2024/03/24
Robert Reich, Secretary of Labor under President Bill Clinton and a member of the administrations of Gerald Ford and Jimmy Carter, has accused Walmart of “price gouging.”
(Associated Press | Gene J. Puskar)
Robert Reich, Secretary of Labor under President Bill Clinton and a member of the administrations of Gerald Ford and Jimmy Carter, has accused Walmart of “price gouging.”
On Saturday, he tweeted: “Walmart hiked prices on its Great Value food brands. The result? Its net income spiked 93% to $10.5 billion toward the end of 2023. Walmart rewarded shareholders with $5.9 billion in buybacks and dividends. When I say price gouging is driving inflation, this is what I mean.”
Reich, in previous essays, has written: “Businesses have been using the coverof inflation to justify price increases, so consumers accept them.” He adds that inflation hasn’t been being propelled by an overheated economy. “It’s being propelled by overheated profits.”
Walmart is the largest company by revenue in the world and the largest private company employer in the U.S. The department store and grocery giant recently settled a class-action lawsuit for $45 million after customers accused Walmart of overcharging customers who purchased weighted groceries or bagged fruit. Customers claimed the company inflated product weight, mislabeled bagged produce weight and overcharged for clearance items.
In taking on the country’s largest retailer, Reich is echoing charges by the current administration. In his State of the Union Address on March 7, President Biden pointed his finger at “big pharma” and the “biggest corporations” that “pad their profits” with “shrinkflation,” “price gouging,” “deceptive pricing,” “exorbitant prices” and “price-fixing,” according to a Wall Street Journal scorecard.
“Big Profits and High Prices: There Is a Connection,” a WSJ headline blared.
In addition to calling out corporate greed on every-day pricing, Biden has taken aim at “junk fees,” which the Council of Economic Advisers estimates costs the average household more than $650 each year. These are charges which companies declare as mandatory but aren’t clearly disclosed fees.
Biden also urged Congress to pass a bill that targets “shrinkflation” — the practice of deceptively giving the consumer less while disguising it.
According to The Guardian, a report, compiled by the progressive Groundwork Collaborative thinktank, found that corporate profits accounted for more than half of inflation during last year’s second and third quarters. In the 40 years prior to the pandemicProfits drove just 11% of price growth, the report said.
Lindsay Owens of the Groundwork Collaborative wrote that companies are ”openly bragging to investors about how well it’s working.” Here’s one of many examples she offered:
“I think we’ve done a great job with our pricing,” boasted the CFO of Hormel, a maker of popular grocery brands. “I think it’s been very effective.” As prices went up, the company improved its operating income by 19 percent in the first quarter of 2022 compared to 2021.
Owens report said that while prices for consumers rose by 3.4% over the past year, costs for producers increased by just 1%, based on data from the Bureau of Economic Analysis.
Robert Reich, Secretary of Labor under President Bill Clinton and a member of the administrations of Gerald Ford and Jimmy Carter, has accused Walmart of “price gouging.”
On Saturday, he tweeted: “Walmart hiked prices on its Great Value food brands. The result? Its net income spiked 93% to $10.5 billion toward the end of 2023. Walmart rewarded shareholders with $5.9 billion in buybacks and dividends. When I say price gouging is driving inflation, this is what I mean.”
Reich, in previous essays, has written: “Businesses have been using the coverof inflation to justify price increases, so consumers accept them.” He adds that inflation hasn’t been being propelled by an overheated economy. “It’s being propelled by overheated profits.”
Walmart is the largest company by revenue in the world and the largest private company employer in the U.S. The department store and grocery giant recently settled a class-action lawsuit for $45 million after customers accused Walmart of overcharging customers who purchased weighted groceries or bagged fruit. Customers claimed the company inflated product weight, mislabeled bagged produce weight and overcharged for clearance items.
In taking on the country’s largest retailer, Reich is echoing charges by the current administration. In his State of the Union Address on March 7, President Biden pointed his finger at “big pharma” and the “biggest corporations” that “pad their profits” with “shrinkflation,” “price gouging,” “deceptive pricing,” “exorbitant prices” and “price-fixing,” according to a Wall Street Journal scorecard.
“Big Profits and High Prices: There Is a Connection,” a WSJ headline blared.
In addition to calling out corporate greed on every-day pricing, Biden has taken aim at “junk fees,” which the Council of Economic Advisers estimates costs the average household more than $650 each year. These are charges which companies declare as mandatory but aren’t clearly disclosed fees.
Biden also urged Congress to pass a bill that targets “shrinkflation” — the practice of deceptively giving the consumer less while disguising it.
According to The Guardian, a report, compiled by the progressive Groundwork Collaborative thinktank, found that corporate profits accounted for more than half of inflation during last year’s second and third quarters. In the 40 years prior to the pandemicProfits drove just 11% of price growth, the report said.
Lindsay Owens of the Groundwork Collaborative wrote that companies are ”openly bragging to investors about how well it’s working.” Here’s one of many examples she offered:
“I think we’ve done a great job with our pricing,” boasted the CFO of Hormel, a maker of popular grocery brands. “I think it’s been very effective.” As prices went up, the company improved its operating income by 19 percent in the first quarter of 2022 compared to 2021.
Owens report said that while prices for consumers rose by 3.4% over the past year, costs for producers increased by just 1%, based on data from the Bureau of Economic Analysis.
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