Minnesota Grapples with Inflation; Report Blames Corporate Profits
Wednesday, April 20, 2022
The bigger bite taken out of Minnesotans' paychecks by higher consumer costs is being seen in multiple ways - including the possibility of corporate profiteering.
A new report from the Groundwork Collaborative said corporations are taking advantage of the pandemic to drive up costs for things such as prescription drugs, groceries and diapers. The authors pointed to corporate earnings calls in which some CEOs openly boast about their price hikes.
Shirwa Adan, executive director of the Central Minnesota Community Empowerment Organization, which helps immigrants with needs such as job placement, said it's clear these individuals are feeling the squeeze.
"It's something that the community is feeling and those low-income families, maybe that are using government assistance, what you're seeing is whatever they will receive, it stays the same," he said, "but the prices have doubled across the board."
He also said he sees local residents scrambling to find higher-paying jobs to offset price increases. The report compiled information that details near-record corporate profits. And the U.S. Commerce Department noted these margins are at their highest level in 70 years.
Corporate leaders argued the spikes are largely fueled by supply-chain issues and labor shortages, but the Groundwork Collaborative suggested those arguments are a shield for decades of corporations monopolizing certain industries, creating less competition and worsening supply issues seen today.
Coleen Bui, who owns Shear Reflections, a hair salon in Worthington, said it's harder to buy products, the ones she can locate are more expensive, and her stylists have seen changes in customer activity.
"People stretch out their appointments further in between," she said. "It makes a difference on what the girls take in."
Shannon Berns, who founded Du Nord, a Minnesota-based small-business consulting firm, said clients are still in "recovery mode" from the pandemic and are now passing along price hikes for their products onto customers. She said some are raising eyebrows about the extra costs from suppliers.
"It's hard for them to understand why I just had my prices hiked 50% last month," she said, "and now you're hiking them again, by the same or more."
Minnesota's attorney general has called on state lawmakers to advance legislation on the issue, including updates to anti-competitive statues. But the report said a broader crackdown is needed, as well as more investment in supply-chain infrastructure, to make a difference.
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