Rising Prices Record Profits

[Slartibartfast]

That does not help me.

Again you are using words that have no quantifiable meaning. What constitutes rampant ?

I don’t believe it needs to be quantifiable

But I would say anything that is more than 2% more than current ebitda (averaged over the last 3 years perhaps, per company) should be considered profiteering until inflation is back under control

 

[bave]

Exploiting Americans during a pandemic

Now the FED has to act to rein them in. That will hurt everyone including the corporations. Uncontrolled corporate greed.

The pandemic is over and has been long over. Anyone still hunkering down like it is World War Z is out of their damned mind. The reality is that we have seen the largest jump in consumer discretionary spending in history and that is creating the demand. You can't have demand up ~18% in a year and not expect things to go bananas. Or do you think corporations can just increase supply by 18% overnight?

Price gouging is not simply a consideration of price vs demand. You also have to consider whether a company is taking undue advantage of a situation from a social standpoint.

The definition of gouging is rather clear. Unless you can show it is acute, predatory, and outside of market forces it simply isn't gouging.

 

[bave]

Btw, when labor prices shoot up, is that considered gouging? Are the nurses demanding $140-160/hr price gouging? Are the retail workers seeing large double digit wage increases gouging? Or is it only when people with money benefit that you have a problem?

 

[JMB802]

I would advise them to look for another job.

Target only gets away with it because the employees let them.

I wasn't asking for advice for them. The subject of the thread is record corporate profits. I was sharing an anecdote related to the subject of the thread.

 

[HikerGuy83]

I don’t believe it needs to be quantifiable

But I would say anything that is more than 2% more than current ebitda should be considered profiteering until inflation is back under control

A 2% increase in EBITDA is nothing.

 

[Slartibartfast]

A 2% increase in EBITDA is nothing.

That’s how I see it. Corps should not be taking advantage of people.

 

[HikerGuy83]

I wasn't asking for advice for them. The subject of the thread is record corporate profits. I was sharing an anecdote related to the subject of the thread.

Did you say something about Target's record prices. I don't recall reading it.

 

[HikerGuy83]

That’s how I see it. Corps should not be taking advantage of people.

Thanks for pointing that out.

While I don't agree that 2% or even 20% is "taking advantage", we can disagree.

However, what remains to be written is how you would enforce that.

Companies raise prices for one reason......because they can.

 

[NatMorton]

Obviously you didn't read this

Owens and her colleagues embarked on a project to monitor corporate earnings calls since last summer. Early on, she says, CEOs “were a little surprised that consumers were forking over money at these higher price points.” But now she says the view of business leaders is we are "capitalizing on this phenomenon, we're exploiting it and we're pressing it to the hilt and we're going to take it until we touch the stove.”

Slightly different historical measures of corporate profits finds profit-levels in the last decade have been well above historical averages, meaning 2021 was likely the best year for corporate profits since World War II or longer.

I read it, but I’m also aware of data that contradicts what you and that quote are trying to say.

For example, the Producer Price Index (a measure of what product and service providers must pay for their materials) is up by 10% in ‘21. Knowing this, one might come to realize that many businesses are doing a superb job in limiting how much of that increase is passed on to their customers as inflation is well below 10%. But since that doesn’t fit the “greed” narrative, it’s not mentioned in articles like they one you’re citing.

 

[Hypothetical]

this is why the government needs to be careful not to allow inflation to rise too steeply, because the prices never go back down.

and yeah greed is a capitalism flaw, no ****.

not having enough goods produced and general poverty are centralized economic system flaw, so capitalism is still better.

 

[JMB802]

Did you say something about Target's record prices. I don't recall reading it.

The subject of the thread is record PROFITS.

Lower-level employees in places like Amazon, Target and Starbucks are tired of working themselves to the bone for shareholders and CEOs. And every time they meet a goal, the bar is moved higher. It's one thing to get okay pay but like your job and feel a sense of accomplishment. It's another to get okay pay and always feel anxious because of unattainable corporate goals and schedule worries.

 

[Geoist]

Positive feedback loops can be astounding in their own right.

Higher wages help counter the negative impact of inflation on working families. And yeah yeah I know, cost of labor for business and all that. I am all for tax credits to small businesses to soften that blow.

 

[Slartibartfast]

Thanks for pointing that out.

While I don't agree that 2% or even 20% is "taking advantage", we can disagree.

However, what remains to be written is how you would enforce that.

Companies raise prices for one reason......because they can.

