Changing Cost Environment and Frustration

Confronting the Cost-of-Living Crisis – Roosevelt Institute

Perhaps, you remember during the pandemic the pricing of food did increase as businesses did slow down. I do not recall much missing from the food shelves either. There were small changes in packaging which did impact pricing in that you paid the same amount for less. The pandemic gave rise to a perfect excuse for increasing prices.

Fast forward to the present.

The post-pandemic economy has been marked by rapid economic growth and job gains but impacted negatively by significant increases in the cost of basic necessities, including groceries, rent, and utilities. While wages for some workers have outpaced inflation, people are understandably frustrated by how much more expensive everything is. Many remember sticker prices that were 25 to 50 percent lower not long ago. For millions of American families, the cost of just trying to get by feels punishingly unfair while getting ahead feels completely out of reach.

Corporations boast about skyrocketing profits, shareholder payouts, and executive compensation packages. Typically, one can find headlines boasting new innovative tactics corporations have unveiled to rip customers off, and they can’t wait to find out how to use artificial intelligence to improve them. Fast-food companies are using “surge pricing” to charge you more for a coffee during morning rush hour. Grocery stores are using surveillance pricing to charge more for your favorite cereal brand, knowing you’ll pay the extra dollar. Car manufacturers are making you pay a monthly subscription for the heated seats in your car. Landlords and meatpackers are using algorithms to price fix, hiking rents and grocery prices and reducing housing and food supply. When not exploiting technological advancements, corporations are taking advantage of crises, jacking prices up well beyond what’s necessary or warranted when given the opportunity/ Or, worse, they’re buying up their competition or suppliers so that they can exploit their market power to charge exorbitant prices because consumers have no choice but to pay up. 

Groceries, for example, are one of the most salient, regular, and universal expenses. Supply chain disruptions fueled considerable price increases over the past few years, and they continue to cause acute shortages and price spikes—as anyone who has cooked an omelet lately well knows. Further, housing affordability has reached crisis levels, with rents surging and homeownership slipping further out of reach for ordinary Americans as mortgage rates stay elevated and housing supply remains constrained. Beyond the essentials, basic recreational and leisure activities have become prohibitively expensive, particularly for families. A family outing to a baseball game, a classic American pastime, now costs nearly $150. Watching television is increasingly difficult without juggling multiple streaming subscriptions (on top of paying for internet access), each of which has hiked prices while fragmenting access. From the checkout aisle to the box office, American consumers are nickel-and-dimed by a system that has few checks on increasingly consolidated corporate power.

As Roosevelt Institute suggests, policymakers could take affirmative steps to rein in runaway costs, address corporate profiteering, and restore a sense of fairness to the economy. Existing consumer protection statutes and institutions should be strengthened, not ransacked. Novel policies could confront affordability, corporate overreach, and just plain annoyances to improve consumers’ lives.

Unfortunately, I do not see this type of confrontation coming from this administration. They are more likely to promote rent taking than jawbone against it. High on as the economy will eventually correct itself with a recession.

Extra reading:

The Urge to Surge – The American Prospect

One Person One Price – The American Prospect