Post by benson on Feb 28, 2022 22:11:48 GMT
Corporate pricing is boosting inflation — but we’re still buying
On recent earnings calls, massive corporations have posted huge profits and promised continued price increases, even as inflation continues to rise to rates not seen in decades.
For example, Starbucks celebrated a 31 percent increase in profits at the end of 2021 — but it still plans to hike prices this year, the New York Times reported earlier this month. Tyson Foods, the meat processing behemoth, raised its prices 19.6 percent overall, driving record stock prices for the company.
Inflation, meanwhile, hit a four-decade high in January, with the consumer price index increasing 7.5 percent over the past year, before seasonal adjustment. Although prices dropped in the energy sector for goods like gasoline and fuel oil, every other sector — including medical care, apparel, transportation, food, and shelter — saw increases, resulting in the largest overall 12-month increase since 1982.
Some of that’s to be expected: With Covid-19 still throwing kinks into the global supply chain, the challenge of getting goods and materials where they need to be translates into increased prices for both companies and consumers. Meanwhile, consumers have increased purchasing power due to wage increases and stimulus benefits like checks, child tax credits, and low interest rates — and at least in the US, they’ve proven willing to pay higher prices. At its core, those are the necessary ingredients for inflation — demand outstripping supply.
But some economists and politicians say that corporations are using inflation as an excuse to jack up prices beyond what’s necessary to account for their increased costs. More than just passing those costs onto consumers, they say, corporations are taking advantage of the unprecedented global economic circumstances to increase their profits, simply because they can.
Politicians like Sens. Elizabeth Warren (D-MA) and Sherrod Brown (D-OH) have recently drawn attention to what they say are outsized price increases made worse by anticompetitive corporate behavior.
Warren has highlighted the meat industry as an egregious culprit, calling for a Justice Department investigation into the industry’s practices. “Tyson is abusing their corporate market power and raking in record profits by jacking up meat prices,” she tweeted earlier this month. “I’ve long argued that we need to enforce our antitrust laws to break up monopolies and promote competition, and now it’s more vital than ever as a tool to fight inflation.”
www.vox.com/2022/2/20/22943257/inflation-corporations-price-hikes-consumer-price-index
On recent earnings calls, massive corporations have posted huge profits and promised continued price increases, even as inflation continues to rise to rates not seen in decades.
For example, Starbucks celebrated a 31 percent increase in profits at the end of 2021 — but it still plans to hike prices this year, the New York Times reported earlier this month. Tyson Foods, the meat processing behemoth, raised its prices 19.6 percent overall, driving record stock prices for the company.
Inflation, meanwhile, hit a four-decade high in January, with the consumer price index increasing 7.5 percent over the past year, before seasonal adjustment. Although prices dropped in the energy sector for goods like gasoline and fuel oil, every other sector — including medical care, apparel, transportation, food, and shelter — saw increases, resulting in the largest overall 12-month increase since 1982.
Some of that’s to be expected: With Covid-19 still throwing kinks into the global supply chain, the challenge of getting goods and materials where they need to be translates into increased prices for both companies and consumers. Meanwhile, consumers have increased purchasing power due to wage increases and stimulus benefits like checks, child tax credits, and low interest rates — and at least in the US, they’ve proven willing to pay higher prices. At its core, those are the necessary ingredients for inflation — demand outstripping supply.
But some economists and politicians say that corporations are using inflation as an excuse to jack up prices beyond what’s necessary to account for their increased costs. More than just passing those costs onto consumers, they say, corporations are taking advantage of the unprecedented global economic circumstances to increase their profits, simply because they can.
Politicians like Sens. Elizabeth Warren (D-MA) and Sherrod Brown (D-OH) have recently drawn attention to what they say are outsized price increases made worse by anticompetitive corporate behavior.
Warren has highlighted the meat industry as an egregious culprit, calling for a Justice Department investigation into the industry’s practices. “Tyson is abusing their corporate market power and raking in record profits by jacking up meat prices,” she tweeted earlier this month. “I’ve long argued that we need to enforce our antitrust laws to break up monopolies and promote competition, and now it’s more vital than ever as a tool to fight inflation.”
www.vox.com/2022/2/20/22943257/inflation-corporations-price-hikes-consumer-price-index