Inflation has been a major economic concern of the past couple years, dragging down President Joe Biden’s approval ratings and leading the Federal Reserve to raise interest rates and risk a recession to combat it. Inflation has been a real phenomenon with real effects on people’s lives. But prices aren’t just increasing for reasons that it takes an economics degree to understand. We can all understand corporate greed—and Sen. Bob Casey has released a pair of reports showing how lots of the price increases we’re seeing are all about corporate greed.
Casey’s newer report looks specifically at price increases on holiday meals. In relevant news this week specifically, turkey prices have fallen this year—but they’re still higher than they were in 2020. Prices on chicken, pork, and potatoes have outstripped inflation: “Since January 2020, inflation overall has risen 19 percent. But over the same period of time the price for boneless chicken rose 38 percent, twice as much as inflation.” Prices for corn, a key ingredient of chicken feed, have dropped in that time. But what’s risen is corporate profits: “Tyson Foods, the largest producer of chicken in the US and one of the largest producers of beef and pork, doubled its profits in the final quarter of 2021 and then reported record sales and earnings 2022, the last full year available.”
Tyson and Pilgrim’s Pride, the second-largest chicken producer in the U.S., have both paid fines or settlements in recent years for price-fixing or illegally inflating prices.
Even potatoes, traditionally a cheap staple food, have had significant price increases in recent years, now sitting at 60% over last year. And what do you know: The largest producer of frozen potato products told shareholders “it has greatly outperformed the S&P 500 over the past several years because its potatoes are ‘one of the highest-margin food items on the menu.’”
It’s not just food, though. Casey released a report earlier in the month linking increased prices and increased corporate profits on a series of other products. The price of Huggies diapers went up 6% from April to June 2023. Meanwhile:
In its Q3 2023 quarterly report Kimberly-Clark, the maker of Huggies, reported that the cost to make its products fell by $75 million, including in the segment that makes diapers. Instead of passing those savings along to consumers, Kimberly-Clark banked $168 million in operating profits in Q3 2023.
The price of Palmolive dish soap went up 12% from March 2022 to March 2023. But:
Colgate-Palmolive’s CEO admitted on a 2022 earnings call that price increases have helped them improve their gross margins. He later bragged that Colgate-Palmolive has “led pricing” compared to other companies, and that “We have seen competitors begin to follow,” reducing pressure on his own company to cut prices.
Overall, Casey reports, “For the average Pennsylvania family, costs went up by $3,194 in 2021 and by $3,546 in 2022 just due to corporate profiteering.” To fight back, Casey calls for Congress to pass bills like the Price Gouging Prevention Act and the Big Oil Windfall Profits Tax, as well as stronger enforcement of existing consumer protection regulations. He also points to the impact of the expanded child tax credit in 2021, which lifted 2.9 million children out of poverty and gave millions more families some financial breathing room. The answer to corporate greed is strong policy (which Republicans will never allow as long as they’re in a position to stop it). But it’s also just important to understand what’s going on when you look at rising prices on everyday products. Too often it’s companies that have decided that with inflation in the headlines, they can get greedy and consumers won’t blame the changes on them.