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You’ve been paying more for stuff for a year now.

From used cars to rent to the price of groceries, inflation set record after record throughout 2021 and came to be widely acknowledged as the worst in 40 years.

There are very real reasons behind why inflation is high, including unusually strong consumer demand at a time when businesses are navigating worker shortages and continuing supply-chain issues. But one nagging question hasn’t been answered yet: Are you getting screwed by companies using inflation as an excuse to raise prices on you?

Sen. Elizabeth Warren, the Biden administration, consumer advocates, and even some economists think so. “The nation is dealing with inflation at its highest level in decades, much of it driven by corporate greed and anticompetitive behavior, and the federal government must use every tool available to prevent price gouging and reduce prices for Americans,” the Massachusetts senator wrote in a letter this month, urging the Department of Justice to take action against companies violating antitrust laws to hike prices for consumers.

Rising prices on food and household items, in particular, are starting to really worry consumers. The average net income margins, or profit margins, of about half of the 28 food and consumer goods manufacturers listed on the Fortune 500 have risen compared to the pre-pandemic levels, according to an analysis performed by Fortune. While those profit margins are up, it’s difficult to say whether or not that’s directly tied to higher prices.

So are these corporations really price gouging? Are they pandemic profiteers? Well, first off, it’s not a settled legal issue, given that there are currently no federal laws against it.

And secondly, the stock market largely loves it, with many investors rewarding public companies for their so-called greed. But the stock market is not the economy, and just because something is technically legal doesn’t mean it’s good. What’s good for investors may be very bad for the American consumer.

What is a healthy profit, anyway?

Let’s clear the air: Making a healthy profit is not the same as price gouging or even unfairly profiting off the pandemic. Nor does simply raising prices constitute price gouging.

“There's this issue of companies that are more profitable now for whatever reason,” Glenn Richey, the chair of the department of supply-chain management at Auburn University’s Harbert College of Business, tells Fortune. That could be a top-line issue where prices have been driven up out of necessity for the business; it also could be due to “opportunistic behaviors” by corporate executives, he says.

In fact, the discussions around companies’ price increases often conflate the idea of profiteering and price gouging, but they’re really two different things, Richey says. Profiteering essentially occurs when a business makes, or seeks to make, an excessive or unfair profit.

Price gouging happens on the consumer level when a seller increases the prices of goods, services, or commodities to a level much higher than is considered reasonable or fair. Many times this happens after a natural disaster, like a hurricane, when local stores and suppliers jack up the price of necessities.

It’s difficult to pinpoint a lot of price gouging at the corporate level, however, because there are a vast number of factors at play and the manufacturers themselves generally don’t directly set the retail prices. Instead, there’s a suggested retail price that retailers can take or leave. “Just looking at the flat numbers doesn't necessarily tell the whole story,” says Erin Lash, a director of consumer sector equity research for Morningstar.

“Most of the time, historically, when firms have raised prices, they've been very explicit about the fact that this is not to cover the entirety of the costs they're incurring—it's to offset a portion of it,” Lash tells Fortune. Take the case of McCormick & Company, the spice and condiment supplier, which raised their prices in 2021.

“To partially offset rising costs, we raised prices where appropriate last year,” McCormick CEO Lawrence Kurzius said on a January earnings call. “As costs have continued to accelerate, we are raising prices again where appropriate in 2022.”

And not every company has a fatter profit margin after raising prices. Fortune 500 company Kimberly Clark’s CEO Mike Hsu noted during the company’s latest earnings call that the personal goods manufacturer had already implemented “multiple rounds” of “significant pricing actions.”

The prices of its products like Kleenex tissues and Huggies Little Snugglers diapers rose 16.4% and 9.4% respectively over the past year, according to a Datasembly analysis for Fortune. But that didn't help Kimberly Clark’s profit margin, which is at 9.4%, still below pre-pandemic levels, according to Fortune’s analysis.

Price increases

There’s no doubt that U.S. and even international companies have raised prices across the board. Not only are benchmarks like the consumer price index on the rise, the companies themselves are crowing about it.

