Groundwork on CPI: Corporations are Raising Prices, Turning Record Profits

Today’s Consumer Price Index (CPI) release shows year-over-year inflation increased to 7.5%. Groundwork’s Chief Economist Rakeen Mabud responded with the following statement:

“Earnings calls are littered with CEOs bragging about how they’re able to use inflation as a cover for their price hikes. These higher prices are putting more pressure on struggling families and small businesses – all while CEOs and shareholders net record profits.

“The best way to bring down prices is to get our supply chains back up and running by making smart investments now — and prevent dominant corporations from siphoning them off or using them to accumulate even more market power.”

Email press@groundworkcollaborative.org to speak to Dr. Mabud about one of the driving factors of rising prices: corporate price gouging. You can read her testimony, as delivered at last week’s Congressional hearing on pandemic profiteering, here.

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Below are poignant examples of how people are being harmed by pandemic profiteering and price gouging:

• Reuters: Tyson Foods shares set record as high meat prices fatten profits. Tyson Foods Inc. shares climbed more than 11% to an all-time high on Monday after the company reported that first-quarter profits nearly doubled due to soaring U.S. meat prices. {2/7/22]
• New York Times: Starbucks will raise prices again, citing higher costs for supplies and workers. Starbucks will increase prices this year, the coffee giant said on Tuesday, blaming supply chain disruptions and a sharp rise in labor costs. For the last three months of last year, the company’s profit soared 31 percent, to $816 million, Starbucks said in reporting its quarterly earnings on Tuesday. Revenue grew to $8.1 billion, a 19 percent jump compared with the same quarter a year ago. [2/1/22]
• The American Prospect: How We Broke the Supply Chain. Almost none of these stories will explain how these shortages and price hikes were also brought to life through bad public policy coupled with decades of corporate greed. We spent a half-century allowing business executives and financiers to take control of our supply chains, enabled by leaders in both parties. [1/31/22]
• Bloomberg: Inflation Risks Getting Sticky as Big Firms Flex Pricing Power. Yet, there are risks that price gains will stick, some economists say. One reason is that corporate consolidation has accelerated during the past two decades, leaving more and more industries across the economy controlled by dominant companies. [1/18/22]

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Groundwork CollaborativeThe 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.