Companies are a lot more willing to raise prices now — and it's making inflation worse

Corporations are a lot more willing than usual to raise their prices lately, and it’s putting more of the burden of high inflation on consumers.

That may not come as much of a surprise to anyone who has browsed a grocery aisle, kicked the tires at a car dealership or filled up a gas tank of late, but even the Bank of Canada is starting to take notice of the trend, as the central bank continues its battle to wrestle inflation into submission.

Speaking to a parliamentary committee in Ottawa this week, the bank’s governor, Tiff Macklem, told lawmakers that the bank has noticed a troubling new trend coming out of the corporate sector.

For much of the past few decades, any time businesses have seen a jump in their input costs — the amount they pay for things like raw materials, energy and even workers — “they were pretty cautious about passing on [that cost into] the prices they charged for goods and services,” Macklem said.

Their reasoning was simple: they were afraid of losing customers.

agitatedpotato,

Shockingly, when you don’t come down hard enough on price gougers during a global pandemic, the rest of pf buisnesses get the idea you’re unwiling to punish anyone for price gouging.

Pyr_Pressure,

One of the products we use at our business is going up about 25-30%

We are locked in to contracts that last 3-5 years. We will be eating that cost for awhile now.

athos77,

for the 20 years leading up to 2022, corporate profits were responsible for about one-third of inflation. Last year, however, that ratio jumped to two-thirds, which means that despite legitimate increases in their cost of doing business, their take-home share of every consumer dollar effectively doubled.

Record profits everywhere - except for employees and consumers.

Advice for consumers for much of the past year has boiled down to either trying to cut back on expenses, or increasing income, but Stanford says it's misleading to put the onus on consumers to solve inflation, since they're the ones bearing the disproportionate burden of it.

dislocate_expansion,

the definition of inflation is too much currency going after too few goods, all of this blaming the companies or the workers shows the hand of the writer not understanding basic capitalist economics. so the writer is most likely either ignorant or a shill

Landmammals,

Don’t call it inflation, this is price gouging

Kushia,
@Kushia@lemmy.ml avatar

The price gouging is causing inflation.

They then have segments on the TV telling us it’s our fault for spending more money. Like how the fuck am I supposed to spend less money when all the essentials in life are skyrocketing in price!?

ghostdoggtv,

The tacit answer goes to politics. Capital is trying to gaslight people into believing that life is not worth living anymore.

athos77,

It's more that wages have simply never kept up with inflation, and now there's so little room left for the individual, while end stage capitalistic corporations are happily gouging away at stones in search of more blood.

Kushia,
@Kushia@lemmy.ml avatar

Indeed, but the gap has definitely and noticeably accelerated between them in the last few years. It’s a problem caused by greed ultimately.

LemmysMum,

Every dollar of profit is a dollar exploited from the the supplier, the worker, and the customer.

PeepinGoodArgs,

I’m getting an MBA right now and that is exactly what I’m being taught. There’s a bunch of flowery bullshit around it, but value extraction is the modus operandi.

LemmysMum,

Always has been. They’d still have slaves if we let them… Oh wait.

kemsat,

Almost like we should have laws to control their greed… 🧐

Touching_Grass, (edited )

Hey, everyone. You don’t show up to the semi finals without practicing and think you’re going to accomplish anything else but getting dunked on.

You can’t just wait around and then react when bad stuff happens. You need to practice and organize and scrimmage throughout the year. Then when the big day arrives, you all know what to do.

Start small, and grow your action. Started by building channels to coordinate actual group actions/boycotts. Tell all those bots that work real hard to tell us all to just ignore their collusion instead of organizing. Then start picking off small players with organized boycotts. Build momentum. Start fucking stuff up over super minor inconveniences to scare the ever loving shit out of these companies trying to pull bigger schemes.

You would think we didn’t have a massive communication channel attached to our hips ffs

CulturedLout,

Wouldn’t picking off small players just make the problem worse? We’d have even less options than we do now.

Touching_Grass,

By less options do you mean options like

Option A that steals your data,

Option B that funds union busting or

Option C that actively contributes to manufactured scarcity.

LemmysMum,

The sheep can’t hear you over the sound of munching grass. The cattle have no care for what their bells say.

You show me how to eradicate wilful ignorance and deliberate belligerence and I’ll show you a functional society.

You would think we didn’t have a massive communication channel attached to our hips ffs

It might as well be a broken translator.

Moeaverage,

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    LemmysMum,

    You can lead a troglodyte to knowledge but you can’t make them think.

    Moeaverage,

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    LemmysMum,

    Of course you miss the point. Thanks for being the perfect example.

    Moeaverage,

    deleted_by_author

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    LemmysMum,

    deleted_by_author

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    Moeaverage,

    deleted_by_author

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    LemmysMum,

    deleted_by_author

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    Moeaverage,

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    wildginger,

    I dunno, your doom and gloom shit is pretty old

    You can think theres no hope if you like, but kindly shut the fuck up about it if youre not interested in trying to fix things.

    LemmysMum,

    deleted_by_author

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    wildginger,

    No one is ignoring reality.

    You can acknowledge shits fucked without falling into dispair about how utterly pointless and unfixable it is.

    Its not unfixable.

    I dont give a shit if youve got depression dude, get a therapist or meds. The world isnt over, and your doom and gloom bullshit isnt helping improve the situation.

    LemmysMum,

    deleted_by_author

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    wildginger,

    Youre literally throwing a piss party, and getting upset at being told to quit pissing yourself in public.

    You arent pointing out reality, youre acting like a loser who just got dumped

    LemmysMum,

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    wildginger,

    You mean “anyone who wont pout with me is stupid, only smart people lie down and slowly die”

    You can go ahead and do that bud, I just want you to shut up while you do it

    LemmysMum,

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    wildginger,

    Your little pity party is not reality bud, your therapist will help your grasp that

    totallynotarobot,

    My translator doesn’t have the “pompous cliché” language pack installed so I’m afraid idk what you said there.

