U.S. Sen. Bob Casey (D-Pa.) released a new report Wednesday that he says shows how companies have increased profits at the expense of Pennsylvania families by using inflation as a cover to raise prices and at the same time achieve record profits.
The 16-page report, titled “Greedflation,” is based on Federal Reserve research that found that “corporate profits contributed a large percentage of inflation in the first year after the pandemic and contributed much less in the second year.”
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According to the report, corporate earnings accounted for all inflation in the first year of the post-pandemic recovery – about July 2020 to July 2021 – and 41% of total inflation in the first two years of the post-pandemic recovery period from July 2020 to July 2022 .
The report cites data and notes from the companies’ own financial disclosures and quarterly reports. It’s structured like a “day in the life” of a Pennsylvania family, from the perspective of a mother named Anne, who earns the median household income of $68,000 in Pennsylvania.
It provides a list of everyday items and groceries the family purchases, such as cereal, dish soap, toilet paper, diapers, toothpaste, and other items, as well as details of the companies’ profits on these items.
For example: The price of Huggies rose 6% between April and June this year, but parent company Kimberly-Clark reported in its third-quarter financial results that the cost of producing its products fell by $75 million , and it reported a company pension profit of $168 million.
And the price of Tyson chicken, another item on the family’s shopping list, rose 20% in 2021. The company’s financial reports show that Tyson doubled its profit between the first quarter of 2021 and the first quarter of 2022 and achieved record sales in 2021 and 2022 due to “improved performance in our chicken segment.” The report notes that Tyson Foods was ordered to pay hundreds of millions in penalties and restitution by federal and state authorities for “illegally conspiring to increase chicken prices.”
In the report, Casey suggests several ways Congress could act to ease some of the pressure that corporate profits are putting on Americans’ household budgets. First, he says, Congress should reinstate the monthly child tax credits from the American Rescue Plan. The payments credited with the contribution Bring child poverty to its lowest level on record, ended in December 2021.
Casey also wants the federal minimum wage raised from $7.25 an hour to at least $15 an hour.
“Companies 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 food, greed inflation is making everyday household items more expensive and putting families under pressure. I’m taking action to fight back so we can make companies 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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