Cost of raw materials for goods goes up due to [insert reason here]
Manufacturers increase cost to compensate, passing the higher cost onto their customer
That customer sells their manufactured goods to retailers, contractors, or whatever is their vehicle of sale at an increased cost also to cover **their** increased cost of manufacture
Customers eat this increase as inflation.
Lots of other bullshittery happens to generate inflation, but the raw material portion is a key driver in today’s extreme inflation problem.
My wife’s uncle is the CEO of a small (1m revenue per quarter?) firm that sells cameras and equipment. During the holidays he had a few extra drinks and drunkenly bragged how he was able to raise his prices several percentage points (due to “inflation”) while keeping costs the same. It was like being in that meme where all the old white guys are laughing with each other, except I was standing there with a look of astonishment at what I was hearing.
I understand my anecdote is not evidence, I also understand there are real factors driving up prices of some goods, however that doesn’t change the fact that greedy assholes are piling on to make themselves rich.
*Cough cough* Etsy. After 2 years of record breaking profits they’re raising fees on sellers by 30%. Fuck Josh Silverman. Again. Literally taking money out of small business’ pockets to line his own.
It’s actually more complicated, and unfortunately more insidious in some ways than this.
Back when the pandemic started investors realized what was coming: huge government healthcare programs followed by huge government economic programs. They were the right thing to do, they were basically the only thing to do, but it meant that most governments would need to print more money to make it happen, and when any government prints a lot of money it means inflation, but when nearly every government is doing it, it guarantees a big boost in inflation. As such, owning currencies became a poor investment, and owning assets became the best move going forwards.
So despite the fact that the world’s economy was in unquestionable decline, stock prices hit all-time highs. In order to justify those prices, though, companies needed to make insane profits. Just look at the story about Meta losing half its value because it underperformed.
So now everyone’s prices are going up not just because supply line issues are causing disruptions in the “Just In Time” business models that have dominated since the 80’s, but also because companies need to make up for any kind of shortages or increases AND then grow faster than they’ve ever grown before to appease their shareholders.
Prices are up (a lot) because of Covid related supply chain issues. You pay more for raw materials, you raise sell prices so you don’t go broke. You the customer are not paying arbitrary profit increases. You the customer are paying for terrible leadership around the world when they collectively failed in pandemic response. When all the businesses shut down and stopped producing, this is the wave after that stated mid last summer and is still happening. It’s part shortages and crazy high priced. Steel costs 3x to 4x what it used to. One square foot of steel that used to cost $4 now costs $20. Sell prices go up to cover that cost increase.
What about timing?
Well fall and winter is when yearly budgeting and pricing is set. Welcome to you new prices after businesses adjusted their price structure to offset those crazy costs.
If anyone thinks that companies are not getting slammed with increased costs then they have their head in the sand. I can tell you not only are our materials increasing dramatically in cost, but in order to attract and retain employees we are paying more than we ever have (which is a good thing). When this happens every step along a manufacturing process, you better believe that goods are going to cost more.
For example, (since I work in the aluminum industry), last march the price of aluminum per pound was $1.18291. Yesterday morning when I opened my report it had hit $1.92129 per pound. Our wages have also risen almost 30% over the last 2 years. These aren’t our only costs.
Yes, everyone sees through it but it’s being done anyway because the government has been completely captured by financial interests and there is no cop on the block to stop it. Thomas Jefferson warned us about this, the Roosevelts actually did something about it in the turn of the 20th century, and yet again we are back in the same place of existential crisis threatening not only the American working class, but the entire human race and most species around world. All for greed.
I saw an internal memo once that said “Although we do not incur higher shipping or distribution expenses in Canada, we can charge Canadians higher prices because they expect it.”
Jon Stewart talked about this in his recent podcast with a doctoral candidate and I think Columbia maybe it was some other college but they basically pointed this out.
There is inflation but there’s also record profits
This is exactly what I don’t get: prices going up in response to inflation is supposed to be a reaction to increased wages, in order for companies to maintain a bottom line. It’s also not like inflation has been driving up credit limits or ease of access to loans, which could potentially increase demand (which would then justify an increase in prices).
If prices go up without an increase in wages or access to credit… it’s just prices going up.
No they’ll just blame Biden because fox news said so and they’re to dumb, lazy, indoctrinated to just say “prove it” or do their own research. I mean for fuqs sake they said they could do their own research on covid and were wildly wrong but at least there was an attempt.
Wtf our company is literally doing this shit now. They just sent an email out for talk tracks that support teams should use when dealing with disgruntled customers asking about why their renewal/subscription rates are increasing.
