Groundwork Chief Economist Testifies at House Financial Services Committee Hearing on Inflation

March 8, 2022 Groundwork Collaborative

Today, Groundwork Collaborative’s Chief Economist and Managing Director of Policy and Research Dr. Rakeen Mabud appeared at a hearing of the House Committee on Financial Services. The hearing, entitled “The Inflation Equation: Corporate Profiteering, Supply Chain Bottlenecks, and COVID-19,” focused on the critical issues of rising prices and inflation. 

“There are a range of factors driving inflation right now, including increasing and shifting demand, as well as supply chain disruptions and resulting shortages,” Dr. Mabud told the Committee. “However, the 70-year record high corporate profit margins demonstrate that megacorporations are taking advantage of this crisis to pad their profits, accelerating price hikes for consumers.”

Watch Dr. Mabud’s testimony here – and read her full remarks submitted for the record here


“Over and over, the message from corporate America is clear: CEOs are telling their investors that the current inflationary environment has created significant opportunities to extract more from consumers by raising prices and pocketing extra profits.”

“Mega-corporations are able to get away with this kind of aggressive and extractive pricing precisely because of the current inflationary environment.”

“…Wall Street’s influence in every corner of our economy makes this period of inflation unique and puts us at risk for a profit-price spiral. As profits rise as a result of price hikes, so too does the investor demand for those profits – sending prices spiraling upward.”

“Now this is important: While investor demands for higher profits are sending prices spiraling up, there is no evidence that wages are playing a role.”

“Importantly, interest rate hikes, which slow inflation by tamping down demand and making people poorer, will do nothing to make our markets more competitive, nothing to help spur overdue investments in housing and infrastructure, and nothing to address profiteering.”


  • Krispy Kreme carried out double-digit price increases in the U.S. and single-digit increases abroad. Their CFO claimed they had already covered increased costs and were now doing “further price increases to still grow our margins”.
  • Macy’s CFO said the company’s margins increased thanks to a 10% increase in the full price Average Unit Retail for Macy’s brand, outpacing the annual rate of inflation in the United States. They doubled down on their commitment to drive stronger profit margins in 2022.
  • The CFO of Hormel, maker of popular grocery brands, bragged to investors about its pricing strategy: “I think we’ve done a great job with our pricing. I think it’s been very effective.” As a result, the company improved operating income by 19% in the first quarter of 2022 compared to 2021. 
  • Retail giant Kohl’s knows what many other retailers know too: When others raise prices, so can we. Their CEO stated “… there are certain national brands that are taking pricing. … We’ll, of course, be taking that along with them…” Kohl’s achieved an “all time record” in profits in 2021, reaching $7.33 in earnings per share.
  • The CEO of the snack cake company Hostess appreciates how helpful price increases have been for the company’s bottom line: “Pricing, by definition, is a change model. It’s temporary. Consumers get used to it. When all prices go up, it helps.” Hostess beat analyst expectations by 8.7 percent and revenue was up $41.1 million in the fourth quarter of 2021 compared to 2020.
  • The CFO of Utz admitted their price hikes “have stickiness to them,” and that investors should be excited about the long term: “while they address margin gaps in the near term, they will drive margin enhancement when inflation stabilizes.”


Groundwork Collaborative

The Groundwork Collaborative’s mission is to advance an economic vision for strong, broadly shared prosperity and true opportunity for all. Visit our website and follow us on Twitter @Groundwork.