In her first economic policy speech last month in Raleigh, North Carolina, Vice President Kamala Harris announced plans to implement a federal ban on price gouging to tackle the rising costs of everyday goods and groceries. While the plan aims to regulate businesses and protect consumers, it has sparked a range of opinions nationwide, resulting in mixed opinions from some voters.
Price gouging refers to the practice of charging excessively high prices for goods or services, particularly when demand is strong and supplies are scarce, often after natural disasters or crises.
While Harris’ plan targets what she describes as sky-high prices and unfair corporate practices, some voters have questioned its potential effectiveness. Some have argued that the plan could inadvertently harm the food industry and consumers, raising concerns about unintended consequences.
Alexander Henke, an economics professor at Howard University, said, “Harris’ plan is vague, leaving room for different interpretations.”
He emphasized that the proposal appears to be more like a political economy move than an economic one, tapping into the popular sentiment against price gouging by utilizing poll-tested messaging.
Since the start of the COVID-19 pandemic, food prices have increased by approximately 25 percent. While grocery prices are still higher than before the pandemic, they have stabilized over the past year, increasing by only 1.1 percent, which is similar to typical pre-pandemic price changes, according to federal data.
Economists suggest that prices for most goods generally do not drop significantly outside of major recessions. Instead, they expect wages to rise gradually to help Americans adapt to these higher costs. Overall prices remain elevated compared to a few years ago, according to the White House.
Harris’ plan will include “the first-ever federal ban on price gouging on food and groceries—setting clear rules of the road to make clear that big corporations can’t unfairly exploit consumers to run up excessive corporate profits on food and groceries,” the campaign said in a statement.
According to statistics from Data for Progress, swing voters in the upcoming election have expressed concern about economic issues, with “the economy, jobs, and inflation” being their main worry.
This worry is heightened among swing voters, as many are especially anxious about inflation and the increasing prices of essential goods like food and groceries, as the report further explained.
Gaminie Meepagala, an economics professor at Howard, expressed that despite inflation being around five to six percent, many companies have raised prices more significantly.
“This is partly due to rising wages, especially from higher minimum wage mandates, but some companies may be using these wage increases as a reason to raise prices more than necessary,” Meepagala said.
Andria Smythe, a professor in Howard’s economics department has also shared her thoughts on the price gouging laws, stating that while they aim to protect consumers, extending the laws to regular economic conditions would result in some complex effects. She said this worries economists, due to the fact that regulations could lead to reduced supply and unintended shortages.
“There are other options beyond just implementing a price gouging law. A combination of measures could be more effective,” she said. “For example, targeting subsidies at farmers or food producers might help reduce the cost burden passed on to consumers.”
If Harris wins November’s election the ban could come into effect within the first 100 days of her being in office. Any companies that break the new limits on price gouging would face “harsh penalties” from the Federal Trade Commission.
Copy edited by Camiryn Stepteau
