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.”
