During an interview with CBS’s “The Takeout” podcast that took place before the release of the February inflation numbers, acting Labor Secretary Julie Su said that there is price gouging and “One reason for inflation is that companies are taking advantage of market forces or just charging more in a way that increases their profit, but has nothing to do with worker’s wages.”
Su said, [relevant remarks begin around 36:45] “I think there is something to the argument that, of course — the connection between wages and prices. But that is not — it’s not like a direct correlation or causation. Oftentimes, prices go up, even when wages don’t. So, this a — this is sort of the president’s approach to the idea of — it’s a shrinkflation idea, but it’s also a, like, price gouging. One reason for inflation is that companies are taking advantage of market forces or just charging more in a way that increases their profit, but has nothing to do with worker’s wages. So, I want to de-link those things as necessarily connected. But, in some situations, it does — it is connected. And I think the answer there is looking at the economic recovery we’ve had, the fact that workers make more is better for our economy period. They have more to spend. Workers, especially workers who work for hourly wages, are the ones who are spending money in the small businesses in their community, in restaurants. They’re the ones who keep the economy going and that’s why, in addition to the well-being of workers, just from an economic perspective, money in worker’s pockets is a good thing.”
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