U.S. Experts Slam Corporate Profiteering That Drives Inflation

Progressive policy experts took aim at corporate greed and profiteering during a US Senate hearing on "shrinkflation," the process of reducing the size or quantity of a product while selling it at the same price, Brett Wilkins of Common Dreams reported for Raw Story.

Corporate profits have exploded since 2020, and a recent study by the Groundwork Collaborative found that for much of 2023, corporate profits drove 53% of inflation.

At the Senate Committee on Banking, Housing, and Urban Affairs hearing—entitled "Higher Prices: How Shrinkflation and Technology Can Impact Consumers' Finances"—Chair Sherrod Brown (D-Ohio) began by acknowledging that "prices today are far too high, and families are having a harder time finding a fair price, seeing more of their paycheck vanish into thin air."

He noted that prices and corporate profits are going up at the same time. A study by the Kansas City Fed found that corporate profits drove half of the price increases in 2021."

Bilal Baydoun, director of policy and research at the Groundwork Collaborative, testified that companies reduce the size or volume of common household items.

For some essential goods, shrinkflation accounted for roughly 10% of the price increase consumers experienced over the last four years, he added.

Corporate profits have exploded since 2020, and a recent study by the Groundwork Collaborative found that for much of 2023, corporate profits drove 53% of inflation.

Over the 40 years before the pandemic, profits drove just 11% of price growth. In the final three months of 2023, corporate profits reached an all-time high of $2.8 trillion, Commerce Department data revealed.