The Spark

the Voice of
The Communist League of Revolutionary Workers–Internationalist

“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx

Corporate Profits Are What’s Really Driving Prices Up

Jun 12, 2023

When prices for everything we need really started skyrocketing about two years ago, the companies, politicians, and media gave a bunch of excuses. They said the pandemic had created supply chain problems. They said oil and food prices were up because of the war in Ukraine. They even tried to blame rising wages.

Well, oil prices and the basic prices of food ingredients have come back down. Any supply problems from the pandemic are over. Any wage increases workers got didn’t nearly keep up with rising prices. And guess what—the companies continue to jack up the price of almost everything we buy!

The truth is, companies increased prices in order to increase profits. As an economist working for hedge funds put it, companies “had a perfectly good excuse to go ahead and raise prices. Everybody knew that the war in Ukraine was inflationary, that grain prices were going up, blah, blah, blah. And they just took advantage of that.”

PepsiCo is a good example. The company reported that they increased the prices of drinks and snacks by an average of 16% in the first three months of 2023, after increasing them by a similar amount at the end of 2022. This was much more than any increase in the prices they had to pay for ingredients: the government’s official measure of the prices companies have to pay to suppliers showed an increase of only 2.3% this April compared to last April.

With the prices they charge going up much more than the prices they pay, Pepsi’s profits were also way up. And the same is true for most other big companies selling the things we want and need.

They can get away with it because just a few companies dominate most industries, even food. Pepsi owns Lays, Doritos, Cheetos, Fritos, Ruffles, Tostitos and many other brands. The stores where most people shop barely sell any other snack foods! So Pepsi can increase prices—and it is hard for workers in most places to find alternatives to their products.

Corporations exist for one reason—to maximize their profits. And that comes at workers’ expense, both on the job and in the grocery store!