Companies contend that they have been forced to raise those prices because their own costs have increased so significantly. Mondelez, a Fortune 500–listed snack food and beverage company, announced price increases of 6% to 7% took effect in January. “We have implemented material price increases, ensuring we are significantly hedged across key commodities and we are continuing to drive productivity measures,” Mondelez CEO Dirk Van de Put said during the company’s January earnings call. Van de Put did not rule out additional hikes later in the year.

P&G, meanwhile, said its price increases are meant to offset constrained supply-chain disruptions and even headwinds faced by foreign exchange rates. “We will offset a portion of these cost pressures with price increases and with productivity savings,” Andre Schulten, chief financial officer of P&G, which makes products ranging from razors to diapers to laundry detergent, said on a January earnings call. Schulten noted P&G announced increases across every U.S. product category. The company’s hikes are the largest implemented since the spring of 2019.

Yet P&G reported that sales during its latest quarter ending on Dec. 31 increased 6% compared to the prior year—perhaps fueled, in part, by those price increases.

In fact, many of the biggest food and consumer goods manufacturers have implemented price increases. A review by Datasembly for Fortune of a sampling of national average prices for 18 key products from Fortune 500–ranked consumer goods and food manufacturers January 2021 to 2022 found that 11 products saw inflation-beating price increases.

Companies including JBS, Kellogg, Kimberly-Clark, and Tyson all had products with price jumps that were higher than the 7.5% inflation rate hit in January.

The highest price increase among the products analyzed came from JBS brand Certified Angus Beef’s 8-ounce porterhouse steaks, which spiked nearly 34% over the past year, according to Datasembly. A package of Tyson’s Any’tizers Buffalo-style boneless chicken bites, meanwhile, surged from an average cost of $6.62 in January 2021 to $8.39 last month—a 26.7% increase. By comparison, the January consumer price index for beef and veal rose 16% over the past 12 months, while chicken prices jumped 10.3%.

Some of those same companies also have higher profit margins compared to pre-pandemic levels. Of the 13 foods and consumer goods manufacturers listed on the Fortune 500 that had higher average profit margins in 2021 than in 2019, 11 companies had margin increases that tracked higher than inflation. But that doesn’t necessarily mean that they’re profiteering.

Alcoholic beverage giant Molson Coors and P&G, for example, raised prices on five products that Fortune examined in a way that corresponded with inflation, or even fell below it. Yet Molson Coors and P&G more than doubled their profit margins last year compared to pre-pandemic levels. These higher margins could be due to moving more product or cutting expenses. Or it could be tied to marginally higher prices.

Tyson and JBS also saw significant increases to their profit margins—not the highest seen, true, but still extensive. And as noted earlier, several of their key products saw major price jumps. Kellogg also saw healthy margin growth and above-inflation product price increases.

P&G told Fortune on February 18 that its production costs have simply been higher; the year-over-year increases of commodity and transportation costs have gone up $1.3 billion after taxes over the past two quarters. “These are the largest increases we've seen in about 20 years, and 50% higher than the next highest year,” a spokesperson told Fortune. “Where we need to pass on some costs, we’re pairing those price increases with innovation wherever possible to continue to deliver great value for our consumers.”

The P&G spokesperson said the company’s focus is on “delivering superior products with the best performance, ultimately delivering value to our consumers,” without commenting directly on the higher profit margin.

Molson Coors Beverage and Archer Daniels Midland declined to comment. JBS did not respond to requests for comment.

The struggle is real

Nearly every company is fighting supply-chain bottlenecks, worker shortages, and rising commodity costs—all of which drive up operating budgets and eat into profits, says Linda Montag, a senior vice president in Moody's Investors Service's retail and consumer goods group. And there’s typically a lag between when companies announce price increases and when those increases contribute to the company’s profit margin, if they ever do.

Inflationary headwinds, for example, are credited with creating a four percentage point drag to the 49.11% gross margin P&G reported for the latest earnings quarter. Higher freight costs generated a 0.6 percentage point hit, according to Lash.

