15 minute read
U.S. government response to coronavirus may be catalyst for Valley’s rising inflation rate
Esteban Mejia, SKY IT
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INFLATION IN THE VALLEY
U.S. Government Response to Coronavirus May Be Catalyst for Valley’s Rising Inflation Rate
by Bryan Kirk
The Rio Grande Valley was among the hardest hit regions in Texas by the coronavirus pandemic in 2020. A year after this deadly outbreak, vaccines are now readily available and are provided to the public to help mitigate the spread of COVID-19. Many believe this was a gateway to helping Americans who were furloughed or laid off in 2020 to return to the workforce.
But what if those American workers who lost their jobs because of COVID-19 decided to stay home? What if many of those formerly displaced workers opted instead to continue collecting unemployment insurance benefits, federal benefits, and the occasional stimulus payment instead of returning to work?
It’s possible that the inflation rate would increase to the point that could result in a recession, and the abundance of available jobs that were unfilled from late 2020 until now would disappear completely.
The economy, of course, isn’t in this dire state yet, but that is a very real possibility. This could happen with so many able-bodied Americans deciding that they can make more money collecting government benefits.
“This is a good example of a very painful injury to the economy that we did to ourselves,” said Bill Martin, vice president of Investments with Raymond James Investments in McAllen. “We didn’t cause COVID-19, but our reaction to it is what is reverberating throughout our economy right now.”
Martin said shutting down the economy for months while paying people to stay home instead of reopening the economy has created a labor shortage where jobs before the pandemic were plentiful.
“There was a lot of pent-up demand because people really weren’t doing much for most of the year, and when they were released to go be active to shop and build ... the demand outstripped supply very quickly,” Martin said.
However, some businesses that were deemed essential were impacted when some of their workforce contracted COVID-19, resulting in shutdowns. Meat and poultry processing plants, such as Tyson and Sanderson Farms, were among those processors impacted, which also impacted farmers.
“If you’re the farmer who has the chickens that need to go to the processor, you don’t have a market,” John Martin, a retired financial advisor, said. “You reach a point where you can’t sell them, so you basically have to bury them. When the market comes back, there are no chickens.”
Since March 2020, Congress has passed several aid packages that have paid out trillions in stimulus payments, unemployment insurance payments, and federal benefits in the form of pandemic relief. The first of those was the CARES (Coronavirus Aid, Relief, and Economic Security) Act, signed by President Donald Trump, followed by the American rescue Plan Act (ARPA) of 2021, signed by President Joe Biden.
Despite these efforts, concerns of a post-coronavirus recession have been widely discussed in a number of media outlets since the start of the pandemic.
However, the U.S. Department of Labor Bureau of Labor Statistics reports that Texas’ unemployment rate dropped slightly from 6.2% in July to 5.9% in August. States with the highest unemployment rate during that same period included California at 7.5%, New York at 7.4%, and Nevada, which had the highest in August at 7.7%.
The numbers suggest that there are more available jobs than there are unemployed people, but Bill Martin suggests that there are many more who are jobless and have fallen out of the system.
Bill Martin adds that some of his clients who advertise for skilled labor in the Valley are having difficulty even attracting unskilled labor.
“It takes a while for producers to produce things and to ramp up production normally, but when you throw in a labor shortage, then you (can) have hyperinflation,” Bill Martin said.
Thankfully, the local economy is not seeing hyperinflation yet. In fact, the last time the Valley experienced out-ofcontrol inflation was in the late ’70s and early ’80s, when Martin’s parents, John and Audrey Martin, were both financial advisors in McAllen and lived through the impact of hyperinflation on businesses in the Valley.
In those days, their clients in Mexico would ask them to invest in Certificates of Deposit (CDs) at the bank because the peso was so devalued, and they could be paid in dollars instead.
John Martin said that it’s typical for the initial impact of rapid inflation increases to impact markets in New York before they begin to trickle down to the rest of America’s households, and into Mexico, before impacting the Valley. Meanwhile, Audrey Martin added that while things are tough now, it’s not as bad as things were in the late ’70s and early ’80s.
“We don’t have hyperinflation yet,” she said. “We may get there, but we are not there now.”
