Pumped Up Prices: Unraveling the Hidden Inflation Drivers in the Golden State

Dr. ADAM TABRIZ
3 min readDec 16, 2023

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State of california
Photo by Joel Durkee on Unsplash

The Factors Contributing to California’s Inflation

California’s inflation can be attributed to various government policies and regulations. [1] The state’s leaders have committed $18.1 billion to provide “inflation relief,” but experts warn that this could lead to even higher prices. [2] While California does not control the national money supply, the state’s policies and regulations can impact inflation. For example, California’s high taxes, strict environmental regulations, and minimum wage laws can increase the cost of production, leading to higher prices for consumers. [3] Additionally, the state’s complex and lengthy permitting process for new businesses and construction projects can increase costs.

Another factor contributing to California’s inflation is the state’s housing shortage and high demand. [4] California’s chronic housing shortage has caused sky-high costs, the nation’s worst poverty, and its highest level of homelessness. [5] Governor Gavin Newsom pledged to build 3.5 million new housing units by 2025, but only a fraction of that goal has been achieved. [6] This shortage has increased demand for housing, driving up prices and contributing to the state’s high cost of living. [7] The lack of affordable housing options has also led to a significant increase in the number of people experiencing homelessness, further exacerbating the state’s housing crisis.

The high living expenses in California are another significant contributor to the state’s inflation. [8] The cost of living in California is already more expensive than in other states, and the higher costs are “unreasonable and completely unnecessary.” [9] Rising housing, transportation, and healthcare costs contribute to the state’s high cost of living[10]. Policymakers should focus on supporting low-income Californians to help them cope with rising prices and high living costs. [11] Additionally, businesses are facing rising costs for labor and materials, which can lead to increased consumer prices. [12] Overall, California’s leaders must address these factors contributing to inflation to ensure the state remains affordable and accessible for all residents.

References:

  1. California, Federal Gov’t Set Policies, Programs to Arrest …. (n.d.) Retrieved December 14, 2023, from sacobserver.com
  2. California relief payments could make inflation even worse. (n.d.) Retrieved December 14, 2023, from www.sacbee.com
  3. Will California’s inflation relief plan make inflation worse?. (n.d.) Retrieved December 14, 2023, from www.sandiegouniontribune.com
  4. California housing shortage triggers cycle of despair. (n.d.) Retrieved December 14, 2023, from calmatters.org
  5. California leaders haven’t owned scale of housing crisis. (n.d.) Retrieved December 14, 2023, from www.sacbee.com/opinion/op-ed/article280417429.html
  6. California housing crisis so far defies politicians’ efforts. (n.d.) Retrieved December 14, 2023, from calmatters.org
  7. Why California’s Housing Crisis is a Problem for …. (n.d.) Retrieved December 14, 2023, from www.svlg.org
  8. Californians confront rising cost of living — CalMatters. (n.d.) Retrieved December 14, 2023, from calmatters.org
  9. US California’s high living cost hits middle-class families hard …. (n.d.) Retrieved December 14, 2023, from global.chinadaily.com.cn
  10. Rising Prices and High Costs of Living Hit Californians with …. (n.d.) Retrieved December 14, 2023, from calbudgetcenter.org
  11. California cost of living too high for many working families …. (n.d.) Retrieved December 14, 2023, from www.cbsnews.com
  12. How Is California’s Labor Market Doing amid Inflation …. (n.d.) Retrieved December 14, 2023, from www.ppic.org

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Dr. ADAM TABRIZ
Dr. ADAM TABRIZ

Written by Dr. ADAM TABRIZ

In this vast tapestry of existence, I weave my thoughts and observations about all facets of life, offering a perspective that is uniquely my own.

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