November 08, 2023
U.S. Sen. Bob Casey (D-Pa.) released a new report on Wednesday that he says demonstrates how corporations have increased their profits at the expense of Pennsylvania families, using inflation as a cover to raise prices while they earn record profits.
Titled “Greedflation,” the 16-page report is based on research from the Federal Reserve that found “corporate profits contributed a large percentage to inflation in the first year and contributed much less in the second” after the pandemic.
According to the report, corporate profits accounted for all the inflation in the first year of the pandemic recovery — roughly July 2020 to July 2021— and 41% of inflation overall in the first two years of the post-pandemic recovery period of July 2020 to July 2022.
The report cites data and remarks from the companies’ own financial disclosures and quarterly reports. It’s structured as a “day in the life” of a Pennsylvania family, from the point of view of a mother named Anne who earns the Pennsylvania median household income of $68,000.
It offers a list of everyday items the family uses and groceries they buy, like cereal, dish soap, toilet paper, diapers, toothpaste, and other items, alongside details about the companies’ profits on these items.
For example: The price of Huggies went up 6% between April and June of this year, but parent company Kimberly-Clark reported in its third-quarter financial results that the cost to make its products fell by $75 million, and it showed an operating profit of $168 million.
And the price of Tyson chicken, another item on the family’s shopping list, went up 20% in 2021. The company’s financial reports show Tyson doubled its profit between the first quarter of 2021 and the first quarter of 2022, and, had record revenue in 2022 due to “improved performance in our chicken segment. The report notes that Tyson Foods has been ordered to pay hundreds of millions in penalties and restitution by federal and state authorities for “illegally conspiring to inflate chicken prices.”
In the report, Casey proposes several ways Congress could act to alleviate some of the pressure corporate profits are creating for Americans’ household budgets. First, he says, Congress should reinstate the Child Tax Credit monthly payments from the American Rescue Plan. The payments, which were credited with bringing child poverty to its lowest level on record, ended in December 2021.
Casey also wants to see the federal minimum wage raised from $7.25 an hour to at least $15 an hour.
“Corporations are raising prices at the expense of Pennsylvania families because they think they can get away with it,” Casey said in a statement. “From diapers to groceries, greedflation is making everyday household items more expensive and squeezing families. I’m taking steps to fight back so we can make corporations pay their fair share and put more money in the pockets of working families.”
You can read the full “Greedflation” report here.
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