Entrepreneur Blames Businesses for Cost-of-Living Crisis
A Western Australian entrepreneur argues that businesses are fueling the cost-of-living crisis by raising prices and maintaining high profit margins while consumers struggle.
Cailin Cooper, founder and business owner, challenges the notion that rising prices are solely external forces. They question the role businesses play in driving up costs, suggesting a cycle of price increases based on competitors’ actions rather than actual expense hikes.
The Price Increase Cycle
Cooper recalls a past experience where prices were increased by around 30 per cent. What stayed with her wasn’t the increase itself, but essentially the explanation: everyone else is putting their prices up.
The entrepreneur notes that this behavior has persisted over the years. Companies, they argue, often follow competitors’ price increases, leading to a new normal for consumers. This cycle continues, with each increase starting from a higher baseline.
The ‘Know Your Worth’ Culture
Cooper acknowledges the importance of valuing skilled labor and ensuring fair compensation. However, they suggest that the message of ‘charging what you’re worth’ has evolved into ‘charging whatever someone will pay.’
This shift, Cooper argues, contributes to the cost-of-living crisis. Business owners, who are also consumers, defend high markups in their own businesses while complaining about prices elsewhere. This duality, they suggest, is part of the problem.
Breaking the Cycle
The entrepreneur proposes a different approach: competing in the opposite direction. Instead of a race to the bottom, they advocate for covering genuine costs, paying fair wages, and making reasonable profits.
Cooper plans to test this idea by temporarily stripping the margin on a limited run of products right back and separating postage transparently. Their goal is to observe consumer behavior and trust in lower-priced products.
While this experiment won’t solve Australia’s economic challenges, Cooper believes it raises important questions. If businesses followed each other upwards, can consumers encourage fair pricing by supporting value-driven companies?
Consumers, who are also business owners, often question the prices of others while justifying their own markups. This duality contributes to a cycle where price increases become normalized, driven by market trends rather than actual cost hikes.