CLARITY IN A CRISIS
North Park Lexus RGV Team Delivers a Personalized Care Approach
by Lorenzo Zazueta-Castro | photos provided
Jose Luis Contreras believes that during these uncertain times, luxury car consumers want a sense of clarity in a time of chaos. "Guests are thirsty for solid direction. They're looking for somebody who really knows what's going on with the market and has their best interests in mind," the North Park Lexus Rio Grande Valley General Manager said.
When the pandemic first began to disrupt supply chains in March 2020, the auto industry changed its game plan to accommodate a contact-less experience for its clients, online sales, and athome deliveries. This became the norm throughout the industry.
Navigating through the pandemic, Contreras and his award-winning team at North Park Lexus RGV in San Juan believed it was essential to maintain a sense of normalcy during a very unstable time.
And now, the chip shortage -- all a result of the pandemic. Some manufacturers are stocked with rows of built vehicles waiting for microchips. In fact, satellite images of this inventory have made
the rounds on social media to underscore the extreme nature of the disruption to the industry.
The chips are essential in vehicles and a myriad of other items and impact everything from engine temperature monitoring, dashboard lighting, airbags, anti-lock brakes, and GPS navigation, to name a few.
Currently, industry experts hypothesize that vehicle production levels will continue to remain low through at least 2022 and as far as into 2023. "This shortage and subsequent rise in demand has many dealers pricing common vehicles well above MSRP, price gouging — oftentimes, a lamentable and unnecessary practice," Contreras said. "I understand a hot market, but this is all still part of a pandemic... a crisis.”
One point of pride for Contreras at North Park Lexus RGV is the Posted Price Promise. "Customers can take advantage of what we offer without worrying about price gouging,” he said.
Contreras added that 85% of his new car inventory at North Park Lexus RGV is still priced at a discount.
Despite the challenges for consumers, including higher-than-expected prices this year, Contreras said his team is dedicated to looking at every possible avenue to find what best suits the guest.
The steep rise in value for used vehicles may present an advantage for consumers, he added.
"As a result of the crisis, trade values are at unprecedented highs," Contreras said. "This poses an opportunity for many clients."
He said above all else, his team at North Park Lexus, one of three Lexus dealerships in South Texas, prides themselves on their loyalty — working hard for the Rio Grande Valley market, community, and their guests. "We're people trying to take care of people. We're listening because everyone's needs are different. Circumstances are different. Some people might just have that itch and might be excited about doing something new — but it might not really make sense for them to do anything, right now," Contreras said. "We'll make sure to explore (the) best options before we just try to sell a car. "It takes a team who truly cares for people and somebody who really understands what is currently evolving in this marketplace."
Contreras said he and his staff are prepared for each guest’s individual circumstance, whether they were thrust into the market for a vehicle, or if they just feel like they might have a good trade-in opportunity. His team will guide them.
Conteras said North Park Lexus RGV always puts people first — always striving to take care of their guest's best interests. "Relationships are paramount,” he said.
A SIGN OF THE TIMES
The Sign Depot Stands the Test of Time in the RGV
by Nathaniel Mata | photo by James Hord
Signs and storefront imagery are massively important. Catching customers' eyes and making the first impression is key to potential business or being overlooked altogether.
Whether it's the bustling downtown entertainment district on McAllen's 17th Street or the shops that dot the business-heavy district of 10th Street -- even down to Brownsville's commerce areas along the expressway and, of course, South Padre Island -- businesses vie for everyone's attention and signs do that job.
That's where The Sign Depot hopes to come in and turn things around. "A business with no sign is a sign of no business," Ruben Cepeda said.
The Sign Depot is a long-standing sign business that's been in operation for decades, and it's no wonder why when you speak to the charismatic leader there. He has an "it" factor that goes just beyond sales and business. He comes with a personality that can't be imitated.
Talking to Cepeda for just a few minutes is sure to produce a few gut-moving laughs. He's a funny, lighthearted man who is passionate about his business and the people that he serves to keep The Sign Depot a local leader. "We don't believe in a sale, we believe in a relationship,” he said. “We can all sell each other something, but build a strong relationship with someone that will last for years. That goes so much further than just a sale."
