Voters See Maximized Corporate Profits as a Primary Driver of Inflation

Americans’ work priorities continue to shift more than three years into the COVID-19 pandemic. Workers now face high inflation and a barrage of negative headlines around the economy, while employers struggle to strike a balance between in-office and remote work. Download Morning Consult’s 2023 State of Workers report here.

As earnings season rolls along and consumers continue to expect rising prices, a new Morning Consult survey finds that 2 in 3 voters believe that corporate profits are up in recent years, while more than a third think corporations’ push to maximize profits has played a role in inflation. 

As United States heads into a post-pandemic economy, fewer voters blame supply chain snarls 

• Among all voters, 35% believe that companies’ attempts to maximize profits are contributing the most to inflation, a rise of 3 percentage points from a June 2022 survey.
• Fewer voters perceive rising prices to be caused by supply-chain hiccups, which gummed up the supply of goods in the months following the onset of the COVID-19 pandemic. The share of voters who thought supply chains were responsible for rising prices was 22% in the new survey, down from 32% in June 2022. 
• Amid news of unionization pushes and demands for higher wages, voters increasingly think labor costs are to blame for inflation — 17% now compared with 11% in June 2022 — though many economists disagree that wages are driving up prices.
• Democrats (48%) were twice as likely as Republicans (24%) to say that corporate profit-seeking has contributed to inflation, while almost a third of independents (32%) said the same. 

Almost 2 in 3 voters say corporations have enjoyed several years of profitability

• A majority of voters say they believe corporations have seen increased profits over the past three years, including 34% who think profits have increased “a lot” and 29% who said profits have increased “some.”
• Just 3% of voters said they believe profits have decreased “a lot,” while 9% said profits have decreased “some.” 
• A majority of voters across party lines see corporations as having been profitable, including 70% of Democrats, 63% of independents and 57% of Republicans.

Signs of an economic slowdown begin to emerge, but prices for necessities still putting the hurt on voters’ wallets

After the pandemic-related supply shocks led to rising prices for many goods and materials, some commentators and consumer advocates questioned if companies resisted lowering prices once constraints eased. Overall inflation slowed slightly in March to a rate of 5%, down just a point from February’s 6%, but digging into the components of the consumer price index, necessities like food (up 8.5% from a year earlier) and rent (up 8.3%) were still rising sharply last month. 

While many voters see profit maximization as a driver of inflation, some policymakers agree: Then-Federal Reserve Vice Chair Lael Brainard noted in a January speech that some sectors have seen a “price-price spiral,” where retail markups exceed the increase in business costs. “The compression of these markups as supply constraints ease, inventories rise, and demand cools could contribute to disinflationary pressures,” she said. 

That profit margin squeeze may be well on its way: UPS, which is said to be responsible for transporting 6% of the United States’ gross domestic product each day, is forecasting an economic slowdown in 2023, noting in its recent earnings report that March shipping volumes were lower than expected as retail sales fell. 

The April 12-14, 2023, survey was conducted among a representative sample of 1,940 registered voters, with an unweighted margin of error of plus or minus 2 percentage points.