    LemmysMum,

    I’m sure you hold that wilful ignorance in high regard.

    totallynotarobot,

    Likewise with your disdain for us normies. Have a fulfilling day :)

    LemmysMum,

    If normies are wilfully ignorant and intentionally belligerent, then yes. Anyone with an iota of cognizance would have disdain for that. But don’t cry about being what you are, if you don’t like it be different.

    ghostdoggtv,

    You can argue about willful and intentional. Political corruption gives evil people a means with which to undermine education. Not a hard concept.

    LemmysMum,

    Lack of education undermines democracy, wilful ignorance undermines personal intelligence, deliberate belligerence undermines communication.

    Ones own ignorance can be eliminated by their own actions alone.

    To remain uneducated is to hate democracy.

    intensely_human,

    Yeah I’m not buying the claim that corporations have ever been any less than 100% willing to raise prices as much as they can.

    Kushia,
    @Kushia@lemmy.ml avatar

    There’s definitely been more aggressive price raising since COVID started since I think businesses discovered that they can push it a lot further than before.

    intensely_human,

    Yes exactly. They discovered that they (now) can push it a lot further than before. Their desire to isn’t new; the opportunity is.

    So the question is, what changed about the businesses’ environment that allows them to raise prices?

    In my worldview these two are big factors:

    • Pandemic lockdowns killed lots of businesses. Business assets and market share were consolidated as big survivors swallowed the remains of small failures. “Failures” is a bit harsh considering the circumstances; I only mean it in the technical sense: not able to continue, so they sell.
    • Pandemic lockdown mitigation in the form of huge quantities of cash pumped into stock market created a huge pool of cash in rich peoples’ portfolios, and over time it seeps into the active economy diluting the value of money
    The_v,

    It’s the inevitable conclusion of allowing oligopolistic conditions to be formed.

    With enough competition, companies are afraid of that one competitor who doesn’t raise their prices. This limits their price increases to actual cost increases instead of higher profits.

    Soup,

    The idea they were driving at is that, decades ago, that limit was actually imposed by the consumer. Nowadays they know people will just blame Trudeau or Biden or whoever and make excuses for the rich so there’re no more barriers. They also have a much stronger foothold than before and so don’t need to worry as much, and many of the modern scummy tactics, such as McDonald’s running anti-suing propoganda, are exactly that, fairly modern.

    dan1101,

    It’s a bad trend. I suspect a lot of times when a business raises prices, it is a long overdue increase so that tends to make the increase more. If it’s a lot of work to raise prices they probably raise them a lot now so they won’t have to do it again in X months.

    Kushia,
    @Kushia@lemmy.ml avatar

    That boot leather is addictive for some. They raise them as far as the market will allow constantly. In the last few years they’ve been testing the hell out of it.

    dan1101, (edited )

    I have experience with small business, they don’t do much testing. They are often reluctant to raise prices but when they finally do it tends to be a big jump.

    Fixbeat,

    I’m a lot more willing not to buy their overpriced products.

    IamLost,

    But what do you do when all the products are overpriced?

    KnightontheSun,

    If it is a luxury, don’t buy. If it is a necessity and if possible, buy used, repair, or make do with what you have.

    If an absolute necessity, grit your teeth and buy. But do as much as you can so you’re buying Vimes $50 boots instead of the $10 trash. Then it’ll last.

    clay_pidgin,

    GNU Terry Pratchett.

    LemmysMum,

    Nah, I’ll go with theft. What’s good for the goose is good for the gander.

    totallynotarobot, (edited )

    Mums always give the good advice.

    Edit: wasn’t trying to be snarky. This is literally the only thing most people have the power to do to make change. Listen to mum.

    ColeSloth,

    It’s unspoken collusion amongst publicly traded companies is what it is. Instead of competing against each other on price, they have all just been price jacking for profits and in today’s corporate world of massive companies that all own a dozen subsidiaries there’s no new competition for virtually anything that can come in and start competing with lower prices, so there’s no fear of being undercut by a new player and they’re all happy to all raise prices and keep most of their customer base instead of trying to compete against whatever tiny handful of companies are in their sector to expand their customer base.

    Just look at home appliances. Whirlpool owns the Jenn-Air, Maytag, Amana, Roper, and KitchenAid. There’s only a few other major corporations that make appliances and they’re all publicly traded companies that have all raised their prices well over inflation.

    VaultBoyNewVegas,

    Where I live there’s only one company responsible for public transport for the whole country/state/province and they have increased fares for busses by 7% and are now increasing train fares for most adults too (not the elderly though) just only young people and people below retirement age being affected and there’s no support for decreased fares for people in poverty or jobless or disabled. Prices had been frozen for about a year or two because of “cost of living” yet money is going less further this year because wages haven’t kept up and goods are still expensive so the least well off is going to be hit harder by the increase to public transport.

    sadreality,

    Entire western world is running a a pyramid scheme on the younger generation except the base too small to fund these boomers welfare

    Imagine working hard to not even break even so some old people can live their best lives.

    Kushia,
    @Kushia@lemmy.ml avatar

    The same where I live applies to electricity and water. The governments of the past sold them off to the public to raise revenue for election promises and ever since the prices of their services have skyrocketed.

    Electricity in particular is a complete scam as they set up a market of private resellers that provide the illusion of competition but they’re all around the same price as they all buy their electricity from the same single wholesaler.

    We even let companies extract our gas and then sell it back to us at international market rates. My country is dumb.

    Treczoks,

    Not “it makes inflation worse” - the correct term is “it makes inflation”.

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