Last week, as Chairman of the Oversight Subcommittee on Economic and Consumer Policy, I led a hearing to address the high levels of inflation American families have faced since the pandemic started. While global supply chain disruptions and shifting demand have been the primary drivers of price increases, they haven’t been responsible for all of the inflation we’re seeing. One of those other factors, which we examined last week, was extreme price hikes implemented by certain companies under the cover of inflation. Using market dominance, particularly in sectors that have fewer companies competing with each other, some corporations have been increasing their prices far more than necessary to offset growing costs, even when accounting for shifts in supply and demand. These corporations are using inflation as a smoke screen to implement massive price hikes, leading to profit margins climbing to the highest levels ever recorded, and American families being the ones left to pay the price. In fact, the American people, Democrats and Republicans, appear to agree. In a recent Navigator Research poll, a whopping 80% majority of Americans viewed corporate price hikes as a cause of inflation.
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Congressman Krishnamoorthi delivers his opening statement to the Economic and Consumer Policy Subcommittee on inflation rates and corporate profit increases. (Click the image above to watch Congressman Krishnamoorthi’s full opening statement.)
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That is why, as Subcommittee Chairman, I’ve launched investigations this year into industries that implemented price hikes far in excess of their cost increases, all under the cover of shifting consumer expectations due to inflation. In January, we sent letters to meat processing giants, who collectively saw their 2021 net profit margins increase by 300% since the start of the pandemic. In March, partnering with Chairman James Clyburn of the Select Subcommittee on the Coronavirus Crisis, I wrote to three of the largest shipping companies in the world requesting financial records. These companies had 2021 profit margins 200 times greater than in 2019, but their average operating expenses increased only 18% during that time.
Neither my subcommittee’s hearing nor our ongoing investigations are about vilifying corporations. As a former small business owner myself, I know firsthand that American innovation is the backbone of our economy, and many corporate leaders deserve praise for creating jobs and growth. The Inflation Reduction Act is already drawing huge new investments in American manufacturing, and the CHIPS and Science Act has led to immediate plans for new semiconductor plants to be built in the U.S.
I’m also not suggesting that excessive price hikes are the sole cause of inflation. But we cannot ignore the reality that certain American corporations today are reporting higher profit margins than ever, while increasing prices more than necessary to cover costs—all at the expense of the American consumer. I’m committed to doing everything in my power to shine a light on these harmful practices and protect American consumers.
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Last week, I was proud to support four major bipartisan pieces of legislation that will provide more funding to local police departments and public safety organizations to help keep our communities safe. The package of four bills, the Mental Health Justice Act, the Break the Cycle of Violence Act, the Violent Incident Clearance and Technological Investigative Methods Act of 2022 (VICTIM) Act, and the Invest to Protect Act, all passed with bipartisan support.
I was proud to vote for the Invest to Protect Act because it will authorize $300 million in grants for law enforcement agencies with fewer than 125 officers, to support initiatives including evidence-based training on de-escalation, use of force, victim-centered responses for domestic violence calls, and responding to calls for service from people with substance use or mental health conditions. The Mental Health Justice Act supplements these approaches to responding to mental health crises by establishing a grant program for local governments to hire, train, and dispatch mental health professionals to relevant situations. The Break the Cycle of Violence Act will provide federal grants to communities for evidence-informed community violence intervention and prevention programs designed to disrupt and end cycles of violence. This legislation is based on extensive research which has shown that the combination of community-oriented intervention programs and common-sense violence prevention policies can halve gun violence rates in urban areas and affected surrounding communities in as little as two years. Finally, I voted for the Violent Incident Clearance and Technological Investigative Methods Act (VICTIM Act), which was introduced by Senator Durbin and will establish a grant program at the Department of Justice to help law enforcement agencies improve their clearance rates for homicides and non-fatal shootings to bring those responsible to justice and to prevent future violence.
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The best way to stay up to date on these issues beyond our newsletter is through my social media accounts, which I update multiple times each day. You can follow my Twitter here, my Facebook page here, and my Instagram here. Thank you for staying engaged in our community.
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P.S. I always enjoy hearing from constituents, so feel free to comment and share my social media posts! Here are the links: Twitter here, Facebook page here, and Instagram here. |
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