Don’t try to tell me my wages are sharply increasing either, because they’re not! Nor are my friends, family, or neighbors.
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It would probably take someone with a serious background in economics and reporting to actually figure it out: the global economy means money is moving everywhere and it’s easy to lose track of it. However, I can offer some guesses based on what little I do know:
There’s been a lot of news about corporations reporting profits and passing on those profits to executives, boards, and major shareholders. There’s good reason to believe that a lot of the increase in prices is going to these people and organizations. This is pure corporate greed – I’d say more, but there isn’t anything to explain here.
However, some of it is being spent on actual costs. While it finally looks like it might come to an end; there’s been a “shipping apocalypse” that’s lasted around 12 months. It was initially set off when companies dropped production predicting lowered demand after COVID, made worse by the Evergreen crash in the Suez, and continued by various COVID restrictions and labor issues (which I’ll talk about more in point 3); and it’s resulted in massive shipping delays (there’s some Kickstarters I pledged to that are months, even a year, late because of supply chain issues) – or very high costs as you pay a premium to cut in line.
These increased shipping costs get lost too – some go towards increased fuel costs (because there’s enough money in shipping for it to be worth it to go faster at the cost of fuel efficiency); some goes to workers in the form of rush jobs on maintenance and turnaround (which means overtime for shore crew) and buying off vacation on ship crew; but some of it also makes it’s way to the top, and some goes other places.
The third place is increased pay – but probably not where you are. The people making more money off of this are longshoremen (port workers) and transporters: the people working to get you the stuff you’re buying. Trucking pay is up – some reports have it up 30%/year over the last two years, though it’s probably less than that. Port workers pay is up too, although not as much – but there’s also been a hiring spike to get ships unloaded faster, which means more money. And other people involved in logistics – ship workers and captains, train crew, and so on – have also seen notable increases in pay and benefits.
And a big part of this is that these workers know they have the power right now. Because of the aforementioned shipping problems, they *know* they are in demand – especially the skilled ones – and have threatened strikes for higher pay; and as long as their demands aren’t too excessive, it’s cheaper, even in the long run but definitely in the short run, than losing out on money because you’re missing workers. And in case any of the companies thought they were bluffing, there were a few strikes last year, including a 4-day strike in the Port of Los Angeles, the largest port in the US. The fact that strike came soon after the Evergreen crash (Strike in April, Suez crash in March) also significantly impacted the shipping delays.
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