The greater share taken from Minnesotans’ paychecks by rising consumer costs is being seen in several ways — including the opportunity for corporate profit.
A new report from the Groundwork Collaborative said companies are taking advantage of the pandemic to drive up the costs of products such as prescription drugs, groceries and diapers. The authors pointed to corporate earnings calls in which some CEOs openly brag about their price hikes.
Shirwa Adan, Executive Director of Central Minnesota Community Empowerment Organizationwhich helps immigrants with needs such as placement, said it was clear these people were feeling the pressure.
“It’s something that the community feels and those low-income families, maybe using government assistance, what you see is all they’ll get, it stays the same,” a- he said, “but prices have doubled across the board.”
He also said he saw local residents scrambling to find better-paying jobs to offset price hikes. The report compiled information that details near-record profits for the companies. And the US Department of Commerce noted that those margins are at their highest level in 70 years.
Business leaders have argued that the spikes are largely fueled by supply chain issues and labor shortages, but the Groundwork Collaborative has suggested those arguments are a decades-long shield for businesses monopolizing certain industries, creating less competition and exacerbating the supply problems seen today.
Coleen Bui, owner of Shear Reflections, a hair salon in Worthington, said products are harder to buy, those she can locate are more expensive, and her stylists have seen changes in the customer activity.
“People stretch their dates in between,” she said. “It makes a difference on what the girls take.”
Shannon Berns, who founded Du Nord, a Minnesota-based small business consulting firm, said customers are still in “recovery mode” from the pandemic and are now passing on price increases for their products to customers. She said some were frowning about the extra vendor costs.
“It’s hard for them to understand why my prices went up 50% last month,” she said, “and now you’re raising them again, that much or more.”
The Minnesota attorney general called on state lawmakers to move forward legislation on the matter, including updates to anti-competitive statutes. But the report says a broader crackdown is needed, along with more investment in supply chain infrastructure, to make a difference.
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