UW economics professor explains statewide inflation, how long it could last

Washingtonians may be surprised when paying more at the grocery store, but it’s an expected consequence for economists like Will McGuire, an associate professor of economics at the University of Washington Tacoma.

“In reality, the average retail price of gasoline right now is pretty much the same as it was in May of 2019,” McGuire, who teaches at UW’s School of Interdisciplinary Arts, said. “Gasoline actually decreased in price pretty significantly last summer. The average retail price across the whole country fell to about $2 per gallon.”

As McGuire explained, inflation is a general rise in prices.

“When we talk about inflation, we’re talking about a broad-cased increase in prices. So it’s not just if the gas price goes up,” McGuire said.

Although price drops last year explain some increasing rates, McGuire also said there’s an issue with supply and demand.

“We also can’t deny that a big part of the story here is that there are real shortages out there,” McGuire said. “On the one hand, (inflation) is something that we might expect as we return to normal. But it’s also a symptom of how not normal things still are.”

Grocery prices on the West Coast have increased since April 2020, according to the U.S. Bureau of Labor. For example:

• Sirloin steak is up 12%.

• Cheddar cheese is up 6%.

• Ice cream is up 4%.

• Oranges are up 10%.

• Bananas are up 7%.

The increasing rates on everyday items are a daily issue for Corie Cameron and Sean Guay, owners of Crisp Greens in Tacoma.

“Every restaurant is sending everything out in to-go containers, and I think that’s creating more demand. They’ve gone up maybe $5 a case,” Cameron said.

“The past couple months, we have started to see an increase in certain things,” Guay said. “Protein and things made with oil, specifically.”

McGuire said businesses like Crisp Greens could make fewer profits, even with increasing clientele. Businesses would have to increase their own prices to counterbalance the rise in costs of products, but Crisp Greens owners plan to hold their prices the way they are.

“I don’t know how much longer the tunnel is, but I can see the light. It’s really about how can we get the economy open again,” McGuire said. “Until that happens, I think we’re going to have to keep dealing with this inflation. It’s really just a matter of allowing supply to catch up to demand.”

Cox Media Group