NOVEMBER 2023

A SPECIAL REPORT ON

GREEDFLATIONHOW CORPORATIONS ARE MAKING RECORDPROFITS ON THE BACKS OF AMERICAN FAMILIESSENATOR BOB CASEYCHAIRMAN, SUBCOMMITTEE ON CHILDREN & FAMILIESHEALTH, EDUCATION, LABOR, & PENSIONS COMMITTEEA DAY IN THE LIFE

MEET ANNE
Anne is a Pennsylvania mom of two kids, ages six and two. She has a middle class job and1
took home the median household income in Pennsylvania: approximately $68,000. In
22021 she spent nearly $67,000 for herself and her family, the national average. With theright amount of budgeting, Anne’s family has been able to live comfortably and pay theirbills. But lately, Anne has noticed that her dollar isn’t going as far as it used to. Some of thiscan be attributed to inflation, which has has squeezed the budget of families like Anne's overthe last few years. But Anne can’t shake the feeling that something else is going on. Even as
inflation has moderated in the last year, Anne still struggles to make ends meet and wonders
whether she is being taken advantage of.
Anne’s intuition is correct: like millions of Americans, Anne is falling victim to greedflation.
Corporations are using inflation as a cover to raise prices, while raking in record profits at theexpense of Anne and middle class families like hers. This report will follow Anne through her
typical day to show how greedflation is hurting her family.

GREEDFLATION
While monthly inflation has slowed with the help of Democrats’ passage of the Inflation
Reduction Act, 3 families like Anne’s are still living with artificially high prices. From July 2020
through July 2022, inflation rose by 14 percent, 4 but corporate profits rose by 75 percent
over those two years,5 five times as fast as inflation.
1.

Corporations raised prices on consumers – not to offset inflation – but to increase their own
profits. Federal Reserve research found that “corporate profits contributed a large
percentage to inflation in the first year and contributed much less in the second” after the
pandemic. In particular, they found that corporate profits accounted for all the inflation in
the first year of the pandemic recovery (roughly July 2020 to July 2021) and 41 percent ofinflation overall in the first two years of the post-pandemic recovery (July 2020 to July
6.
2022).
Putting that in terms of Anne’s family budget: Anne’s family expenses went up by
6$3,194 in 2021 and by $3,546 in 2022 just due to corporate profiteering.
According to the Bureau of Labor Statistics (BLS) the average family spent $61,332 in 2020.
Average family spending grew to $66,928 in 2021, 7 or 9.1 percent. It would seem like Anne
was able to spend a lot more in 2021, but inflation also rose by 5.2 percent from July 2020
to July 2021. That means of the $5,596 extra she spent in 2021, about $3,194 was due to
inflation. According to the Federal Reserve research, all of that $3,194 in inflation was due tocorporate profit-taking.

ANNE’S FAMILY SPENDING$75,000$70,000$65,000$60,000$55,000$50,000
2020

2021

2022

2020 Family Spending

Inflation Due to Corporate Profits

Extra Purchasing Power

Inflation Due to Other Causes**A number of additional factors contributed to inflation in recent years, including the war in Ukraine, supply
chain disruptions, and chip shortages.
Sources: Bureau of Labor Statistics: Consumer Expenditures in 2022, Consumer Price Index; Federal
Reserve Bank of Kansas City

In 2022, Anne’s family spending grew with the national average to $72,967. That means thatsince 2020, her annual spending had grown $11,633, a 19 percent increase. Of her total
increase in spending since 2020, $8,587 or 14.1 percent just went to catching up with
inflation.
2.

The year 2022 did see some inflationary events like the war in Ukraine and various supply
chain disruptions for micro processing chips, lumber and other goods. But still, according to
the Federal Reserve research, Anne’s family paid $3,546 just toward corporate profiteeringin 2022, above what she had paid in 2020.
In total in 2021 and 2022, Anne paid $6,740 more as a result as a result of greedflation. That
$6,740 could have gone to new winter coats for her kids, or to enroll her oldest in afterschool activities, or even a few family dinners out so that Anne could take a night off fromcooking. Instead, it lined the pockets of corporate executives and wealthy shareholders.
Corporate profits in 2023 remain well above their pre-pandemic levels. That means Anne
will continue paying at least $3,546 for corporate greed this year.

