Labor shortages and inflation across Southern Colorado, what's causing it?

Labor shortages and inflation across Southern Colorado, what's causing it?
Posted at 8:03 PM, Jul 07, 2021
and last updated 2021-07-08 08:37:09-04

COLORADO SPRINGS — In the Southern Colorado community, experts are reporting inflation and shortages across the board. But what's causing this and how long could they be around for?

Labor shortages and specifically truck driver shortages are among some of the biggest the area has seen in recent weeks and months. Those trucks are carrying fuel, groceries, and household items.

Meanwhile, a local expert said that trucking companies that made decisions early last year when the pandemic was just beginning are now being felt this summer.

"I do think there are a lot of people who left the industry or who were pushed out of the industry a year ago and have not returned," said Eric Liebold, a partner at Chief Petroleum, a fuel company that's been in Colorado Springs for 55 years. "When companies laid off all their employees, and business dropped, then you saw an unbelievable increase in demand once again, but the staff has not returned."

Liebold said last year, Chief Petroleum kept all their employees on board and didn't lay off any drivers, so they haven't had issues with a lack of drivers. In some instances, they're overstaffed, but he knows the same is not true for other local companies.

"In my time here, I have not seen a shortage of staffing in the way that we've seen it," said Liebold. "But I don't think it's just truckers, I think it's across the board. You're seeing a lot of different industries handling and dealing with different issues out there."

Liebold mentioned now, it's hard to find qualified workers which he believes is a concern for many industries even outside of trucking.

"I think whether you're in the restaurant business or the landscape business, you're struggling with staffing. When you take that step further, and you're hiring highly qualified individuals who need hazmat and CDL's, it really puts a tough situation for companies to try to bring in those people," said Liebold.

Liebold also said trucking companies are having a hard time keeping up so now, many have had to provide incentives.

"Trucking companies are offering incentives and significantly higher pay than we were a year or 18 months ago. It has hit the industry hard," said Liebold. "We had to address an increase in pay in order to stay competitive in the market because there's definitely an increase in wages at other companies."

The trucking industry is not the only one facing a few challenges though.

"Almost every business is saying they have a shortage of something right? And that is exacerbated by the fact that people are trying to buy more because they have more money," said Tatiana Bailey, the director of the UCCS Economic Forum.

In regards to shortages and inflation, she says, "I've never seen anything like this, but part of what's unique about this situation is that it's on the demand and supply side."

She also mentioned more households have more savings to spend now, because of stimulus checks and lower interest rates as a result of the pandemic.

"If we look at the money supply in January 2020, it was about $15 trillion, and now, it's about $20 trillion. There's been a 30% increase," said Bailey. "Even though there are households that are really hurting, on average, people have more money, so you have more money out there for people to spend, chasing fewer goods."

Meanwhile, in a global economy, she said for things to get back to 'somewhat normal,' most countries would have to get most of their citizens COVID vaccinated.

"It's probably going to take at least a couple of years, and a lot of the cheap goods come from developing countries which are precisely the ones that are still struggling with the disease," said Bailey. "Those supply chains have been broken and in a lot of cases, these other countries are still dealing with a high COVID-19 burden."

Liebold says the hiring shortage in the trucking industry will likely continue as we head further into the busy travel season. That means there may be a few more national and local gas and fuel shortages soon, but there is no reason to panic or be concerned as a community. Liebold mentioned Chief Petroleum is not experiencing issues with delivering fuel, but there's been refinery maintenance, both planned and unplanned, on the only refinery in the state of Colorado which has caused supply disruptions.

Although it's hard to predict when many of the shortages and inflation will go away, experts say it's not a bad idea to make adjustments or changes to your household budget to mitigate some of the price increases.