Rising Insurance Rates Costing Jobs
- Author: Kelly Cooke
- Posted: 2024-06-28
The worst part about inflation in any economy is that it creates multiple snowballs in all directions that run over every industry. Fuel costs go up, and so delivery companies have to pay more, and those costs are passed on and on. Grocery stores have to charge more because the farmers need to spend more. A lack of home investment causes shortages, which cause price hikes, which price people out of the market. These aspects of economic downturn and inflation are not new news to Americans, but you would be hard pressed to find any politician willing to admit their hand in America's decline. Instead, they blame each other and pass the buck. While they're doing that, more and more of America's industries are affected. Over the past year, many have been losing their jobs due to the fact businesses have to pay a whole lot more on insurance alone. The taxi-like ride service Lyft announced today, Nov 3, that they would be firing 13% of its workforce.
Lyft isn't the only transportation-based company to have to let go of much of its workforce. Over the past year, most classic taxi services have completely gone under. A large proportion of food delivery services and trucks have also gone under. Fuel prices did not have much to do with it, at least not individually. While the prices are at a record high, most of these businesses were able to shoulder that burden and just raise their prices. It's actually the fact that even auto insurance rates have gone up so much that eventually cost so many businesses to flat out fail. National rates on personal insurance are up around 5%, while commercial insurance is nearly double that number. For companies that had fleet vehicles, those increases could be another thousand or more every single month. Insurance spikes were the proverbial straw that broke the camel's back.
Lyft is doing better than some. Their employees that were let go will receive 10 weeks of pay and also get to keep their health insurance coverage until April, so another six months or so. According to John Zimmer, founder of Lyft, the cost of rideshare insurance was just too much to bear. This is insurance where more than the vehicle has to be covered. It's basically a type of insurance that forces extra large fees to cover the passengers as well. Combined with the fact that Lyft rides were already more expensive, which meant fewer passengers, and you have all the makings for a business failure. Zimmer and his co-founder Logan Green hope that this 13% "layoff" will stem the bleeding, but no one really knows what's going on with any of these companies since prices continue to climb to new heights every month.
Still No End in Sight
The real issue with America's economy isn't what's already here, as if that isn't bad and painful enough. The real issue is what's to come. Joe Biden is depleting the oil reserve to artificially lower gas prices, but what happens once the stocks are gone? The government is also planning to punish farmers for having cattle and other livestock, so you can imagine what grocery prices will be like in a year. Economic experts are predicting that the housing market may outright collapse in 2023. This means that the prices on everything will continue to rise out of control, like auto insurance rates as well as every other type of insurance. There is simply no end in sight for America's economic issues. And whether you call it a recession or not, it doesn't change what's actually happening in the nation. It's to the point now that no one believes any type of government can fix the issue. The country has been flooded with so much money, and regulations have forced so many businesses to close down, that most agree the country just has to ride whatever wave is coming.
Consumer confidence is at an all time low, while most inflation is at an all time high. So not only are people financially suffering; they also don't believe that things are going to get any better. The problems in America right now are too numerous to name, and you can be pretty sure that the rising costs of insurance are going to drive even more businesses into closures. There's just no way for these businesses to stay afloat in the face of so much economic turmoil and strife.