CORPORATE PROFITS (2012-2023)
National Income: Corporate profits before tax (without IVA and CCAdj), Q2 2020=100
Corporate profits post-pandemic

180
170
160
150
140
130
120

Corporate profits pre-pandemic

110
100
90

Q1
2012

Q1
2013

Q1
2014

Q1
2015

Q1
2016

Q1
2017

Q1
2018

Q1
2019

Q1
2020

Q1
2021

Q1
2022

Q1
2023

Other analysts have reached similar conclusions as the Federal Reserve research and ourreport, finding that increased corporate profits comprise a large portion of increased
inflation in the post-pandemic period. These analysts include the President of the European
Central Bank,8 the International Monetary Fund (IMF),9 the Economic Policy Institute (EPI),
and Roosevelt Institute, among others. 10

3.

MORNING ROUTINE:GETTING KIDS DRESSED AND FEDAnne starts each day by waking up her two kids to them get ready for school and day carebefore she drives to work. Her morning routine is the same as many Pennsylvania families—changing diapers, brushing teeth, pouring cereal, and rushing out the door. These days, forAnne and many others, mornings are no longer just hectic, they’re also more expensive.

RECEIPTHUGGIES DIAPERS

6%

In its Q3 2023 quarterly report KimberlyClark, the maker of Huggies, reported thatthe cost to make its products fell by $75
million, including in the segment that makes
diapers. Instead of passing those savings
along to consumers, Kimberly-Clark banked$168 million in operating profits in Q3 2023. 12

from April to June 2023
CREST TOOTHPASTE

7%from October to December 2022

FROSTED FLAKES

14%
from June 2022 to June 2023

In a filing with the Securities and Exchange
Commission, Proctor and Gamble noted thata net sales increase in fiscal 2023 was driven
by “higher pricing.” 14During a recent earnings
call with investors, Proctor and Gamble
reported that it does not see a need to offer
sales or price cuts on their products. 15

In its 2022 fiscal fourth quarter, Kellogg
reported better-than-expected profit. 17
During its Q4 2022 earnings call, thecompany stated that “Our cash flow
increased year-on-year” and discussed how
it would spend more on buybacks andincreased dividends. 18
4.

GROCERY STORE
On her way home from work, Anne stops by the grocery store to do her weekly shopping.
She buys a chicken to roast for dinner that evening, snacks to pack in her kids’ lunches, and a
few pints of ice cream as a treat. She also stocks up on household products like dish soap,
toilet paper, and surface cleaner.

Tyson doubled their profits from Q1 2021 toQ1 2022 21 and had record revenue in 2022,
which it attributed to “improved
22
performance in our chicken segment.”
Over the past 3 years Tyson Foods has beenordered to pay hundreds of millions in
23
penalties and restitution by federal andstate 24 authorities for “illegally conspiring to
inflate chicken prices.”
In the first half of 2023, Ben & Jerry’s parent
company, Unilever, saw its sales volume
decline, yet its operating profits increased by
20%.26PepsiCo’s CFO admitted in April 2023 thateven though inflation was going down, theirprices would not.28 Later that month, hebragged in an TV interview that he didn’t“think [PepsiCo’s profit] margins are going todeteriorate at all” and that “consumers
generally look at our products and say ‘youknow what – they are worth paying a little bit
more for.’” 29

RECEIPTCHICKEN20%
in 2021

BEN & JERRY’S ICE CREAM

12%from April to June 2023
SUN CHIPS

16%
from January to March 2023
5.