Enforcing it would take new legislation. It’s unfortunate that the middle class is allowed to continue to be shrunk and then we wonder why we are having ideological uprising and destabilization when these two things are correlated across societies and history.

If we want to destroy countries to enrich a few for the sake of caring about economics more than society, then we will reap what we sow.

 

[bave]

That’s how I see it. Corps should not be taking advantage of people.

What's the plan then? Price controls? Great, just watch all those corporations sell the goods elsewhere instead of the US and just have shortages instead. Super plan. That's the rub with a global economy.

 

[bave]

Higher wages help counter the negative impact of inflation on working families. And yeah yeah I know, cost of labor for business and all that. I am all for tax credits to small businesses to soften that blow.

Another libertarian around here talking about government intervention.. lol.

 

[NatMorton]

Society and the government

Capitalism is fine as long as it’s not allowed run rampant

Hmm. Over, say, the last 150 years, which has done more harm in the world when allowed to run rampant, capitalism or governments?

 

[Slartibartfast]

What's the plan then? Price controls? Great, just watch all those corporations sell the goods elsewhere instead of the US and just have shortages instead. Super plan. That's the rub with a global economy.

We can just let society continue to fall apart I guess.

This stratification directly underpins the rise of both the populist right and left.

 

[Slartibartfast]

Hmm. Over, say, the last 150 years, which has done more harm in the world when allowed to run rampant, capitalism or governments?

Capitalism given the environmental damage and plundering of third world countries.

 

[rickc]

Did you say something about Target's record prices. I don't recall reading it.

Actually it seems target has a social conscious. Or they are trying to hold prices down and make it up in increased sales.

Target CEO Brian Cornell said on an earnings call with reporters that the company is absorbing some of the higher costs it's seeing, rather than passing them on to customers. That strategy could squeeze margins.

"We are protecting prices," he said. "It's as important to our guests this year as safety has been throughout the pandemic."

Target Chief Growth Officer Christina Hennington acknowledged on the call the pressure on the retailer's margins as the company tries to move inventory quickly, despite supply chain challenges. She described that as "an appropriate long-term investment in the relationship with our guests."

Looks like shareholders don't like that plan

Investors, however, had some issues with the company’s reduced gross margin to 28%, which was below consensus of 30%, and expressed those concerns on the company’s earnings call. Target noted the decrease was largely propelled by wage increases in its supply chain, and higher inventory costs due to inflation.

 

[HikerGuy83]

The subject of the thread is record PROFITS.

Lower-level employees in places like Amazon, Target and Starbucks are tired of working themselves to the bone for shareholders and CEOs. And every time they meet a goal, the bar is moved higher. It's one thing to get okay pay but like your job and feel a sense of accomplishment. It's another to get okay pay and always feel anxious because of unattainable corporate goals and schedule worries.

Your second paragraph is related to the OP how ?

 

[Geoist]

Another libertarian around here talking about government intervention.. lol.

Most left libertarians are pragmatic, not dogmatic like the randroids and ancaps.

 

[ttwtt78640]

It still astounds me how minimum wage laws aren't set to adjust with inflation.

The federal MW has (generally, yet not recently) increased faster than CPI inflation. The initial federal MW was established at $0.25/hour in 1938 - adjusted for CPI inflation it would be $4.95/hour today. Using the highest, inflation adjusted, historic MW value (from 1968) of $1.60/hour - adjusted for CPI inflation it would be $13.19/hour today.

History of Federal Minimum Wage Rates Under the Fair Labor Standards Act, 1938 - 2009

www.dol.gov

CPI Inflation Calculator

www.bls.gov

Complicating matters, many states and some cities have enacted higher MW values than the federal MW. I agree that it would make sense to annually adjust (increase) the federal MW for CPI inflation, as is done for Social Security retirement benefits, rather than to allow congress critters to randomly adjust it based on their whims.

 

[JMB802]

Your second paragraph is related to the OP how ?

Are you playing Mod and dictating what I should post?

Surely you must know that employee expenses are part of a corporation's balance sheet. You are free to scroll on by if you are unable to process my comments into your narrative.

 

[ttwtt78640]

How often would you correct the minimum wage....just curious.

Annually, as is done for Social Security retirement benefits.

 

[NatMorton]

Higher wages help counter the negative impact of inflation on working families. And yeah yeah I know, cost of labor for business and all that. I am all for tax credits to small businesses to soften that blow.

Um, who funds the tax credits?