The upsurge of inflation since the COVID-19 lockdowns has not had equal impacts on all Australians. Workers and low-income people have experienced the worst losses: both because their incomes, in most cases, have not kept up with prices, and because they are more dependent on essential goods and services (like shelter, food, and energy) than higher-income households.
Meanwhile, business profits have expanded strongly through this inflationary episode. Companies haven’t just passed along higher input costs to their customers. Rather, they have taken advantage of the conjuncture of factors related to the pandemic (supply shortages and disruptions, consumer desperation and pent-up demand, and oligopolistic pricing power) to push up prices far higher than needed to cover their own costs.
The result has been a process of ‘profit-price inflation’: higher profit margins are both a cause and consequence of rapid inflation. Centre for Future Work Director Jim Stanford discusses the distributional impacts of recent inflation in this new commentary for The Conversation: Underlying Australia’s inflation problem is a historic shift of income from workers to corporate profits
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Corporate Profits Must Take Hit to Save Workers
Historically high corporate profits must take a hit if workers are to claw back real wage losses from the inflationary crisis, according to new research from the Australia Institute’s Centre for Future Work.
Opening statement to the ACTU Price Gouging Inquiry
This week Professor Allan Fels, the former head of the Australian Competition and Consumer Commission (ACCC), has begun an inquiry into price gouging across a range of industries, including banks, insurance companies, supermarkets, and energy providers. The inquiry commissioned by the ACTU comes off the back of the highest inflation in 30 years and the biggest falls in real wages on record.
Blame Game on Inflation has Only Just Begun
Every inflationary episode embodies a power struggle within society over who benefits from inflation, who loses out – and who will bear the cost of getting inflation back down.