon of gasoline.

But despite rising interest rates, relief from inflation won’t come quickly, warned Philip Brown, clinical professor of finance at the Kellogg School of Management in the Northwest. Despite the Fed’s rate hike, Brown expects inflation to remain high throughout this year and likely into 2023. And while he thinks the Fed’s decision is the right one, he said the move would almost certainly slow the economy and even lead to a moderate recession.

Rising interest rates are making it harder for people to borrow money, Brown said. “Therefore, people will cut their spending, which will lead to a slowdown in the economy.”

According to him, the people who suffer the most from inflation “will also suffer the most from rising unemployment.” “It will only make things worse for those who are struggling.”

The cost of food consumed at home has risen nearly 12% over the past year, according to the Bureau of Labor Statistics. Prices for meat, poultry, fish and eggs increased the most – by more than 14%. The cost of eating out, including at restaurants, rose 7.4%.

And while most federal nutrition programs, such as the federal Supplemental Food Assistance Program, are adjusted for inflation once a year, families currently seeing food prices rise will not see an increase in their assistance until October.

Chicago food pantries, which have their finger on the pulse of hunger in the city, say there has been an increase in demand since early 2022.

Greg Trotter, spokesman for Nourishing Hope, a food pantry and social services organization formerly known as Lakeview Pantry, said the organization is dealing with rising food prices and donor fatigue while seeing increased demand. Visits to the food program in 2022 increased by almost 40% compared to the same period last fiscal year, Trotter said.

“We are fully prepared for this to be a long-term economic crisis for many of our neighbors in need,” he said.

Velasquez said she is grateful for the little money she makes. sell fruit and corn, and through the efforts of community organizations in the area to provide some help to other families like hers.

Now that the Velasquez kids are out of school, she says, “food is even more needed, they want to eat all day.” The mother plans to find help at the newly opened fresh food market, which sells free food to families in the Little Village area.

Food insecurity levels remain elevated from pre-pandemic levels, according to a study by Northwestern Professor Diane Whitmore Schanzenbach for the Greater Chicago Food Depository. But families of color with children suffer the most. According to the data, about 32% of black families and 28% of Hispanic families with children suffer from food insecurity.

The Pan de Vida Fresh Market, which opened this week on South Lawndale Avenue, was created through a partnership between New Life Centers and the Greater Chicago Food Warehouse. He immediately began to serve about 200 families a day.

It aims to deliver fresh and culturally appropriate food to the community in a dignified manner. Resembling a grocery store, people can walk in and choose what food to take home. There are fruits, vegetables, meat and dairy products.

“The impact has been huge,” said Pastor Matt De Matteo. “With gas station prices and grocery store prices, even families who have jobs need help, which is a huge relief.”

The ongoing economic struggle has only widened the gaps that the Big Food Vault hopes to close, its leaders say. From June 2020 to May 2022, the Great Food Storage provided a total of 16,854,834 pounds of food to New Life for free to distribute to those in need.

“This is not just a story about more people in need; it became clear that the gap had widened, households with children and households of color, and therefore households of color with children, were further affected by food insecurity,” said Kate Mair, depository CEO.

And it’s not just the cost of food that makes many local families struggle.

The gasoline index rose 48.7% over the past year, according to the Bureau of Labor Statistics. The average gas price in Cook County on Thursday was about $6 a gallon, according to the AAA, which is 20% higher than the national average of $5 a gallon and 10% higher than the average gas price in Illinois.

Patrick DeHaan, head of oil analysis at GasBuddy, said Thursday that a combination of factors is pushing up the cost of gas this month, most notably Russia’s incursion into Ukraine and increased demand from drivers arriving after many refineries shut down during the pandemic.

BP, ExxonMobil, Shell “All the oil companies started to lose money with the arrival of the pandemic, because almost overnight they had a sharp drop in consumer demand,” DeHaan said.

While many drivers in pain at the gas station grumble about price gouging, DeHaan said the rise in gas prices is driven by a market not unlike a shortage-driven rise in housing prices in the Chicago area.

“You need refineries to be able to produce oil, and when you don’t have as much capacity and there is demand, you will charge more,” he said. Sanctions against Russia, one of the world’s largest oil producers, have also contributed to a reduction in supply at a time when the global economy is recovering from a downturn during the pandemic, DeHaan said, leading to an increase in oil demand. DeHaan added that gas inventories in the Midwest “are at their lowest seasonal level on record” since 1990.

Auto insurance rates in Illinois have also risen in recent months. The three largest auto insurers in the state — Allstate, State Farm and Progressive — have filed for rate hikes this year following cuts and discounts in the early days of the pandemic. Among the reasons for the increase in premiums are rising prices for new and used cars, disruptions to the supply chain, labor shortages and rising medical costs, industry analysts said.

In one example, State Farm recently filed for a 3% increase with the State Insurance Department that was due to take effect on Monday after a 4.7% increase in March. Combined, these two increases mean that State Farm customers will pay approximately $59 more for each car insurance per year.

Public transit agencies have sought to capitalize on rising gas prices to encourage travelers and commuters to switch to trains and buses rather than cars.

Metra and CTA officials said passenger numbers on both systems are on the rise this year. Gasoline prices likely play a role, although there is no way to measure how gas prices compare to other factors causing a surge in passenger numbers, such as summer events or workers returning to offices even a few days a week, they say.

Meanwhile, local families will have to deal with all the recent price increases, both for basic necessities like food and transportation and the pressures that come with them.

Evelyn Figueroa, director of Pilsen Food Pantry, said the institution had to triple its food budget compared to last year. At the same time, demand for food warehouses began picking up in February and has remained strong ever since, she said.

“The people that will be most affected by the economy will be low-income households, low-income families,” said Figueroa, who is also a professor of clinical family and community medicine at the University of Illinois at Chicago, “because they don’t have insurance.” .

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