Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.


People shopping in the egg and dairy case on March 13, 2020 at Whole Foods Merket in Vauxhall, New Jersey. (Photo: Rich Graessle/Icon Sportswire via Getty Images)

Inflation Is Complicated, But the Solution Is Simple

The best thing we can do to offset the pain of inflation is to raise the standard of living for all of us.

Domenica Ghanem


Many Americans are noticing the rising price of goods from sour cream to carburetors as politicians sound the alarm on an inflation crisis.

You may be wondering what single force would cause the cost of a dairy product to go up at the same time as the cost of a car part. The truth is that not all inflation is the same. Each sector has its own issues.

A few conservative lawmakers have used inflation as an excuse not to pass these programs. But they have it exactly backwards.

And none of it is solved by less government funding for our safety net, as some politicians have proposed.

Some of it is what we can call pandemic inflation. Because our economy bounced back quicker after the COVID-19 shutdowns than anyone predicted—thanks largely to investments from the American Rescue Plan—people have more spending money and demand has risen faster than our underinvested supply chain could handle.

This rising demand accounts for price flares in auto manufacturing and lumber, for example. At the same time, you'll notice prices that had plummeted during the shutdowns returning to pre-pandemic levels. Think: plane tickets.

Meanwhile, recent price spikes on other goods that families depend on—like diapers, meat, and dairy—can be linked to corporate greed. Decades of corporations monopolizing industries and cutting out competition has given them the power to artificially inflate the prices of these necessities under the guise of "inflation."

Big business is simply milking this opportunity to claim that they need to raise their prices while they use those profits to engage in stock buybacks—which benefit shareholders and CEOs, not small farmers or the grocers who stock the shelves.

This is hard on consumers as well as small and family-owned businesses who depend on bigger conglomerates like Amazon for supplies and market access. With bigger chains hiking up prices, many smaller businesses are going under.

But the price pressures that hurt families the most are not caused by the pandemic—and in fact have been rising for decades.

By far the biggest ticket items on struggling families' budgets are rent and child care. The housing crisis is so bad that no person earning minimum wage full-time can afford rent in any U.S. state. And the cost of child care costs more than college tuition in 30 states.

The Build Back Better Act being debated in Congress right now would help address our housing supply crisis by building new affordable units with a $150 billion investment. The law would also reduce out of pocket child care costs for families, increase labor participation, and raise the wages of care workers.

More local policies like rent control, which advocates won recently in St. Paul, Minnesota, could also help regulate prices.

A few conservative lawmakers have used inflation as an excuse not to pass these programs. But they have it exactly backwards.

The best thing we can do to offset the pain of inflation—whatever its cause—and for the overall health of our economy, is to raise the standard of living for all of us. That means lowering the poverty rate, raising wages, and reaching full employment.

For too long we've supported an economy that depends on low-paid jobs, dangerous work, and big businesses monopolizing power. That makes all of us suffer. Slowing down our economy to boost profits for corporations won't eliminate the need for families to purchase the products they depend on or fix our supply chain issues.

We need to build a system that supports a healthy economy for everyone, and the Build Back Better Act would be a down payment on a future clean bill of health.

This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License.
Domenica Ghanem

Domenica Ghanem

Domenica Ghanem is a communications assistant at the Institute for Policy Studies.

... We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.

'Utterly Obscene': Just 8 Pfizer and Moderna Investors Became $10 Billion Richer After Omicron Emerged

"Pharma execs and shareholders are making a killing from a crisis they helped to create," said one justice campaigner.

Jon Queally ·

Ilhan Omar Calls Kevin McCarthy 'A Liar and a Coward' for Refusing to Condemn Boebert's Islamophobia

"This is who they are," said the Minnesota Democrat. "And we have to be able to stand up to them. And we have to push them to reckon with the fact their party right now is normalizing anti-Muslim bigotry."

Jon Queally ·

'Congress Must Act': Bernie Sanders Demands End of Filibuster to Codify Abortion Rights

"We must pass legislation that codifies Roe v. Wade as the law of the land in this country. And if there aren't 60 votes to do it, and there are not, we must reform the filibuster to pass it with 50 votes."

Jon Queally ·

Human Rights Defenders Warn Biden Border Policy 'Quickly Transforming Into Trump 2.0'

Like his predecessor, President Joe Biden now being accused of "using racist, xenophobic tropes about immigrants to weaponize Covid-19 against migrants and asylum-seekers."

Jon Queally ·

'Bombshell': Israeli Spyware Used to Hack iPhones of US State Department Officials

Calling the Israel-based spyware maker NSO Group an "in-plain-sight national security threat," one expert warned that "a multi-agency investigation is immediately needed."

Jessica Corbett ·

Support our work.

We are independent, non-profit, advertising-free and 100% reader supported.

Subscribe to our newsletter.

Quality journalism. Progressive values.
Direct to your inbox.

Subscribe to our Newsletter.

Common Dreams, Inc. Founded 1997. Registered 501(c3) Non-Profit | Privacy Policy
Common Dreams Logo