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Yes, data indicates over half of price increases go to profits for large companies in services like food, furniture and cars

Although corporate greed may be assumed by some to play a role, Mike Konczal said it’s difficult to identify a cause.

PHOENIX — A dramatic presentation Wednesday in Congress alleged corporate profits are to blame more than anything else for inflation in key industries across the country.

The claim was made during one of California Congresswoman Katie Porter’s (D) famous whiteboard demonstrations. 

12News verified whether the claim is accurate.


On average, 11.4% of inflationary price increases became corporate profits from 1979 to 2019. Since the 2020 pandemic, that number has jumped up to 53.9%.

Our Sources:

Dennis Hoffman, Director of the L. William Seidman Research Institute at the W.P. Carey School of Business at Arizona State University

The Economic Policy Institute

Roosevelt Institute

U.S. Treasury Secretary Janet Yellen


During a congressional hearing Wednesday, Rep.Porter questioned Mike Konczal, director of Macroeconomic Analysis at the Roosevelt Institute, a progressive economic think tank.

Porter held a chart with statistics from the Economic Policy Institute and asked: 

“According to this chart, what is the biggest driver of inflation during this pandemic…  during this recent period?”

“It would be corporate profits,” Konczal said.

“And what is that percentage?” Porter asked.

“It is 54% and that number does stay that high if you update that to more recent numbers as well,” Konczal said.

Over half of the increased prices people are paying are contributing to an increase in corporate profits, Porter concluded.

The nonprofit Economic Policy Institute calculated corporate balance sheets and other federal data to come up with its numbers. The Roosevelt Institute conducted its own analysis, concluding similar results.

“We have very good measures of how prices are increasing and how they are being recorded,” Konczal told 12News Thursday. “I think the more evidence we look at the more that case grows stronger.”

The industries analyzed include large corporations and chains involved in non-service industries like furniture, cars and groceries, Konczal said.

Although corporate greed may be assumed by some to play a role, Konczal said it’s difficult to identify a cause.

“There’s not a direct causation per se, but it’s a beginning of an indictment of the role of corporations in profit-seeking exacerbating the inflation we are seeing,” Konczal said.

ASU economist Dennis Hoffman said it’s likely no coincidence Porter is making her presentation during election season.

“In the back of my mind. I understand this. She’s trying to deflect blame from a president,” Hoffman said.

However, Hoffman said he has no reason to dispute the numbers from the two economic think tanks.

“I’d have to spend a few days digging through their data. There are smart people working on that problem and if they’re coming out with shoddy data, they would be wary there are skeptics that are going to tear it apart,” Hoffman said.

Not everyone agrees that corporate profits are a major source of inflation.

According to a June report by ABC News, U.S. Treasury Secretary Janet Yellen expressed a view that minimizes the role of corporate profits as a cause.


Unless new data is presented to dispute The Economic Policy Institute and the Roosevelt Institute, there are reliable indications that a large portion of price increases are going to profits for large corporations in services like groceries, furniture and cars.

Evidence to support Porter’s claim

Konczal said his organization is gathering evidence showing large firms that had higher markups before the pandemic continued to have higher markups during the pandemic, and firms saw increasing margins when they reopened.

“It’s a beginning of an indictment of the role of corporations in exacerbating the high levels of inflation we’re seeing,” Konczal said.

Konczal argues more corporate competition and anti-trust policies would drive inflation down.

Both Konczal and Hoffman acknowledge there are many reasons for inflation.

“There’s lots of blame to go around,” Hoffman said.

Other factors for inflation

Inflation occurs when there is too much money chasing too few goods, Hoffman said.

Hoffman points to major factors like easy credit, stimulus checks, changes in consumer behavior, supply chain disruption, and a failed immigration policy that does not allow more immigrants to work legally.

Hoffman adds the federal reserve needs to decrease demand dramatically to continue fighting inflation, and they are doing just that. The housing market is cooling, which is the goal. But it’s a slow process.

“The data still shows there’s still a ton of money on the balance sheets for a lot of individuals,” Hoffman said. “All of us have a lot of cash which is going to fuel inflation going forward, which means this problem that I wish would go away with supplying chains opening up isn’t happening yet.”

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