With the threat of inflation hanging over the US economy, many Americans are looking to the government for relief measures, which makes sense. The cost of necessities like food, rent, gas, etc., continue to rise at alarming rates. With increased consumer demand appearing to be the main driving force behind the current inflation, businesses and citizens are calling on the government to find ways to turn things around. But according to some experts, there are limits to what the government can do to arrest the situation. And while states alone cannot halt inflation, there are some things they can do to help American cope.
Return to Work Incentives
States can help Americans cope with inflation by putting measures in place to help people get back to work. America is currently battling massive labor shortage issues. For the first time in a long time, there are millions more job openings available than there are workers to fill them. This labor shortage issue is one main factor driving the current inflation. And finding ways to encourage workers to go back to work is something all states should work on. And there are several ways states can do this. One, states can consider diversifying their workforce, taking inspiration from how this move improves the Texas economy.
Additionally, state administrations can create worker incentives to bolster their workforces and encourage people to take up job positions. In that regard, unemployment benefits may be doing more damage than good as they could keep many Americans on welfare. Policymakers can also find ways to eliminate harmful labor-related policies discouraging many Americans from seeking employment opportunities.
Reduce Costs for Startup Businesses
But aside from employee-directed or labor-related policies, state policymakers should also focus on reducing regulations to help lower the cost of business in their states. Not everyone wants to be an employee. Current trends show that Americans are becoming more entrepreneurial-minded, especially after the effects of COVID. And the last thing a state wants to do is create onerous regulations and policies that drive up the cost of starting and running a small business.
That’s because small businesses play a crucial role in growing and sustaining an economy by creating more jobs. Aside from lowering the cost of doing business, it’s also essential to implement policies that help small businesses to compete and thrive with larger, more successful companies.
Other State Assistance
No one is expecting state governors to stop inflation, but policy interventions can go a long way to helping the citizens cope. A good example is Gover Kelly of Kansas’ plan to eliminate the state’s grocery tax to help people cope with inflation. States and local governments can also consider policies to help alleviate the current housing problems. Like many other things, housing has also seen significant inflation in price. Homes and properties are becoming too expensive today, especially for middle- and lower-income earners. And many people are resorting to living in their vehicles in the face of homelessness. States can adopt policies that make home acquisitions and purchases easier and less expensive.