Colgate-Palmolive’s CEO admitted on a2022 earnings call that price increases havehelped them improve their gross margins. He
later bragged that Colgate-Palmolive has “ledpricing” compared to other companies, andthat “We have seen competitors begin tofollow,” reducing pressure on his own
company to cut prices.31
Clorox’s CEO has noted that its products are“‘household essentials’ that can withstand”
33
inflation. On an investor call, she discussed
how the company is “coming off four
rounds” of “significant price increase.” When
asked if Clorox might roll back price increases
as commodity prices fall, the company
admitted it “anticipate[s] the pricing
increases will stick.” 34
Kimberly-Clark saw profit increase by morethan $100 million when comparing Q3 2023
to Q3 2022. The company attributed theincrease in profit to higher prices.36According
to the Kimberly-Clark CEO, the increased
profits despite price increases “reflect theessential nature of our categories.”37

PALMOLIVE DISH SOAP

12%from March 2022 to March 2023

CLOROX MULTI-SURFACE CLEANER

16%
from June 2022 to June 2023

SCOTT TOILET PAPER

10%
from October 2022 to March 2023

6.

MOVIE NIGHT
Friday night is movie night in Anne’s house. After a spirited debate at the dinner tablebetween Anne and her six-year-old, they decide to watch a classic: Finding Nemo. Anne
grabs the popcorn from the pantry, cracks a Diet Coke to keep herself awake, and they settle
in for movie night. It’s a perfect evening for Anne’s family, except that it’s costing more thanit used to.

RECEIPT
ORVILLE REDENBACHER’S POPCORN

17%
from October to December 2022

Conagra’s CFO noted that “Food companies
tend to do better” when consumers arewatching their household budgets “because
people… don’t go out to eat as much” which
39“plays well for us.” An analyst at Goldman
Sachs noted that Conagra “has been able toprice its profits above inflation rates and40
recovered its profit margins.”

DIET COKE

11%
from October 2022 to October 2023

The CEO of Coca-Cola claimed that thecompany had “earned the right” to push
price hikes because its sodas are popular. 42

DISNEY+27%
in 2022

Price increases would continue to “betterreflect the value of our content offerings,”
said Disney's CEO.44

7.

CONCLUSION
Greedflation is costing Anne’s family every day. While Anne is budgeting and finding it
harder to save for the future, corporations are getting richer – and greedier. Corporate
executives have openly bragged that they will keep prioritizing their profits over theircustomers like Anne. These companies charge artificially high prices for classic brands andstaple products simply because they can. And because they believe they have “earned theright” to charge families like Anne’s more to line their shareholders’ pockets.
Senator Casey believes enough is enough: It’s time to put a stop to greedflation.
He knows that we can lower costs for working families like Anne’s by
doing four simple things:

PUT MORE MONEY IN THE POCKETS OF
WORKING FAMILIESCongress should take immediate steps to provide middle-class American with moredisposable income and to ensure that they are equal participants in a growing economy.
The Child Tax Credit monthly payments from the American Rescue Plan, which Senator
Casey strongly supported, drastically reduced child poverty, dipping to the lowest level
on record. 45 Over 2.2 million Pennsylvania parents used those payments for food, rent,
school supplies, and child care.46 Reinstating the Child Tax Credit monthly payments
will help families like Anne’s breathe easier.
Over the past few years, Senator Casey has fought to pass laws like the American Rescue
Plan, CHIPS and Science Act, Infrastructure Investment and Jobs Act, and Inflation Reduction
Act, which have grown Pennsylvania jobs numbers to the highest on record and sent thePennsylvania unemployment rate down to the lowest level on record.47 Senator Casey
will keep fighting to provide good-paying job opportunities for Pennsylvania families.
Senator Casey supports raising the minimum wage, which has been stuck at $7.25 since2009, to at least $15 an hour. He is also fighting to eliminate the subminimum wage,
which would raise wages for workers with disabilities, some of whom are being paid as
little as a few cents an hour.

8.

MAKE BIG CORPORATIONS PAY
THEIR FAIR SHARE
The 2017 Republican tax bill, which Senator Casey firmly opposed, lowered the corporate
tax rate from 35 percent to 21 percent while adding at least $1.8 trillion to the national debt.48
Proponents claimed that the corporate tax cuts would trickle down to a $4,000 raise for the49
average family, but that benefit never materialized for most families. Instead, corporationsbought back stocks from shareholders. The S&P 500 companies spent a record $806 billion
on stock buybacks in 2018 alone. 50
The 2017 tax law clearly failed to bring any significant relief to American consumers.
Senator Casey believes that raising the corporate tax rates and making corporations pay
their fair share would give families like Anne a fighting chance.51
Senator Casey introduced the Tax Fairness for Workers Act, legislation to reverse a
provision in the 2017 tax bill that stripped workers of their ability to deduct common
expenses incurred because of their work. Furthermore, it would improve upon theprevious deduction so all workers can deduct the cost of their union dues “above theline.” 52