This is the 2nd time they’ve done this to existing, active subscribers in 3 years and we always get hit with the backlash from pissed off customers. Except our team gets smaller and more understaffed than before and, any help is outsourced to cheaper countries, and our wages don’t go up at all.
So yeah, the assholes at the top are just raking in the profits.
For any high prices I see by a company or store, I boycott it generally. Then look for the lower one elsewhere a bit more locally. You can get local food a bit cheaper too if you look for farmers markets. Not a bad idea to learn to grow some, too.
Literally what’s happening at the retailer I work at. The CEO visited our location last month in a limo with a butler… to visit his minimum wage employees who can’t afford to shop at the store they work for. And then they raise prices.
I work for a small privately owned used car lot and we are victims of this. We go around to auctions buying cars and over the last year and a half prices have more than doubled on the cars we buy. We have seen no change in profit, but we are paying more up front. People accuse us of inflating, but we are at the mercy of market, yet no one believes us…
I am all for conspiracies but I set the prices at the company I work for and the COG has skyrocketed over the past 2 years. I have had to do 2 separate 10% increases on the retail level over the past 2 years and even with that our margins are waaaaay down.
[deleted]
Actually “They never have before!”
Don’t piss on me and tell me it’s ~~raining~~ trickle down.
*So that’s what things would be like if someone invented a satiric comic. A man can dream though. A man can dream…*
Cost of raw materials for goods goes up due to [insert reason here]
Manufacturers increase cost to compensate, passing the higher cost onto their customer
That customer sells their manufactured goods to retailers, contractors, or whatever is their vehicle of sale at an increased cost also to cover **their** increased cost of manufacture
Customers eat this increase as inflation.
Lots of other bullshittery happens to generate inflation, but the raw material portion is a key driver in today’s extreme inflation problem.
The author does not understand economics
My wife’s uncle is the CEO of a small (1m revenue per quarter?) firm that sells cameras and equipment. During the holidays he had a few extra drinks and drunkenly bragged how he was able to raise his prices several percentage points (due to “inflation”) while keeping costs the same. It was like being in that meme where all the old white guys are laughing with each other, except I was standing there with a look of astonishment at what I was hearing.
I understand my anecdote is not evidence, I also understand there are real factors driving up prices of some goods, however that doesn’t change the fact that greedy assholes are piling on to make themselves rich.
Economic illiteracy is ubiquitous.
Needs a follow-up where they complain about yacht prices these days
Inflation exists dumbass
Ignorant and, quite frankly, unfunny.
*Cough cough* Etsy. After 2 years of record breaking profits they’re raising fees on sellers by 30%. Fuck Josh Silverman. Again. Literally taking money out of small business’ pockets to line his own.
It’s actually more complicated, and unfortunately more insidious in some ways than this.
Back when the pandemic started investors realized what was coming: huge government healthcare programs followed by huge government economic programs. They were the right thing to do, they were basically the only thing to do, but it meant that most governments would need to print more money to make it happen, and when any government prints a lot of money it means inflation, but when nearly every government is doing it, it guarantees a big boost in inflation. As such, owning currencies became a poor investment, and owning assets became the best move going forwards.
So despite the fact that the world’s economy was in unquestionable decline, stock prices hit all-time highs. In order to justify those prices, though, companies needed to make insane profits. Just look at the story about Meta losing half its value because it underperformed.
So now everyone’s prices are going up not just because supply line issues are causing disruptions in the “Just In Time” business models that have dominated since the 80’s, but also because companies need to make up for any kind of shortages or increases AND then grow faster than they’ve ever grown before to appease their shareholders.
Tell me you don’t understand economics without telling me you don’t understand economics.
Inflation is real, dumbass
Holy fucking shit, you guys (incluing OP) don’t know the first fucking thing about economics.
You sound just as clueless as anti-maskers are about COVID.
Read a fucking book, you philistines.
I feel like nobody in the comments understands supply and demand
Say you don’t know anything about economics, without actually saying it.
[deleted]
The assumption doesn’t match the reality.
Prices are up (a lot) because of Covid related supply chain issues. You pay more for raw materials, you raise sell prices so you don’t go broke. You the customer are not paying arbitrary profit increases. You the customer are paying for terrible leadership around the world when they collectively failed in pandemic response. When all the businesses shut down and stopped producing, this is the wave after that stated mid last summer and is still happening. It’s part shortages and crazy high priced. Steel costs 3x to 4x what it used to. One square foot of steel that used to cost $4 now costs $20. Sell prices go up to cover that cost increase.
What about timing?
Well fall and winter is when yearly budgeting and pricing is set. Welcome to you new prices after businesses adjusted their price structure to offset those crazy costs.
