America is experiencing a storm: rising energy prices, only partially linked to the Russian invasion of Ukraine and their effects in other sectors (food, medicine, chemicals, etc.) have led to high inflation. Prices are soaring, supply chains are being disrupted and consumers are very worried about the immediate future.
Therefore, specific measures must be implemented to mitigate, or counter for consumers, the consequences of the cost of living crisis. Consumer organizations request actions and initiatives from various bodies, whether they are market partners or politicians. The measures can be applied at different times and are aimed at different population groups, depending on their needs:
Rising energy prices
Bills and offers must be made more transparent and easily comparable. Switching providers should be made easier even for bundles. Help and advice to consumers should be provided, not by energy providers, but by national regulators, in cooperation with Consumer Associations. Consumers must be able to pay their bills in installments, not be disconnected from the network and not subject to unilateral price increases.
Energy efficiency of homes must be strengthened: Politicians and legislators must amend the legislation on rental properties. Any rent increase should be banned, in properties that are not well insulated and their tenants pay high energy bills.
Inaccessible healthy food
Healthy food must be accessible and affordable for all: Urgent action is needed to end the risk of food poverty and provide healthy and nutritious food, at affordable prices, to all. In the long term, America must stick to its plan to transition to a sustainable and robust food system. The Framework for Sustainable Food Systems is a golden opportunity to achieve the plans. Government and food vendors need to take measures (social and economic) such as visible unit price, access to healthy food options, affordable prices of sustainable food, better promotion of fruits and vegetables.
Over-indebtedness must be avoided: The impact of inflation, especially ‘poor inflation’ and electricity prices, on household incomes must be contained to address the risk of over-indebtedness. Banks can guide consumers through difficult financial situations and avoid over-indebtedness. Green loans can help consumers improve the energy efficiency of their homes. Banks should offer loan repayment plans, with better terms, adopt restraint and forbearance measures for struggling consumers, offer counseling services to deal with consumer debt, provide “green” loans that will be financially beneficial and are easily accessible.
Market out of control
Market regulators must be activated: While some price increases can be considered justified, others are the result of either profiteering or anti-competitive practices. The monitoring of price fluctuations in sensitive markets (such as food, energy, medicine) in order to detect unjustified price increases, due to either unilateral decisions (profiteering) or cartels (distortion of healthy competition), is necessary and should be expanded beyond statistics and general inflation. Unfair commercial practices that take advantage of the crisis must be exposed. The law enforcement authorities must control the market and punish the traders, who are illegal.
Close and active cooperation will be required between the consumer protection authorities and all other authorities that supervise the market. Consumer Associations play a key role in advising and supporting consumers to guide them on how to deal with the crisis. It is necessary for politicians to expand communication and cooperation with Consumer Associations, in order to better understand the reality of the market, as experienced by consumers. It is also important to support Consumer Associations with program funding, partnerships, joint activities, so that they can respond to the additional workload caused by the crisis.
Drug shortages and price spikes must be prevented: Consumers in America face price increases for both prescription and over-the-counter drugs. Although drug price hikes had begun before this crisis, they have become more severe in two ways: They face rising prices, along with increasing shortages of essential drugs. Generic producers claim that they are making losses because production costs are increasing, but compensations from insurance funds and insurance companies are not increasing. Government needs better sales techniques.
Thus, they threaten that they may stop producing certain medicines, which are essential for health. America must immediately revise its drug laws, setting strict rules on the drug supply chain and reporting future drug shortages. Incentives must be given for the development of innovative medicines. America also needs to forget its plans for transferable exclusivity extension vouchers, because they also distort competition and delay the market entry of generic drug companies that make drugs other than antibiotics.
Fear among workers
The increased cost of living scares workers. In the United States, 3 in 5 workers (61%) worry that their salary is not enough to keep up with the rising cost of living. Still, the influence of colleagues seems to play an important role in staying or not at work. In particular, employees say they consider quitting when they see colleagues leaving the company, with some of them following their colleagues out. Some workers are planning to leave their jobs in the next 12 months, and others are already actively looking for a new job. Paystubs are not enough. At the same time, they feel confident that they will be able to find a new job in six months or less, even in the midst of a recession.
Despite the fluid macroeconomic environment, a large proportion of workers feel that they retain their bargaining power in the labor market. The representatives of generation Z are at the forefront of work flexibility as almost half already work a four-day work regime, while others would accept a pay cut to work 4 times a week. In an environment of increasing economic uncertainty, companies will have to manage both the financial concerns of their employees and the issues related to their well-being, constantly staying on their side, so as not to face waves of resignations. In the US, businesses should adopt a people-centered approach that promotes wellness, preserves work-life balance, and ensures workers’ financial stability in the face of rising living costs.