FIGHT UNFAIR CORPORATEPRICE GOUGING
There needs to be real, concrete consequences when corporations engage in the pricegouging.
53
Senator Casey supports legislation like the Big Oil Windfall Profits Tax Act and the Price
Gouging Prevention Act 54 to bring price relief to consumers like Anne. The Big Oil
Windfall Profits Tax Act would provide quarterly rebates of excess profits to working
families.
Senator Casey also fought to pass historic legislation in 2022 allowing Medicare tonegotiate prescription drug prices for the first time. The law also capped the price of
insulin for Medicare recipients at $35, all of which will save consumers billions.
9.

TAKE ON CORPORATE MONOPOLIES TO
INCREASE COMPETITION AND LOWER COSTS
When corporations grow large enough to control an entire market, they reduce competitionand can harm customers and workers alike.
Senator Casey voted for legislation to empower antitrust enforcement and protect
consumers, including substantially increasing outdated merger filing fees for largetransactions, requiring disclosure of foreign subsidies in premerger filings, and increasing
55
funding for antitrust enforcement.
Senator Casey also led several of his colleagues in urging the Biden Administration toutilize all of its oversight tools to ensure that hospital consolidation does not lead toharm for patients, nurses, and doctors.56 He also supports banning corporate practices
that keep workers from leaving to find new jobs at competitors. 57
Senator Casey wrote to the Federal Trade Commission urging it to investigate whether
pending mergers of huge oil and gas companies would drive up oil and gasoline prices
and violate antitrust law and, if so, to oppose the mergers. 58

10.

ADDENDUMEXTRA INFORMATION ON PRODUCT PRICE RAISES

11

Huggies Diapers: The cost of Huggies diapers rose 6% from April to June 2023.
Crest Toothpaste: Proctor and Gamble, maker of Crest toothpaste, increased prices by
about 7 percent in Q4 2022, year over year. 13
Frosted Flakes: Kellogg raised prices on its products over 14 percent between Q2 2022
and Q2 2023. 16
Chicken: Tyson Foods, the nation’s largest chicken producer, raised prices by 20
19
percent in 2021. Prices for boneless chicken rose to a record high of $4.75 per poundwholesale in 2022 and remain over a dollar per pound higher than they were prepandemic.20
Ben & Jerry’s Ice Cream: Unilever, maker of Ben & Jerry’s ice cream, raised prices by 1225
percent during a single quarter in 2023.
SunChips: PepsiCo, maker of SunChips, raised the average price of its snacks and27
beverages by 16 percent in the first three months of 2023.
Palmolive Dish Soap: Prices for Colgate-Palmolive products increased 12 percent
between first quarter 2022 and first quarter 2023.30
Clorox Multi-Surface Cleaner: Clorox raised prices in their Health and Wellness
segment by 16 percent between fiscal Q4 2022 and fiscal Q4 2023. This price raisemeant that customers bought 2 percent fewer of their products. But the net result ofhigher prices and lower sales was good for Clorox’s bottom line: their revenue rose 12
percent, beating expectations.32
Scott Toilet Paper: Kimberly-Clark Corp, the maker of Scott, Cottonelle, and Viva toilet
paper raised prices by 10 percent for two straight quarters. 35
Orville Redenbacher’s Popcorn: Conagra, which owns the Orville Redenbacher brand,
increased its prices by 17 percent in the quarter leading to January 2023. In the threeprevious quarters, it increased prices by 14 percent, 13 percent, and 9 percent.38
Diet Coke: Last year, Coca-Cola increased the average selling price of its products by 11
percent. 41
Disney+: Disney+ increased its ad-free subscription service by $30 a year to a44
whopping $140. Disney also owns Hulu, which increased its ad-free price by $36 a year.

11.

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15.