UGASports LIVE Leave questions for Coach Donnan - Wednesday at noon
- By dayneyoung
- The Dawgvent
- 6 Replies
consider this re: corporate profits
- By nice marmot
- The Dawgchat
- 32 Replies
I know some of you love blaming Joe Biden for everything, especially inflation but....
Notably, the surge in corporate profits since 2020 has been fueled, in part, by expanding corporate profit margins. Last year, corporate profit margins (excluding the financial sector) were over 15%, a level not seen since the 1950s. This is because the increases in prices for goods and services have outpaced the increase in costs — both labor and non-labor — for corporations.
According to an analysis from the Groundwork Collaborative, "corporate profits drove 53 percent of inflation during the second and third quarters of 2023 and more than one-third since the start of the pandemic." In the four decades prior to the pandemic, corporate profits contributed to just 11% of price increases.
Theoretically, this should not happen. Corporations should not be able to dramatically increase their profit margins by increasing prices because competitors should step in with lower prices and steal market share. So what's going on?
Greg Ip, who writes about economics for the Wall Street Journal, suggests that corporations are collectively taking advantage of consumer psychology. Supply shocks related to the pandemic created widespread cost increases that consumers accepted. Although those supply shocks have dissipated, many businesses have maintained higher prices anyway. "If people are paying $3 for a dozen eggs last week, they’ll pay $3 this week. And firms take advantage of that," Yale University economist Mike Sinkinson explained.
This kind of informal collusion works best in concentrated industries. The Groundwork Collective highlights the diaper industry, where "Procter & Gamble Co. (P&G) and Kimberly-Clark Corp. control 70 percent of the domestic market." Since the onset of the pandemic, "[d]iaper prices have increased by more than 30 percent" — from $16.50 per package to nearly $21. This was initially driven by an increase in the price of wood pulp, a key input for diapers but also paper towels and toilet paper. But since January 2023, prices for wood pulp have declined by 25%.
But P&G and Kimberly-Clark are not reducing diaper prices. Instead, they are bragging to investors about their massive profits. In July 2023, P&G "predicted $800 million in windfall profits because of declining input costs." In October 2023, Kimberly-Clark acknowledged that its input costs were coming down, but said that its products were still "priced appropriately."
Similar dynamics are playing out in many other industries, including "new and used cars, groceries, and housing."
etc.
Notably, the surge in corporate profits since 2020 has been fueled, in part, by expanding corporate profit margins. Last year, corporate profit margins (excluding the financial sector) were over 15%, a level not seen since the 1950s. This is because the increases in prices for goods and services have outpaced the increase in costs — both labor and non-labor — for corporations.
According to an analysis from the Groundwork Collaborative, "corporate profits drove 53 percent of inflation during the second and third quarters of 2023 and more than one-third since the start of the pandemic." In the four decades prior to the pandemic, corporate profits contributed to just 11% of price increases.
Theoretically, this should not happen. Corporations should not be able to dramatically increase their profit margins by increasing prices because competitors should step in with lower prices and steal market share. So what's going on?
Greg Ip, who writes about economics for the Wall Street Journal, suggests that corporations are collectively taking advantage of consumer psychology. Supply shocks related to the pandemic created widespread cost increases that consumers accepted. Although those supply shocks have dissipated, many businesses have maintained higher prices anyway. "If people are paying $3 for a dozen eggs last week, they’ll pay $3 this week. And firms take advantage of that," Yale University economist Mike Sinkinson explained.
This kind of informal collusion works best in concentrated industries. The Groundwork Collective highlights the diaper industry, where "Procter & Gamble Co. (P&G) and Kimberly-Clark Corp. control 70 percent of the domestic market." Since the onset of the pandemic, "[d]iaper prices have increased by more than 30 percent" — from $16.50 per package to nearly $21. This was initially driven by an increase in the price of wood pulp, a key input for diapers but also paper towels and toilet paper. But since January 2023, prices for wood pulp have declined by 25%.
But P&G and Kimberly-Clark are not reducing diaper prices. Instead, they are bragging to investors about their massive profits. In July 2023, P&G "predicted $800 million in windfall profits because of declining input costs." In October 2023, Kimberly-Clark acknowledged that its input costs were coming down, but said that its products were still "priced appropriately."
Similar dynamics are playing out in many other industries, including "new and used cars, groceries, and housing."
etc.
Steele
- The Dawgchat
- 0 Replies
Former ESPN host says her Biden interview was entirely 'scripted' by network execs: 'Every single question'
In an interview with Fox News Digital, Sage Steele revealed that her former bosses at ESPN ordered her to follow a "script" for her 2021 interview with President Biden.
NEW STORY NIT semifinal loss difficult for Bulldogs to swallow
- Hoop Dawgs
- 1 Replies
UGASports - NIT semifinal loss difficult for Bulldogs to swallow
Georgia's season came to an end after an ugly loss to Seton Hall in the semifinals of the NIT.
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NEW STORY Another midweek victory
- The Dawgvent
- 0 Replies
UGASports - Another mid-week victory
Georgia improved to 7-1 in midweek games with an easy 10-1 win over instate rival Georgia State on Tuesday.
uga.rivals.com