Dollar Tree CEO Michael Witynski—who raked in around $11 million in total compensation last year—announced Tuesday that his company is raising prices to $1.25 at stores across the United States, pointing to the current “inflationary environment.”
“Corporations are using the excuse of inflation to raise prices and make fatter profits.”
But observers weren’t buying Witynski’s explanation for the imminent price hike, which was publicized as Dollar Tree reported $216.8 million in net profits for the third quarter of 2021. The 25% price increase is expected to take effect at Dollar Tree stores nationwide in early 2022.
“Dollar Tree made $1,230,000,000 in profits this year, gave its CEO $10,767,883, and pays workers as little as $8.32 an hour. Over 7,400 Dollar Tree employees are forced to rely on food stamps and Medicaid subsidized by U.S. taxpayers,” Warren Gunnels, majority staff director for Senate Budget Committee Chair Bernie Sanders (I-Vt.), pointed out on Twitter.
“Unfettered greed is corporate America closing U.S. factories where workers made $30/hour, opening sweatshops abroad where workers make 30 cents/hour, hiring U.S. workers to sell the sweatshop goods for $8/hour and blaming inflation for a 25% price increase at Dollar Tree,” Gunnels wrote.
Dollar Tree’s decision to push higher costs onto consumers follows a growing trend of companies citing inflationary pressures in the economy to justify price hikes—even as they bring in record profits and lavishly reward their executives and shareholders. In 2020, according to a recent analysis by the Economic Policy Institute, CEOs made 351 times as much as a typical worker, and CEO pay has soared by 1,322% since 1978.
The Institute for Policy Studies noted in a May study that Witynski—who took over as Dollar Tree’s CEO in July of 2020—received $11.3 million in total compensation last year.
“That’s 715 times as much as the pay for the company’s median worker, a part-time U.S. store employee who earned $15,816,” IPS observed.
A report released earlier this month by the watchdog group Accountable.US found that at least a dozen major U.S. corporations have “reported nearly $11 billion in profits the same quarter they announced price increases, along with over $34 billion in stock buybacks and dividends this year.”
“As millions of Americans are already struggling against a worsening hunger crisis, eight of these companies, including Proctor & Gamble, PepsiCo, and Coca-Cola, have jacked up food prices, or announced their intent to do so, despite recent healthy financial reports,” the group said.
While acknowledging that many factors—including major supply chain disruptions caused by the coronavirus pandemic—are contributing to rising U.S. inflation, progressive economists and lawmakers have argued that consolidated corporate power is a key driver of recent price increases.
“Corporations are using the excuse of inflation to raise prices and make fatter profits. The result is a transfer of wealth from consumers to corporate executives and major investors,” former Labor Secretary Robert Reich wrote in a blog post earlier this month. “This has nothing to do with inflation, folks. It has everything to do with the concentration of market power in a relatively few hands.”
NEW: Inflation is being blamed on workers and government spending. The real culprit? Corporate greed.
In our new episode of The Class Room we dug into financial reports to investigate the REAL reason prices are going up.
Hint: corporate profits have never been higher. pic.twitter.com/mPmCeDDNiJ
— More Perfect Union (@MorePerfectUS) November 23, 2021
The Wall Street Journal reported last week that as the coronavirus continues to wreak havoc worldwide, executives of U.S. companies “are seizing a once-in-a-generation opportunity to raise prices to match and in some cases outpace their own higher expenses.”
“Nearly two out of three of the biggest U.S. publicly traded companies have reported fatter profit margins so far this year than they did over the same stretch of 2019, before the Covid-19 outbreak,” the Journal noted. “Nearly 100 of these giants have booked 2021 profit margins—the share of each dollar of sales a company can pocket—that are at least 50% above 2019 levels.”
On Monday, Sen. Elizabeth Warren (D-Mass.) called on the Justice Department to investigate “major poultry companies’ anticompetitive practices that have lined the pockets of executives and shareholders while raising prices for families at the grocery store ahead of Thanksgiving.”
“Lack of competition in the poultry industry is allowing these massive companies to squeeze both American consumers and farmers to fuel record corporate profits and payouts to shareholders,” Warren said in a statement. “When companies have monopoly power as massive suppliers, they can jack up prices of the goods they sell.”
“And when those same companies have complete or substantial market power as large employers or buyers of inputs, also known as monopsony power, they can suppress their own costs for those inputs, including workers’ wages,” she added. “This is the worst of all worlds, where wages are held back while prices are jacked up.”
Faiz Shakir, founder of the advocacy journalism organization More Perfect Union, wrote in the New Republic earlier this week that “corporate America has seized on the fears of inflation to jack up prices on you and make a ton more money.”
“For months, they have, with one hand, fueled talk of inflation as a way to make obscene profits off the backs of consumers. That’s bad enough,” Shakir noted. “But with the other hand, they have been manipulating the talk of inflation to engage in a full-frontal assault on President Biden’s efforts to pass a Build Back Better bill for working families.”
“As we head into Thanksgiving and Christmas, and we all look forward to large enjoyable feasts with friends and family, we should rightly harbor anger about inflation,” Shakir continued. “Not just that they made us pay more for turkey, cranberries, and pie crusts. We’re having to pay more because corporate America made a choice to raise prices on us, and then on top of that, it tried to manipulate your fear about those prices to keep you from getting paid leave, home care, childcare, and climate change action. Corporate America made you pay more while trying to make sure it didn’t have to.”
Republished from Common Dreams (Jake Johnson, staff writer) under Creative Commons (CC BY-NC-ND 3.0).