Groundwork’s Lindsay Owens Reacts to NEC Director’s Speech: “Director Brainard is exactly right: Corporations are keeping prices high as their costs come down”
June 20, 2024
Groundwork’s Lindsay Owens Reacts to NEC Director’s Speech: “Director Brainard is exactly right: Corporations are keeping prices high as their costs come down”
Today, National Economic Council Director Lael Brainard delivered a speech at an event hosted by the Urban Institute and Consumer Federation of America, where she highlighted the need for corporate profit margins to come down off historic highs. Groundwork Collaborative Executive Director Lindsay Owens praised the speech:
“Director Brainard is exactly right: Corporations are keeping prices high as their costs come down. Corporate savings should translate to savings for consumers – not record-high profit margins.”
Email press@groundworkcollaborative.org to speak to a Groundwork expert about high prices.
BACKGROUND
- In a 2022 New York Times op-ed, Lindsay Owens drew attention to the role corporations were playing in rising prices. She later continued to make the case in The Boston Globe, writing in an op-ed: “Big corporations are choosing to keep prices high for consumers, even as their own expenses, for things like materials and transportation, go down.” She also raised these issues on MSNBC’s The Beat with Ari Melber, The ReidOut, Bloomberg’s Balance of Power, and more.
- From April to September 2023, corporate profits drove 53% of inflation. Comparatively, over the 40 years prior to the pandemic, profits drove just 11% of price growth.
- In February, Groundwork released a report that found families are now paying 25 percent more for groceries than they were before the pandemic, outpacing overall inflation. The report offered policy recommendations to address the high cost of groceries and reduce the risk of future price spikes, like antitrust action such as the block of the Kroger-Albertsons merger.
- Similarly, a recent report by the Federal Trade Commission found that “some firms seem to have used rising costs as an opportunity to further hike prices to increase their profits, and profits remain elevated even as supply chain pressures have eased.”
- And a recent study from the Council of Economic Advisers found that grocery profit margins since the pandemic have reached their highest level in two decades.
- Groundwork also found that shrinkflation accounts for about 10% of price increases in household essentials like paper towels, toilet paper, and snacks during the inflation crisis.
