New Research from Groundwork Collaborative Shows Link Between Price Hikes, Monopoly, and Corporate Greed
Today, the U.S. Labor Department reported that the Consumer Price Index increased 0.4% in September, as people paid more for goods such as meats, poultry, and eggs. As you cover this issue, it’s important to understand the real culprit behind rising prices at the checkout line: corporate power.
“The more sway mega corporations have over our economy, the more power they have to gouge customers, squeeze Main Street, and exploit workers,” said Rakeen Mabud, chief economist at Groundwork Collaborative. “Addressing this crisis means recognizing these price increases for what they are: the result of deeply entrenched concentrated corporate power that has systematically stripped down supply chains and created room for pandemic profiteers as well as long-standing underinvestment in our economy.”
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New research from Groundwork Collaborative shows how concentrated corporate power is squeezing small businesses and stymieing our collective economic health:
- Food prices overall have increased 4.6% since September 2020, with meats, poultry, fish, and eggs accounting for the highest increase at 10.5%.
- Just four meat processing conglomerates control more than 80% of the beef industry and more than 60% of the pork industry. This enables them to dictate prices that both flatten returns for farmers and ranchers and inflate prices for consumers at the meat counter. As a result, consumers have seen a 12% increase in the cost of beef and a nearly 10% increase in the cost of pork over the last year. Meanwhile, the four major meat processors doled out billions of dollars to their shareholders in dividends and bought back millions of dollars of their own stocks.
- State governments, including Minnesota, Texas, California, and New York have sued egg producers and distributors for illegally raising the price of eggs during the pandemic, which has risen 9.9% since August 2020. As one lawsuit put it, jacking up egg prices is allowing these companies, including some of the largest producers and wholesale distributors of eggs, to “profit from the misery of millions.”
- Kroger, a grocery mega-chain, spent the summer of 2021 gloating that “a little bit of inflation is always good in our business” before citing inflation to justify price hikes. Kroger publicly acknowledged that they could get away with increasing prices on consumers as long as prices didn’t rise by more than 3 or 4%.
- Charging consumers more for supermarket staples has lined the pockets of Kroger executives and shareholders, even as median worker pay decreased by 8% in 2020. That same year, the Kroger CEO earned 909 times what the median worker earned.
- While the company was publicly calling their workers heroes, they were simultaneously cutting essential hazard pay for employees during a global pandemic. Meanwhile, the company spent $1.498 billion on stock buybacks between April 2020 and July 2021 to enrich its shareholders.
About Groundwork Collaborative
The Groundwork Collaborative’s mission is to advance an economic vision for strong, broadly shared prosperity and true opportunity for all. Learn more at groundworkcollaborative.org and follow us on Twitter @Groundwork.