Inflation’s harsh realities exposed as Fed officials meet

Ash Hermanowski, food access and operations manager for the Jackson Cupboard, poses for a portrait Wednesday in Jackson Hole, Wyo. As the Federal Reserve’s annual economic symposium in Jackson Hole kicks off Thursday, some of the highly problematic federal officials grapple with are all too visible. (Amber Baesler, Associated Press)

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JACKSON HOLE, Wyoming — About a half-hour drive from the resort where the high priests of international finance — top economists and central bank officials — gathered in Jackson Hole, Wyoming, to discuss economic challenges worldwide, Ash Hermanowski oversees the distribution of approximately 1,200 free meals per day.

At a food bank called Jackson Cupboard, Hermanowski distributes meals from a commercial garage after being forced out of a previous site by a malfunctioning sprinkler. The food bank couldn’t afford another location in town.

Directly opposite, The Glenwood, a collection of townhouses that will sell for millions, is nearing completion. “Unparalleled luxury,” his website saysin a “truly relaxing oasis”.

It’s “the ultimate irony,” Hermanowski said. “The staff and I talk about it all the time. We’re all struggling to live here, and they’re building high-end residences. This dichotomy exists all over the city, but people refuse to see it.”

As the Federal Reserve’s annual economic symposium kicks off Thursday at a lodge in Grand Teton National Park, some of the issues facing Fed officials – high inflationhovering rental fees and house prices and wide economic inequalities – are quite evident near the idyllic mountain setting.

On Friday, Fed Chairman Jerome Powell will deliver a speech that could signal how much or how quickly the central bank could raise interest rates in the months ahead. Powell’s remarks will be scrutinized by traders and economists on Wall Street and could potentially cause wild swings in financial markets.

In its bid to bring the nation’s worst inflation in four decades under control, the Fed Powell embarked on its fastest series of rate hikes since the early 1980s. The Fed has been trying to slow the economy just enough to cool inflation without causing a recession – a notoriously tricky task.

Inflation is particularly high in the city of Jackson and surrounding Teton County, which even before the pandemic hit two years ago was the the richest and most unequal place in the nation. (Jackson Hole is the name of the larger valley.) State of Wyoming calculated that the cost of living in the county at the end of 2021 was 68% higher than in the rest of the state – with housing costs 130% higher.

At the food bank, Hermanowski says, demand has increased over the past year as soaring food and gas prices have sapped their clients’ budgets. About 85% of food bank recipients have jobs, often more than one, said Sharel Lund, executive director of one22, a nonprofit that includes Jackson Cupboard.

Ash Hermanowski, food access and operations manager for the Jackson Cupboard, poses for a portrait Wednesday in Jackson Hole, Wyo.  .
Ash Hermanowski, food access and operations manager for the Jackson Cupboard, poses for a portrait Wednesday in Jackson Hole, Wyo. . (Photo: Amber Baesler, Associated Press)

Like many resorts, Jackson has always been expensive. But the pandemic has accentuated the disparities that have widened the gap between the rich and the rest. Real estate prices soared as many wealthy families, seeking to escape crowded cities, moved to the Jackson area or spent more time in vacation homes they already owned.

With many office professionals able to work remotely, the area’s natural beauty has become an alluring draw. Wyoming’s low-tax status has also proven attractive to high-income earners.

Jackson, a city of about 25,000 year-round residents, still retains its old western aura, with its elk antler archways around the town square. The square is lined with a “Cowboy Bar” and a former “Five and Dime” store.

Yet wedged among these outlets are symbols of the increasingly luxurious Jackson: high-end jewelry stores and a Swarovski crystal store that sells a bald eagle figurine for $9,600.

“We’re definitely seeing both sides here,” said Hannah Cooley, executive director of Hole Food Rescue, a nonprofit that redistributes leftover food from restaurants and bakeries. “You have the ultra-rich with their massive homes. And then you have three immigrant families crammed into a one-bedroom apartment.”

Already high Jackson real estate prices and rents have surged further since the pandemic, just as they have done nationally, a particular difficulty for people who work as housekeepers, chefs and servers at resorts. Median home price: $3 million, double what it was five years ago. The average apartment rent in Teton County jumped 12.4% last year, to $2,780, according to state government data.

Jackson City Councilman Jonathan Schechter says that according to the most recent IRS data, the average income in Teton County in 2019 was $312,442, the highest in the nation and nearly 50% in above the second highest, Manhattan.

April Norton, director of the Jackson/Teton County Department of Affordable Housing, points to a major barrier to building homes: 97% of land in the county is federally owned and cannot be developed. To make matters worse, retired workers who bought homes at affordable prices decades ago are now selling them at exorbitant prices that many current workers, even high-income professionals, cannot afford.

Norton’s in-laws recently retired from engineers and accountants in Jackson. Having built their own house in the 1970s, they will eventually be able to sell it for far more than today’s engineers or accountants could afford. A neighbor just sold a house for $8 million.

We definitely see both sides of it here. … You have the ultra-rich with their massive houses. And then you have three immigrant families crammed into a one-bedroom apartment.

–Hannah Cooley, Executive Director of Hole Food Rescue

The county is trying several approaches to address the affordable housing shortage. They include building homes available only to people who work locally and with caps on price appreciation. These “restricted deed” homes still sold for over $700,000, evidence of the intense demand and limited supply.

Always a county report shows there is a waiting list of about 1,500 families looking for affordable housing, up from 1,100 last year.

The housing crisis has exacerbated worker shortages plaguing the county, a problem be felt by employers across the country. Norton said the school system lost 60 teachers last year, in part due to a lack of housing. Many workers, including nurses and service workers, are stuck commuting from places like Victor, Idaho, about a 45-minute drive over the 8,500-foot Teton Pass, which is dangerous for much of the winter.

“Staff retention is the No. 1 challenge for businesses here,” said Anna Olson, president of the Jackson Hole Chamber of Commerce. Some companies, she said, buy housing and provide it to workers at below-market rents. There’s also a tax initiative on the November ballot that, if approved, will provide about $100 million to further support housing development.

As more wealthy people moved to Jackson, they often sought out landscapers, nannies and other service workers, Norton said, adding to the demand for jobs and intensifying the shortage of affordable housing.

On Wednesday, the local newspaper, the Jackson Hole News & Guide, ran eight pages of aid ads, but only half a page of housing ads. Many were for temporary winter rentals, as residents often leave the area to escape the cold.

A two-bedroom condo was asking $5,250 per month.


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