Flanked by Marcia Kasieta, left, and U.S. Rep. Mark Pocan, right, FTC chair Lina Khan describes her agency's work in a conversation with reporters Thursday. (Erik Gunn | Wisconsin Examiner)

As consumers continue to face higher prices for groceries and other goods, the Federal Trade Commission is looking at whether some of those price hikes are driven by profiteering.

The agency is “using all of our tools to make sure that no American is paying more because of illegal business practices, be it at the grocery store, be it at the pump, be it at the pharmacy, on food and groceries in particular,” FTC Chair Lina Khan told reporters Thursday during a visit to Wisconsin.

Khan was in the Badger State for stops that included a round table discussion about a recent nursing home sale and a chat with reporters at the Madison office of Democratic Rep. Mark Pocan.

That conversation included a quick rundown of issues at the forefront of the FTC’s agenda. The agency enforces federal antitrust and consumer protection laws, “which are really about making sure that our markets are fair and honest and competitive, so that people can get a fair shake,” Khan said.

State price-gouging laws are intended to address momentary surges in the price of goods that take advantage of circumstances such as natural disasters. But the FTC focuses on “a broader set of corporate practices that we think may be unlawfully hiking up prices,” Khan said. 

Marcia Kasieta, business director of the Badger Prairie Needs Network, a nonprofit serving Dane County, said that the group’s food pantry has been pinched by soaring demand and soaring costs.

“This year my pantry is providing food assistance to 7,000 individuals a month,” Kasieta said — up from 2,200 a month just two years ago.

“Our purchasing budget has more than doubled in the last two years,” she said. “At today’s prices, with demand for food assistance continuing to climb, our budget next year will be eight times more than it was before the pandemic, and three times more than just two years ago.”

Khan said the FTC is looking at inflation in consumer prices from several angles.

One example is price discrimination. “Sometimes we hear from independent grocers they’re not able to get the same terms as the big retailers,” Khan said.

Some small retailers have reported that the prices wholesalers are charging them for an item exceeds the shelf price at a big chain store. “So, there seems to be potentially some discrimination going on there, maybe in unlawful ways,” she said.

The FTC has also opened a market inquiry to look at reports of “surveillance pricing — when companies may be able to charge each person a different price based on what they know about you,” she said.

For example, she suggested the possibility that based on consumer data that retailers collect from shoppers, a family whose child has a peanut allergy could be charged a higher price for a nut-free granola bar.

The FTC has ordered eight companies to submit information about their use of consumers’ personal information in setting prices. 

Business consolidation is another trend leading to higher prices, Khan said — whether by directly limiting competition, or by secretly and illegally colluding so that supposedly competing firms don’t undercut each other’s prices.

“We’ve seen some really serious allegations around this in housing, where some lawsuits have been brought, noting that different landlords have all been using the same algorithm to set their rents and they may effectively be engaging in price fixing,” Khan said.

In the food and agriculture sector, “more and more markets are controlled by fewer and fewer players,” she said. “We hear from a lot of farmers that they’ve seen their incomes go down even as consumers are paying more. That would suggest that it’s the entities in the middle that are taking a bigger and bigger cut.”

While prices spiked in the pandemic as supply chains were disrupted, prices have not come down on some products even as the costs to produce them have fallen again, Khan said. “So there’s a question — is it that the companies have the ability to keep prices inflated because there isn’t enough competition in the market?”

Because of concern it would reduce competition, the FTC is challenging the pending merger of supermarket giants Kroger and Albertson’s in federal court.

Khan said she couldn’t comment on details of the case because it remains in litigation, but Pocan observed Kroger and three other supermarket giants “control 70% of the grocery market in the United States.

It’s the FTC’s aim, Khan said, “to make sure that markets are not becoming further consolidated through mergers and acquisitions in ways that will further deprive people of choices that would result in lower prices.”

Before visiting Pocan’s office, Khan was in Baraboo Thursday morning for a community discussion about the recent sale of a county-owned nursing home to a for-profit company. The session was organized by a community group opposed to the sale.

Khan told reporters that while the transaction was in the purview of the Wisconsin Department of Health Services, which is reviewing the matter, and not the FTC, it raises issues about private equity that are on the FTC’s agenda.

“We are more generally concerned about the growing role of private equity, in particular, in parts of health care [and] nursing homes,” Khan said. “There has been some troubling research showing that mortality rates have actually increased after nursing homes have been bought by private equity.”

Dockworkers demonstrate Tuesday, Oct. 1, 2024, at Maher Terminals in Elizabeth, New Jersey. Members of the International Longshoremen’s Association went on strike from Texas to Maine after the union failed to reach a new contract agreement with the United States Maritime Alliance over wages and automation. Tens of thousands of workers on strike could snarl supply chains, just a month ahead of the U.S. presidential election. (Photo by Mark J. Bonamo for New Jersey Monitor/States Newsroom)

ELIZABETH, N.J. — Tens of thousands of dockworkers went on strike from Texas to Maine on Tuesday to demand higher wages and a ban on all automation at ports in a move that could snarl supply chains only a month ahead of the presidential election.

