What’s Up With Inflation, and What Does It Mean for People of Color?

EDITOR’S NOTE: “Hear Us” is a column series that features experts of color and their insights on issues related to the economy and racial justice. Follow us here and at #HearUs4Justice.

Solana Rice of Liberation in a Generation recently sat down with Mike Mitchell, the director of policy and research at the Groundwork Collaborative, to get the 411 on inflation and what it means for people of color. This op-ed is an edited transcript of that conversation.

SOLANA: I feel like there’s a lot of talk about inflation, but there isn’t a clear, basic definition. What is it, and why does it matter?

MIKE: It’s interesting how much of the conversation around inflation kind of looms as a specter, but we don’t actually talk about what it is, how it’s measured, or how it impacts different folks, right? When we’re talking about inflation, what we’re really talking about is how much things cost and how that cost changes over time.

It seems simple, but there are a lot of different measures for inflation. The most popular measure, and the one that you probably hear about the most, is the consumer price index (CPI). Let’s say you go to the grocery store: you put a few items in your cart, then you go to the register and pay for those items. And then next month, you fill up your cart with the same items, but maybe this time it costs a different amount. And that change is what we think of as inflation; the price of goods going up or going down.

There’s a lot underlying that price change, and the proverbial “basket of goods” [that you purchase] goes far beyond the grocery store. Think about when you fill up your gas tank, when you pay for the energy that heats your home, or all of the little things you buy for yourself, for your work, and for your family. All of that stuff fits into that metaphoric basket, and that shift over time is what we’re measuring.

SOLANA: Obviously this matters for everyone, but it’s particularly important for people of color in an economy that structurally disadvantages us. Correct me if I’m wrong, but employers don’t raise our wages when inflation goes up, so we really feel it at the cash register.

MIKE: You’re totally right. Unless you’re lucky enough to have a job that provides a cost-of-living adjustment at the end of the year that might help you cover some of the changing costs. But for a lot of folks — poor, low- or even middle-income, elderly, and so on — inflation means that they’ve got to find ways to make ends meet, and that’s really difficult for most.

And for a lot of Black and Brown folks, the impact of inflation is felt much more acutely than it is for the very privileged and powerful.

At Groundwork, we’re focused on the ways in which corporations are driving recent inflation spikes. They play a big and pernicious role when it comes to price shifts.

We’re hearing a lot about supply chains as if they are a force of nature. But supply chains are designed by humans, and, in large part, they’re held and managed by private companies. Corporations have, yet again, decided to prioritize profits over people and are building supply chains in irresponsible ways.

Lo and behold, we’re in a pandemic, and demand is strong — our government has stepped up to provide support in a very important way — but corporations’ decades-long control over the economy has rendered all of us powerless, people of color in particular. Simply put, corporations have undermined supply chains and have amassed huge amounts of economic and political power, such that they can take advantage of the pandemic and dictate prices. And they’re openly admitting — and bragging about — it.

SOLANA: So we’re completely at the whim of corporate power. But corporations aren’t the only deciders when it comes to costs, right? That is — or should be — more democratic, so what can people of color expect from our elected officials?

MIKE: Government can do much more to reset the terms of our economy. They can look at what corporations are doing, and they can decide whether or not profiteering is happening at this moment. Amid a public health emergency, N95 masks are crucially important to keep people safe, health care workers in particular. The government can actually hold corporations accountable, scrutinizing prices and deciding if they’re excessive.

More broadly, we can also look at breaking up some of these super-large corporations, so that in any given sector we don’t have one or two major companies that can dictate those markets entirely. Take meatpacking, for example. There’s no reason why the government can’t say: It’s probably in our best interests as a nation, and better for farmers, consumers, and competition at large, to have a number of smaller meatpacking companies versus these mega corporations manufacturing scarcity and setting prices.

Another avenue that governments can and should employ is taxation. Corporations are reaping record profits — and larger profit margins. We could tax excessive profits to ensure that CEOs and shareholders also pay their fair share.

Build Back Better contains a number of tax increases and spending reductions that would temper inflationary pressures. And the proposed huge investments in childcare, for example, would help women of color in particular. So it’s on Congress to make policy choices that will either serve the public that elected them, or serve the private interests that influence their votes.

SOLANA: We let corporations extract and hoard a lot of wealth, but then scarcity is used as a racist lie to withhold public investment. Fear-mongering about government spending is relentless, and I think we want to drive home another constant — that people of color need and deserve these kinds of investments.

If we’re always blaming inflation on government spending, but we’re not talking about corporate greed, how does that really hurt Black and Brown folks? And what can we do?

MIKE: If we don’t talk about corporate greed, we’re left with these status quo narratives that exacerbate and entrench economic oppression. We see individual people (of color) and government as the problem, and then ignore the structural solutions that would rein in corporations. If we seek to generate policies that respond to our unequal economy, then we must name and address the true drivers of that inequality. In this case and in many others, it’s corporate leaders and their greed. You don’t have to take my word for it; just listen to the CEOs themselves.