President Joe Biden has taken a strong stance against 'shrinkflation,' a tactic used by companies to subtly increase prices by reducing product sizes. This strategy, which has led to fewer contents in packages such as pretzels, toothpaste, and candy bars, has caught the attention of the President.
In his recent State of the Union address, Biden highlighted the issue of shrinkflation, emphasizing how consumers are being charged the same amount for products with reduced quantities. This move is part of a broader effort by the President to shift the focus away from high prices and attribute the blame to large corporations.
Despite the country's low unemployment rate and a surge in new business applications, concerns about inflation, which peaked at 9.1% in June 2022, continue to trouble consumers. Even as inflation has eased to 3.1%, shoppers remain wary of increasing costs, particularly at grocery stores.
Economists have noted that while shrinkflation may be seen as deceptive, it could be a preferable alternative to outright price hikes. Companies have defended the practice as a means to manage costs and address environmental challenges.
Some lawmakers, including Sen. Bob Casey, have proposed legislation to ban shrinkflation, with President Biden endorsing the measure in his speech. The bill aims to empower the Federal Trade Commission to take action against companies engaging in this practice.
As the debate over inflation and consumer prices continues, the issue of shrinkflation has emerged as a focal point in the ongoing economic discourse, with both critics and proponents weighing in on its impact.
