To Pete Boland, the co-owner of two Florida taverns in downtown St. Petersburg, it seems like just about all of his business costs spiked in the past year, some more than others.
They took chicken wings off their menus for a while after a national shortage caused prices to skyrocket. They charged $20 more per plate for their annual Christmas seafood platter. And they discontinued the all-you-can-eat crab-leg special on Tampa Bay Buccaneer game days.
“We just couldn’t do it this year,” said Boland, who co-owns both the Galley and Mary Margaret’s Olde Irish Tavern, noting that the price of a case of crab legs jumped from about $300 last year to over $500 this year.
And it’s not just food costs. There have been price increases for things Boland’s guests probably don’t even think about: a drum of fryer oil, up from about $20 to over $50, or a case of biodegradable to-go boxes, up from about $50 to over $100, he said.
“Those are things I can’t even pass the price down,” Boland told National Review. “It’s kind of a direct operating expense. How do I charge the guest more for a product they don’t even eat?”
While inflation has been a nationwide plague this year — the Consumer Price Index climbed 6.8 percent over the year in November, a nearly 40-year high — nowhere has it been worse than in the Tampa-St. Petersburg metro area. Inflation in the Tampa area rose 8 percent in a year in November, the highest rate of any of the nearly two-dozen major metro areas tracked by the U.S. Bureau of Labor Statistics.
Price increases have made it harder for people to feed their families, put gas in their cars, keep their businesses afloat, and afford a place to live. Year over year, food prices in the Tampa area are up 4.3 percent, clothing costs are up 7.2 percent, and rent is up 8.7 percent. Earlier this year, rent in Tampa was growing faster than any other U.S. metro area, according to a report in The Tampa Bay Times. And gas prices in Tampa have spiked a whopping 67.5 percent since last November, according to the BLS, which tracks inflation in 23 American cities and urban areas, separating them into two lists, each reported every other month.
Nationwide, inflation has been driven by a perfect recipe of natural and artificially induced demand, supply-chain bottlenecks, labor shortages, and low interest rates. But the BLS reports show that inflation recently has been a bigger problem in Southern metro areas in states with Republican governors, and in states with generally less onerous Covid-19 restrictions.
In October, the Atlanta metro area led the nation with 7.9 percent inflation. Inflation in both Dallas-Fort Worth and in St. Louis was at 7.5 percent, while the Phoenix-Mesa-Scottsdale inflation rate was 7.1 percent in October. Those are all higher than blue-state cities like New York (5 percent), Boston (5.3 percent), Washington, D.C. (5.8 percent), San Francisco-Oakland (3.8 percent), and Chicago (6 percent).
Economists who spoke to National Review pointed to the general openness of Florida’s and Georgia’s economies throughout the pandemic as likely reasons why inflation has been so pronounced in Tampa and Atlanta. Both cities became popular destinations for people looking to relocate from more locked-down, cold-weather Northern states, and that flood of new residents put intense pressure on the local housing markets.
Abel Carrasco, a licensed mortgage-loan originator in the Tampa area, called the local real estate market “crazy.” Rent “has gone through the roof,” he said, and home prices are up substantially over the last year and a half. People who’ve started working remotely during the pandemic have realized they can work remotely in Florida, where there’s no state income tax, fewer pandemic-related restrictions, and no snow to shovel.
While home prices may be high by Florida standards, they can still seem like a steal to people moving down from New York or Chicago. Carrasco’s concern is that locals are being priced out.
“Probably one in five of my clients is relocating from somewhere else,” Carrasco said. “If they’re going to work from home, they may as well work from home out by their pool, 15 minutes from the beach. The secret’s out, unfortunately.”
In Georgia, economists also have pegged Atlanta’s sky-high inflation and rising housing costs on the state’s booming economy. Atlanta historically has drawn in people looking for an affordable big city that offered lots of opportunities. But Atlanta is becoming less and less affordable.
Stephen Lawson, a spokesman for a political action committee supporting Republican Senate candidate Herschel Walker, argued the inflation in Atlanta is in part due to Democratic policies. He noted that Democratic senator Raphael Warnock — whom Walker is challenging in the 2022 midterm election — voted four times in favor of stopping construction of the Keystone XL Pipeline and has voted for trillions of dollars of new spending in his first year in office.
“From the gas pump to the grocery store, Georgia’s working families are feeling the devastating effects of Joe Biden and Raphael Warnock’s disastrous economic policies,” Lawson said in a written statement.
While other segments of the economy will likely cool off when supply-chain issues are worked out, the real-estate market — especially in places like Tampa and Atlanta — is less likely to follow suit in the near term, said Joel Griffith, a research fellow at the Heritage Foundation.
“I see this as being a long-term problem,” he said. “No matter how you dice this, the house-price inflation is a very real problem. And that really impacts people deciding whether to get married, and sometimes whether to have kids or not.”
Tourists also have flocked to Florida during the pandemic to escape the cold, head to the beach, and be generally free of mask mandates and other virus-related restrictions. Victor Claar, a professor of economics and free enterprise at Florida Gulf Coast University in Fort Myers, noted that airports on Florida’s Gulf Coast have been setting traffic records all year, even in the hot and humid summer, not typically the most popular season for tourism in the state. That flood of tourists has injected money into the local economy and helped the state’s retail and dining sectors to bounce back faster than most. But it’s also helped to push prices up by increasing demand at a time when the supply of labor and goods is constrained, Claar said.
“Florida is a place where, since the beginning, the individual has been relatively more in the driver’s seat in terms of assessing risk and making choices that seem right for them,” Claar said. “Let’s face it, if you’re thinking about making a trip right now, Tampa’s a great place to visit compared to other parts of the country where there may be more restrictions in place.”
Michel Snipes, an economics professor at the University of South Florida, said the inflation in Tampa and elsewhere is evidence of the economy heating up. The 8-percent inflation in Tampa affects everyone, but it’s disproportionately hurting the people who are poor and retirees on a fixed budget. “If I am fixed income, if I am lower income, and I’m seeing these increases in prices,” he said, “that’s really going to impact my standard of living.”
While the inflation problem presents a real challenge to residents of cities like Tampa and Atlanta, for most Floridians and Georgians it’s likely worth the trade off to have a booming economy and strong tourism numbers, Claar said.
“If you’re a Floridian, it’s really great to have people coming back to visit us, especially since we rely on them to pay most of our sales taxes for us, and fund most of the things we do at the state and local level,” he said.
Griffith said it’s just unfortunate that so many people feel compelled to flee their home cities and states to relocate to places like Florida, Georgia, Texas, and Arizona.
“The governments in some of these areas have become downright repressive,” he said. “It’s great that we can chase opportunity and move coast to coast, but people are being forced into leaving their faith communities, leaving their families, leaving their jobs. In places like New York, Chicago, and L.A., they’re being forced to because the management of the cities is so bad.”