Quote:
Originally Posted by Escape Artist
It’s called stagflation. Prices that went sky high during the past 2-3 years never came down and wages never increased enough to offset the higher costs. I’m still shocked at the prices of basic necessities like food every time I go to the store.
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It's not about the wages, it's about the corporations and their profit margins. We know that prices of goods went up because of inflation, caused in part by the War in Ukraine, recovery from the pandemic, etc. Supply chain issues and other disruptions drove higher prices.
However, I read an interesting article in Business Insider that says corporations' markups - the difference between the price that they charge vs the cost that they paid to produce the item, has also hit record highs. A number of economists are saying that when we had the supply chain issues, the companies that had items to sell had a temporary monopoly on the item, and less competition from other companies so they were able to raise their prices. And in some cases, given the market in any area, the competing companies reach an agreement that they will
all raise their prices. Even after supply chain issues lessened, these companies kept up their high prices, despite the fact their profits were up more than they ever were. The name for this is price gouging. Politicians could do something to make corporations pay their fair share, but congress is so divided it will never happen, so that just leaves the Federal reserve to fight inflation with interest rate changes, which is hard on everyone.