Opinion: Price Gouging is Crushing Low-Income New Yorkers. Here’s What Gov. Hochul Should Do

“Unemployment continues to be higher in places like Flatbush, Brooklyn—my neighborhood—than in the wealthiest parts of the city and state. For my unemployed neighbors and those earning low wages, price increases hit us much, much harder than the richest residents of the Upper East Side who may own two or three homes.”

Another day, another flurry of headlines about inflation. Everywhere we turn, prices are rising. The cost of everything from rent to food to countless other goods and services is going up.

Here in New York, Gov. Kathy Hochul is acting as if she’s basically powerless to do anything about these increases in what we have to pay to survive and maintain a basic standard of living.

That’s not just wrong; it’s an abdication of her responsibility to lead in this time of crisis. Many New Yorkers, especially those of us who live in low-income communities of color, are still reeling from the COVID pandemic. Unemployment continues to be higher in places like Flatbush, Brooklyn—my neighborhood—than in the wealthiest parts of the city and state. For my unemployed neighbors and those earning low wages, price increases hit us much, much harder than the richest residents of the Upper East Side who may own two or three homes.

There’s plenty Gov. Hochul can do to help bring prices down. But first, she must call out what is happening: price gouging. In most cases, these are not fair price hikes, but prices inflated by corporations and others with unchecked power to raise them higher and higher.

In the case of skyrocketing rent increases we’re seeing all over the city, there’s nothing fair or reasonable about a landlord doubling or tripling rent overnight. It’s greed plain and simple. But it can be stopped through passage of good cause eviction legislation. That popular bill, which Hochul should enact immediately, would create a better system in which tenants in unregulated apartments can more easily renew their leases and negotiate fair rent increases.

READ MORE: NYC Tenants Reignite Push for ‘Good Cause’ Eviction Protections, Despite Landlord Opposition

And to fight the biggest corporations that dominate our economy and regularly abuse that dominance, Hochul should quickly pass the 21st Century Anti-Trust Act. Indeed, New York needs substantially tougher and more robust anti-trust tools like this law to fight Amazon and other market-dominating companies whose pricing-to-maximize-profit strategy harms small businesses, consumers, and workers alike. It would enable the New York State Attorney General to investigate and sue major corporations for anti-competitive behavior, including some of the massive price hikes we’re currently seeing. Additionally, it would allow class-action lawsuits to be filed against dominant corporations that abuse their power by unfairly exploiting consumers, workers, and small business competitors, and increase penalties that they face: violators of the 21st Century Anti-Trust Act would be fined $1 million and face Class C felony charges.

All of that may sound harsh, but it’s what we need to force corporations to change how they operate and do business in New York. Currently, many of the biggest companies and retailers here and across the country are raking in record profits—by using inflation as a pretext and justification to keep pushing prices into the stratosphere. As Lindsay Owens of the Groundwork Collaborative recently noted, “Companies that historically might have kept prices low to pick up profit by gaining additional market share are instead using the cover of inflation to raise prices and increase profits. Consumers are now expecting higher prices at the checkout line, and companies are taking advantage. The poor and those on fixed incomes are hit the hardest.”

She knows what she’s talking about. Over the past year, Owens and her colleagues listened to hundreds of earnings calls where corporate executives bragged about their higher profits and how inflation is great for business. These companies are raking in profits, while small businesses are closing or finding it harder to stay afloat.

Without a fair marketplace and fair competition, the biggest corporations set prices and even restrict the supply of what’s available, as we’re seeing right now with the baby formula shortage. Indeed, as David Dayen points out, “The dominant companies claim to be ramping up production to solve the shortage. It should be noted that their incentives run in the other direction, to keep prices high by putting a lid on supply. When you’re a monopolist, you can do that without much trouble.”

Gov. Hochul must take action now to push corporations to lower prices and create an equitable recovery from COVID. It’s what all of us—small businesses, consumers, and workers—need. An economy that limits the power and dominance of corporations is the only economy where entrepreneurs like me can truly grow and thrive.

For nearly 15 years, I ran a store on Flatbush Avenue in Brooklyn selling Macy’s return items, until Amazon took control of the retail market and forced me to shut down in 2018. If the 21st  Century Anti-Trust Act is passed, everyday New Yorkers will finally have a powerful weapon on their side to build an economy that works for all of us, not just dominant companies like Amazon.

Leroy Johnson is a Flatbush resident, former small business owner, and leader of New York Communities for Change (NYCC), a grassroots community organizing group.