Rising prices making life hard for consumers

American social policy advocate Robert Reich has become a modern-day troll for big business and multinational companies he has deemed exploitative and greatly responsible for much of the inflationary conditions being reflected in consumer pricing complaints.

The Russian invasion of Ukraine, the conflict between Israel and Hamas that has engulfed Palestine, and the disruptive remnants of the COVID-19 pandemic, have all been blamed for rapid rises in inflation.  Average consumers from the United States of America to here in the Caribbean are angered and politicians are the targets of their ire.

Reich, author of the book, The System: Who Rigged It, How To Fix It,  served as Secretary of Labour in the Bill Clinton administration in the US, and who has been a social media consumer education programme stalwart, hits out at the role corporate greed is playing in skyrocketing consumer prices.

While he accepts that geopolitical developments and disruptions to production schedules have played a role in causing prices to rise, he is convinced that big corporations are squeezing every ounce of profit from consumers who are hurting from reduced disposable incomes.

In an Instagram post to his more than one million followers, Reich outlined that mega retailer Walmart recorded an increase in profits of US$15 billion in 2023. However, he disclosed that Walmart neither lowered prices nor substantially increased wages to its staff.

Reich said inflation was dropping but prices were not coming down. His explanation for this situation was the corporations with enough monopoly power were keeping prices high.

In 2021, PepsiCo, which makes all sorts of drinks and snacks, announced it was forced to raise prices due to ‘higher costs’. Reich was not convinced: “Forced? Really? The company reported US$11 billion in profit that year. In 2023 PepsiCo’s chief financial officer said that even though inflation was dropping, its prices would not. Pepsi hiked its prices by double digits and announced plans to keep them high in 2024,” he told his followers.

In Barbados, which has always been viewed as an expensive place to live, people are paying some of the highest prices in the region for petrol, electricity rates have gone up, so too have communications prices and these have all had a ripple effect on what people can purchase with their incomes.

Frankly, too many low, and middle-income Barbadians are complaining that they are “scratching” at the supermarket hoping not to be embarrassed at the cash register.

Government too has recognised that it has a serious problem on its hands as people are becoming more disgruntled about their inability to afford basic items and still save for emergencies.

It was an instructive request of Minister of Foreign Affairs and Foreign Trade Kerrie Symmonds, who is Senior Minister with responsibility for the Productive Sectors, to urge retailers to “act responsibly in their pricing strategies”.

In other words, he is telling retailers and those along the value chain they cannot expect the same level of profits they achieved previously in the current environment.

While we laud Minister Symmonds, government too must concede that its taxing policy is also a contributing factor to the cost of energy by way of petrol prices that have remained at over $4 per litre for an extended period even when global oil prices had fallen. Another example is the 22 per cent tax rate on domestic telecommunication services, which is exceptionally higher than the national 17.5 per cent rate.

As president of the Barbados Chamber of Commerce & Industry James Clarke stated when VAT and duty is calculated on the freight, that then carries up the price.

Clarke has asked that consumers consider the add-ons such as duty, VAT, transportation costs and local transportation which help to dictate the price before it was merchandised on a supermarket shelf.

Our general concern is that government and the private sector may be trying to get more out of the Barbadian consumer than consumers can possibly give.