The Sign Depot has been in operation for 30 years. "We were one of the few sign companies in the Valley. Now everyone and their mother has a sign company," Cepeda said. "But that's OK. Bring it on. We might not know about them, but I'm sure they know about us."
Design is at the forefront of the company's operation. They install signs and manage projects, but many times, it begins with an idea that turns into a unique design that an expert graphic design team tackles.
Cepeda told of the vehicle wrap for Atlas Electrical, Air Conditioning, Refrigeration, and Plumbing Services Inc. that won a national award for design and how that changes the way people look at the business and work vehicles.
He uses the phrase "think louder" to summarize the design process while going into an interesting theory about how our mind sees images and not words even when thinking about words.
Over the years Cepeda has seen things change and technology change the way business runs -- and also what companies ask for. "The business has changed a lot," he said. "We've seen the industry change dramatically. Before, it was just details and letters -- usually one color. And then came what we call large-scale printing."
The Sign Depot also follows the trends like LEDs and whatever a customer might ask for. Cepeda isn't afraid to pass a job to another company or ask around for assistance to meet project goals.
The shop even has a sister store that specializes in flags called Sooper Flags as the popularity of flags lining the street has grown. His approach to that site in Pharr is to make the interior so ridiculous and comically fun that customers can't stay in a bad mood -- and are tempted to make a purchase.
Cepeda is such a staple in local business he sits on the Better Business Bureau. He remarked that the region is bustling with new opportunities -- something he says you can notice just looking along the expressway. "The Valley is booming as long as we help each other," Cepeda said. "Don't get greedy -- there's no room for that. That's our philosophy. There's enough for everybody. No one should go hungry."
NO MAN IS AN ISLAND
COSTEP’s on a Mission to Expand Rio South Texas’ Reach
by Faith Chua | photos provided
The Rio Grande Valley is known for its strong sense of camaraderie and closeness. Each business, city, and individual helps contribute to strengthening one of the region’s most significant assets: its people. However, the famous saying, “no man is an island,” also applies to the region.
As strong as the sense of community is, it does not do the people or region any good if it is isolated from most of the world. Many may say the Valley is not as well known as it could be.
COSTEP’s Board of Directors and Management saw the potential the area offers and has set out to raise awareness and further widen the region's reach.
On Sept. 1, both COSTEP’S Vice President of Economic Development Matt Ruszczak and Senior Vice President of Business Development Adam Gonzalez flew to Munich, Germany, to attend the IAA Mobility 2021 tradeshow. Recently, they attended the North American Electric & Hybrid Vehicle Expo in Novi, Michigan, with further plans of traveling to Pontiac, Michigan, to attend the North American International Automobile Show’s Motor Bella event.
The main goal COSTEP wants to achieve is increasing awareness of the region and hopefully attracting more domestic and international mobility industry manufacturers to invest in the area. The trade shows also serve as a factfinding undertaking for Ruszczak and Gonzalez that will help them to not only garner knowledge about current and upcoming industry technology, but also learn which companies are looking to localize or expand their operations.
“One of the challenges that our region has is not the value it has to offer but the fact that it may not be well-known,” Ruszczak said. “So one of the things we are excited for is to tell the story to our new contacts and really engage actively in promoting our region to a new audience.”
Another excitement for the team? Having front-row seats to a changing industry.
“We’re getting all these different angles and learning which direction the mobility industry is going to head to next,” Ruszczak said. “So it’s not just exciting to learn about how things are going to be changing, but the fact we’re going to get to be on the cutting edge of that knowledge. And with any industry that changes, this always creates opportunity.”
Gonzalez says that COSTEP’s efforts have been going well.
“We have been talking to a lot of people,” he said. “It’s not just cars, trucks, and trains. … It’s very interesting to see the direction where it is all headed. It is becoming clear that in order to supply the necessary workforce, the region’s colleges and universities cannot just focus on the current demands, but also need to focus on future skills requirements in the advanced technology area and the STEM field. I think there will be a lot of opportunities for our region.”
More information can be found on COSTEP’s social media (Twitter, Facebook, and LinkedIn) and on their website, www. costep.org.