The International Longshoremen’s Association union and the United States Maritime Alliance, which represents employers in the longshore industry, were unable to reach a new contract agreement. This is the union’s first strike since 1977, when dockworkers stopped work for several weeks.

More than 500 union members gathered at the gates of Maher Terminals in Elizabeth, New Jersey early Tuesday for the start of the strike. Harold Daggett, International President of the ILA, rallied the crowd as he spoke at one of the main container terminal operators at Port Newark–Elizabeth Marine Terminal, an important facility for goods entering the New York Metropolitan area.

“These greedy corporations, everything they got, they got from us. We’re the ones who worked through the pandemic to make them the money they got,” Daggett said in an interview.

When asked how long the strike would last, Daggett said that union members will stay on strike “until the end.”

On Monday, the ILA said employers were price-gouging customers by charging much more for containers, which would lead to higher prices for consumers. It stated that the wages offered by USMX were still too low to accept.

“The Ocean Carriers represented by USMX want to enjoy rich billion-dollar profits that they are making in 2024, while they offer ILA Longshore Workers an unacceptable wage package that we reject,” the union said in a statement.  “ILA longshore workers deserve to be compensated for the important work they do keeping American commerce moving and growing.”

Scott Weiss, a member of ILA Local 1804-1, inspects containers that come off of ships entering at Port Newark–Elizabeth Marine Terminal, as well the chassis of the trucks that then carry the containers filled with goods away to destinations all along the East Coast.

Weiss said that the union is asking for wage increases that can cover the cost of inflation, and that a human eye is still needed to do his job right, even in the face of increasing automation.

“Employers push automation under the guise of safety, but it’s really about cutting labor costs to increase their already exceptionally high profits. Automation of our nation’s ports should be a concern for everyone,” he said. “The truth is robots do not pay taxes, and they do not spend money in their communities.”

The union said it will continue to handle military cargo and work passenger cruise ships.

Before the strike began, USMX said it offered a wage increase of nearly 50% and increasing employer contributions to employee retirement plans. USMX said their offer would still retain the same language on automation. The employers filed an unfair labor practice complaint on Wednesday with the National Labor Relations Board in which they accused the union of refusing to come to the bargaining table.

“In the last 24 hours, the USMX and ILA have traded counter offers related to wages. The USMX increased our offer and has also requested an extension of the current Master Contract, now that both sides have moved off their previous positions. We are hopeful that this could allow us to fully resume collective bargaining around the other outstanding issues – in an effort to reach an agreement,” USMX said in a statement Monday.

Voters remain laser-focused on the economy heading into the Nov. 5 election. Eighty-one percent of registered voters say the economy is very important to their vote for president this November, according to a poll published last month from the nonpartisan Pew Research Center.

Lauren Saidel-Baker, a speaker and economist at ITR Economics, a nonpartisan economic research and consulting firm based in New Hampshire, said that the longer the strike goes on, the greater the impact will be on inflation. Inflation cooled significantly enough for the Federal Reserve to cut the federal funds rate by half a percentage point last month.

“If this is just a week, again, there will be short-term disruptions and maybe things take a little bit longer to get where they’re going. That could be a risk for perishable items,” she said.

The supply chain issues that affected retail prices at the beginning of the pandemic may have prepared businesses for some disruption, she said, and this could mitigate some of the effects for consumers in the short term.

“We’re in a very unique situation where we just had this major, major supply chain disruption that caused a lot of American businesses to make contingency plans in a way that they just haven’t in the past. We have creativity and increased flexibility that will help us if this is just a brief disruption,” she said. “We still have elevated inventories in some sectors, so there might be a little bit more buffer in certain goods getting where they’re going.”

Aside from the economic effects on consumers, strikes can have spillover effects on other groups of workers. If dockworkers secure a strong contract as the result of this strike, it could affect other industries. Alexander Hertel-Fernandez, associate professor of international and public Affairs at Columbia University, and former deputy assistant secretary for research and evaluation at the U.S. Department of Labor, said the success of auto worker strikes and the Hollywood strikes may have emboldened union dockworkers.

“I think you’re likely to see other industries, particularly those most closely aligned with, um, transportation and logistics, really pick up the baton on that, especially if the economic and political environment continues to be favorable to them,” Hertel-Fernandez said.

The U.S. Chamber of Commerce has called on the Biden administration to invoke the Taft-Hartley Act, which allows presidents to intervene in strikes if it creates a national emergency. President Joe Biden has said that he does not plan to do so.

Biden’s position is unlikely to change, Hertel-Fernandez said, because of the politics of the timing.

“I think you would see a pretty negative response from the labor movement if they were to do so,” he said. “Given that it’s so close to the election, where labor is such an important constituent for the Democrats, that they would be unlikely to do it.”

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Bonamo reported in Elizabeth for New Jersey Monitor, part of States Newsroom. Quinlan reported from Washington.