Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, gave the following statement at a full Committee hybrid hearing entitled, “The Inflation Equation: Corporate Profiteering, Supply Chain Bottlenecks, and COVID-19.”
Today, we will continue the discussion we began with Chair Pro Tempore Powell last week about the economy and the causes of inflation and its impact on families across this country.
Last Friday, we received another strong jobs report, which showed that 678,000 jobs were added to the economy in the month of February. The record setting job creation we saw during the first year of the Biden Administration continues. Indeed, thanks to the American Rescue Plan, signed into law by President Biden, the U.S. has had a stronger economic recovery than any other advanced economy worldwide. Wages and salaries for workers grew by 4.5% in 2021, which is the highest pay increase for workers since 1983. Importantly, these wage increases have been most significant for low-income workers.
We are still in the midst of the COVID-19 pandemic and its effects, including higher prices at the grocery store and higher monthly rents that are taking a toll on household budgets. Today I expect we will hear some of our colleagues attempt to pin inflation on the successful American Rescue Plan—a bill that helped attack this deadly virus and get millions of people vaccinated, supported 6 million small businesses, and helped fuel the economic growth while resulting in the first reduction of federal deficits seen since the Obama Administration.
But this oversimplified narrative has been debunked by experts, including Fed Chair Pro Tempore Powell, who explained at last week’s hearing that supply chain bottlenecks caused by the pandemic are one of the main drivers of inflation. And every American knows, whether they rent or own their home, that housing is also a key driver of inflation. For too long, we have not addressed the shortfall in our housing supply, and this lack of supply is driving up costs. In 2021, the national median rent for an apartment jumped by almost 18% and home prices rose by almost 17%.
Additionally, as giant corporations have grown larger in a wide range of sectors across our economy over the last several decades, they have exercised greater power to set prices. Right now, we are seeing big corporations take advantage of economic conditions and a lack of real competition to pass higher prices on to consumers simply because they can.
Moreover, Russia’s unprovoked invasion of Ukraine and the related strong response the United States and our allies have taken to defend democracy and support Ukraine has already begun to have ramifications on gas and other prices too.
Congress has an important role to play in addressing the complex causes of inflation that are hurting consumers. The Senate can start by confirming President Biden’s highly qualified slate of [Fed] nominees, so that monetary policy decisions are made by public officials who are accountable to us. Congress has already enacted the bipartisan infrastructure bill, which will improve the infrastructure we have, including at our nation’s ports, to help address supply chain challenges. And Congress must finish the work of further bolstering supply chain resilience, supporting domestic manufacturing, reforming the shipping industry, and bringing down housing costs. The House has passed the Build Back Better Act, which addresses labor and housing supply shortages through significant investments in housing and childcare, and also includes investments in supply chain resilience and other sectors. Many economists, including 17 Nobel laureates, have expressed their view [that these investments would help combat inflation] in very significant ways. I look forward to hearing from this panel on how to bring about a robust and stable recovery for all.
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