Even the White House economists are pushing back against Elizabeth Warren and her tirades about the evil corporate price gougers causing inflation.
https://www.washingtonpost.com/us-policy/2022/02/17/white-house-inflation-corporations/
Five days ago
If anyone thinks that companies are not getting slammed with increased costs then they have their head in the sand. I can tell you not only are our materials increasing dramatically in cost, but in order to attract and retain employees we are paying more than we ever have (which is a good thing). When this happens every step along a manufacturing process, you better believe that goods are going to cost more.
For example, (since I work in the aluminum industry), last march the price of aluminum per pound was $1.18291. Yesterday morning when I opened my report it had hit $1.92129 per pound. Our wages have also risen almost 30% over the last 2 years. These aren’t our only costs.
This is not a fallacy, this is reality.
Guess I shouldn’t be surprised that r/funny knows literally nothing about economics and finance
Yes, everyone sees through it but it’s being done anyway because the government has been completely captured by financial interests and there is no cop on the block to stop it. Thomas Jefferson warned us about this, the Roosevelts actually did something about it in the turn of the 20th century, and yet again we are back in the same place of existential crisis threatening not only the American working class, but the entire human race and most species around world. All for greed.
https://en.wikipedia.org/wiki/Regulatory_capture
Excuse my ignorance but isn’t that exactly what inflation is?
If prices rise and demand stays the same, inflation occurs.
I saw an internal memo once that said “Although we do not incur higher shipping or distribution expenses in Canada, we can charge Canadians higher prices because they expect it.”
Jon Stewart talked about this in his recent podcast with a doctoral candidate and I think Columbia maybe it was some other college but they basically pointed this out.
There is inflation but there’s also record profits
Do people really think this is how the world works?
AND they’ll open the stores later and say people don’t wanna work when they just don’t wanna pay a liveable wage.
This is exactly what I don’t get: prices going up in response to inflation is supposed to be a reaction to increased wages, in order for companies to maintain a bottom line. It’s also not like inflation has been driving up credit limits or ease of access to loans, which could potentially increase demand (which would then justify an increase in prices).
If prices go up without an increase in wages or access to credit… it’s just prices going up.
This is literally what the landlord organizations believe and discuss.
https://www.youtube.com/watch?v=PzQ6C8FC4zs
Pfft… What’re they gonna do? Shop at one of our two competitors who are doing the exact same thing, and I know because we all talked?
Games Workshop would like to know you’re location.
One company really comes to mind… “Games Workshop”
No they’ll just blame Biden because fox news said so and they’re to dumb, lazy, indoctrinated to just say “prove it” or do their own research. I mean for fuqs sake they said they could do their own research on covid and were wildly wrong but at least there was an attempt.
Wtf our company is literally doing this shit now. They just sent an email out for talk tracks that support teams should use when dealing with disgruntled customers asking about why their renewal/subscription rates are increasing.
This is the 2nd time they’ve done this to existing, active subscribers in 3 years and we always get hit with the backlash from pissed off customers. Except our team gets smaller and more understaffed than before and, any help is outsourced to cheaper countries, and our wages don’t go up at all.
So yeah, the assholes at the top are just raking in the profits.
If people perceive an inflationary period, then inflation does in fact occur.
For any high prices I see by a company or store, I boycott it generally. Then look for the lower one elsewhere a bit more locally. You can get local food a bit cheaper too if you look for farmers markets. Not a bad idea to learn to grow some, too.
Ooooh, lots of corporate shill shit heads in these comments.
Literally what’s happening at the retailer I work at. The CEO visited our location last month in a limo with a butler… to visit his minimum wage employees who can’t afford to shop at the store they work for. And then they raise prices.
Holy shit the bots are out in force on this one.
I witnessed this exact conversation at work. “Inflation is at 10% so we can raise prices 15% and no one will bat an eye.”
I work for a small privately owned used car lot and we are victims of this. We go around to auctions buying cars and over the last year and a half prices have more than doubled on the cars we buy. We have seen no change in profit, but we are paying more up front. People accuse us of inflating, but we are at the mercy of market, yet no one believes us…
and that’s why i steal.
I work for a large company worth around $24 billion. This is exactly what they’re doing. But me, I get a 1.2% raise.
I am all for conspiracies but I set the prices at the company I work for and the COG has skyrocketed over the past 2 years. I have had to do 2 separate 10% increases on the retail level over the past 2 years and even with that our margins are waaaaay down.
People are dumb!
Input costs rise so prices rise to maintain margins
If you can sell it for more, and nobody noticed, you’re pricing is wrong to begin with.
Less money to do other things. Society as a whole suffers. These fuck heads are just building their castle walls higher. It’s absolutely disgusting.