A new report from a progressive think tank argues that Americans’ recent inflation woes were caused by companies that kept prices high to boost profit margins, even though costs have fallen in recent months. are doing.
Groundwork Collaborative Reportfirst reported guardian papersays corporate profits are 53% below inflation in the second and third quarters of 2023.
At the height of the COVID-19 pandemic, the report’s authors found that “nearly every company in every industry faced rising costs to manufacture and stock their products.” did. The war in Ukraine has also worsened energy costs and hit supply chains.
But as those production strains ease, businesses across the economy are resisting lower prices for consumers, the report said.
“As we listen to earnings calls and look at macroeconomic data, we see again and again that companies are passing on high prices and asking for more,” said Lindsey Owens, executive director of the Groundwork Collaborative. I did,” he said. He told MSNBC’s Ari Melber.. He said companies are taking advantage of customers “who are willing to pay a little more” in the current economic climate.
“I think this is profiteering,” Owens said.
The authors said that many executives even “bragged” about their windfalls during quarterly earnings calls.
The report cites a particularly worrying example regarding the cost of diapers. The newspaper said the industry is “highly concentrated,” noting that Procter & Gamble and Kimberly-Clark control about 70% of the U.S. market.
According to the paper’s authors, diaper prices have increased 30% since 2019, from an average of $16.50 to almost $22. This is mainly due to the wholesale cost of wood pulp. However, while wood pulp prices have fallen from the highs of 2021 and 2022, diaper prices have not.
Inflation, which is putting pressure on household budgets across the country, is a major issue for candidates in the 2024 presidential election. President Joe Biden has repeatedly blamed corporations; The CEO is accused of “price gouging.”
The Groundwork Collective’s report supports progressives’ contention that corporate greed is what is actually hurting Americans, a phenomenon known as “greedflation.”
However, this idea is hotly debated. Last fall, Federal Reserve economists A report has been published He argued that corporate profits were not abnormally high, considering factors such as government support for small and medium-sized businesses.