Understanding Inflation: Corporate Greed vs. Consumer Struggle

In the quiet, small-town vibe of Maine, Nick Rosolino and his wife run a little cleaning business that's finding it tough to keep going because everything they need to buy just keeps getting more expensive.

by Faruk Imamovic
Understanding Inflation: Corporate Greed vs. Consumer Struggle
© Getty Images/Mario Tama

In the quiet, small-town vibe of Maine, Nick Rosolino and his wife run a little cleaning business that's finding it tough to keep going because everything they need to buy just keeps getting more expensive. Their story is like a tiny snapshot of a big problem that lots of people across the country are dealing with.

While the big companies are making more money than ever, small business folks like the Rosolinos are stuck in a tough spot, trying to figure out if they should charge their customers more. They really don't want to, especially since they've been trying hard to keep things eco-friendly and top-notch for everyone.

Beyond the Pandemic

Everybody's been talking about inflation - that thing where the cost of just about everything goes up. A lot of folks first said it was all because of messed-up supply chains and everyone wanting to buy more stuff as the pandemic started.

But Nick Rosolino, like many others feeling the squeeze, points a finger at something else: big companies getting greedier. This is something a bunch of people have vented about to CNN, saying that this chase after bigger profits is making life tougher for regular folks by keeping prices high.

Even President Joe Biden has called out these companies. In his big speech to the nation, he said some businesses are taking advantage of the situation to make extra cash, a move that doesn't sit well with most of us just trying to get by.

Then there's "shrinkflation," something even Cookie Monster has noticed, where you end up paying the same but getting less. It's a sneaky way companies are making things pricier without it being so obvious.

Corporate America's Profit Surge

Even as many families and small businesses are feeling the pinch, big companies in America are making more money than ever.

Lael Brainard from the White House tells us that these companies are pocketing profits like we haven't seen since right after World War II. This big gap really shows the divide between regular folks and the huge corporations, sparking more talks about how these big profits might be making inflation worse.

Not everyone agrees on how much these big company profits are to blame for the rising prices we're all dealing with. A group called the Groundwork Collaborative thinks a big part of why things are getting more expensive is because of corporate greed, and the Federal Reserve Bank of Kansas City sees some truth in that too.

But Neil Bradley, who speaks for a lot of businesses, says it's just what happens when there's a mismatch in what people want to buy and what's available. Then there's this sneaky thing called shrinkflation. That's when companies make their products smaller instead of just putting up the price.

It might not seem like a big deal at first, but it means we end up paying more for less. This trick really puts more pressure on all of us trying to keep our spending in check.

Wall Street© Getty Images/Spencer Platt

American Families in Distress

For lots of families in the U.S., trying to pay for groceries has turned into a major struggle with rising prices.

Heather Vargas from Citrus Heights, California, tells us that what used to cost her $100 at the grocery store now takes $165 out of her wallet. Even when she tries to save money by picking cheaper options like ground beef instead of steak, it's still tough.

She and her family have to really think hard about what they're going to eat just to make sure they don't spend too much. Aaron Hackman and his husband, McKinley Conner, living in Fort Lauderdale, Florida, see it the same way.

They've noticed that big companies seem to keep charging more, taking advantage of people's need to buy essentials, just because they got away with it when prices went up during the pandemic. This kind of move by the big companies, making more money at the cost of regular folks, is something a lot of us are feeling as we try to deal with everything getting more expensive.

Corporate Strategies and Consumer Backlash

Shrinkflation is a sneaky way companies keep making money without scaring off customers. Instead of upping prices, they just make products smaller but charge you the same. So, you end up paying more for less without really noticing right away.

But over time, this definitely starts to pinch your wallet. Not everyone's cool with this trick, though. A lot of people are calling it out, saying it's just another way big companies show they don't really care about how hard it is for regular folks to make ends meet.

And when company bigwigs brag about making more money while everyone else is struggling, it only makes people angrier about these tactics.

Seeking Solutions in Policy and Public Discourse

As more and more people get fed up, politicians and those who make decisions about our economy are feeling the heat to really tackle why prices keep going up and if big companies making huge profits are part of the problem.

President Biden has been pretty outspoken about not liking how some companies set their prices, and that's sparked a lot of talk. But, there's still a lot of back and forth about whether what he's doing will actually help.

Everyone's trying to figure out what to do next. There's a big conversation happening about how companies should act, what the government should do about it, and how to make sure shoppers get a fair deal. Some folks are pushing for tighter rules to keep an eye on how companies price things and want to make sure everything's more open and fair when we buy stuff.