A new report compiled by think tank Groundwork Collaborative shows the inflation we continue to see across the country is mostly driven by corporate profits. According to their findings, “corporate profits drove 53 percent of inflation during the second and third quarters of 2023 and more than one-third since the start of the pandemic.” To put that into perspective, only 11% of price growth in the previous 40 years (before the pandemic) was due to corporate profits.
While corporate profits were up across the board, some companies have really taken advantage of raising their prices. Groundwork Collaborative highlights (or lowlights) Procter & Gamble Co. and Kimberly-Clark Corp, which control 70% of the United States’ diaper market. The companies have increased their prices 30% since 2019. Costs for wood pulp, a major component in making diapers, soared between 2021 and the beginning of 2023, driving up consumer costs. However, those costs have gone down 25% over the last year and yet, no such savings have been passed on to American families.
These new findings add to a federal report released late last year showing profits had increased beyond labor costs for the first time in 18 months. President Joe Biden leaned on that report to call out “price gouging” in December of last year, admonishing companies pulling in record profits in a speech on supply chains: “Let me be clear: To any corporation that has not brought their prices back down — even as inflation has come down, even [as] supply chains have been rebuilt — it’s time to stop the price gouging.”
The pandemic exposed how exploitative unchecked corporations have become. After CEOs loudly blamed the Biden administration’s stimulus package for rising costs, numerous studies have come out showing that the causes of rising inflation during the pandemic had very little to do with rising costs of labor or the supply chain. Even as the pandemic began to wind down, costs to consumers remained high and corporate profits continued to surge.
There has been proof positive of price gouging and even collusion. Right-wing media made a lot of hay around the skyrocketing prices of eggs during the pandemic. It turned out that two of the country’s largest egg producers were colluding (and had been for decades) on raising prices. Companies like Chick-fil-A have had to pay out class action lawsuit settlements for their pandemic price gouging. Chick-fil-A continues to raise prices on their food at the expense of the consumer.
Corporate greed and the nature of corporate profits are an important issue for Biden and the Democratic Party to focus on. Polls continue to come out showing that many Americans, though cautiously optimistic about the economy, are not seeing themselves as the benefactors of the improving economy. Even considering how well Biden has managed the economic garbage fire left to him by the former guy, voters aren’t necessarily seeing him as an important force in its reshaping. While many more Americans have jobs—better-paying jobs than they did before Biden and the Democratic Party took the reins—the rising costs continue to outpace them.
This is why detailing and going after price gouging and the continued siphoning of wealth upwards is important. The Biden administration has attempted to direct federal funds towards workers being left out of corporate profit gains. Rep. Katie Porter and others have tried valiantly to keep the corporate greed narrative alive and easy to understand, combatting the traditional media’s lackluster reporting on the matter.
Reminding Americans of how terrible Donald Trump’s previous administration was will definitely be a big part of the coming year. Democrats and the Biden administration need to do or say whatever it takes to show that we need a progressive government fighting for everyday Americans rather than the 1% of earners in our country.