The impact of growing global demand and tight supply for commodities on which food manufacturers rely cannot be overstated, says Kellogg spokesperson Kris Bahner. “This is creating record-high prices for ingredients and commodities needed to make and distribute our foods, such as cooking oils, wheat, corn, rice, and paper and cardboard, as well as transportation costs,” Bahner tells Fortune. “Our industry has zero tolerance for illegal and deceptive practices such as price gouging and online scammers.”

“Like so many other products, the factors driving meat prices higher include increased demand, COVID-related supply-chain disruptions, and increased input costs, especially higher energy and labor costs,” Neil Bradley, executive vice president and chief policy officer at the U.S. Chamber of Commerce, said last month in a statement.

Additionally grain and oilseed prices, which are used to feed livestock, have been higher in 2021, according to Jayson Lusk, head of the department of agricultural economics at Purdue University. This, in turn, has pushed up the cost of feed for livestock and poultry.

Price increases for chicken, in particular, are “barely” outpacing inflation—even despite major inputs like corn, soybeans, gasoline, packaging, and transportation increasing by double digit costs, adds National Chicken Council spokesman Tom Super. It’s worth noting, again, January chicken prices rose 10.3% over the past 12 months, compared to the overall inflation rate of 7.5%.

"Economists and industry analysts confirm that today’s higher meat prices are a direct result of constrained supplies due to the labor shortage, higher input costs for such things as grain, labor, and fuel, and strong consumer demand," Gary Mickelson, a Tyson spokesperson, said in response to Fortune's questions to the company around higher profit margins and product prices.

“It's not that some companies are raking in the benefits here,” Montag tells Fortune. The companies that are showing better margins right now aren't necessarily always going to do so, Montag says. The upswings, for instance, could be due to companies’ slashing marketing budgets during the pandemic or increased volume. Some companies are still producing and selling goods at a higher rate, which helps to cushion the impact of higher operating costs.

“The inflation is real,” Montag says. Anybody claiming that corporations raising costs right now are doing so to simply gouge people are “nuts,” she adds.

Some argue the system is rigged—and rewarding price hikes

Despite the concerns over pricing changes—or perhaps because of them, the U.S. economy grew 5.7% last year. Could this environment of high demand, lots of job creation, and yes, even high inflation, be what economic growth actually looks like to an America used to 40 years of deflationary globalization? To be sure, it’s still a rebound from the depths of the coronavirus recession, but America hasn’t had a genuine economic boom like this since the mid-20th century, when it last battled high inflation.

But some experts contend that higher prices aren’t a result of healthy economic growth or even making up for rising operating costs, but rather deregulation and a lack of competition.

“If markets were competitive, companies would keep their prices down in order to prevent competitors from grabbing away customers,” Robert Reich, an economist and former Clinton labor secretary, recently wrote on the topic.

Several sectors have been recently called out by the Biden White House for lack of competition that could be helping to drive up costs. Four major meat companies—Cargill, JBS, National Beef Packing, and Tyson—control half or more of the pork, beef, and chicken markets, according to the administration’s talking points. And the Treasury Department recently released a 63-page report highlighting that Anheuser-Busch InBev and Molson Coors control about 65% of the U.S. beer market by revenue. Those companies, critics say, are able to raise prices as they’d like because customers don’t have much choice between a host of different brands and products.

“What we've seen over the last few decades is less competition and more concentration that literally holds [the] economy back. And in too many industries, a handful of giant companies dominate the entire market,” Biden said in January.

But Julie Anna Potts, president and CEO of the North American Meat Institute, has pushed back on these claims, saying that the industry is not as concentrated as the Biden administration has portrayed and that the structure has largely remained unchanged for 25 years. "If concentration is causing the recent rise in consumer prices for meat and poultry products, why did concentration not cause inflation five or 10 years ago?" Cargill, JBS, National Beef, and Tyson are all members of the institute but did not comment on the Biden administration's claims specifically to Fortune when asked.

Beer Institute president and CEO Jim McGreevy, meanwhile, called the DOJ report a "mischaracterization of the thriving American beer industry," noting there have been more than 10,000 new breweries permitted since 2010. "Consumers are benefiting from the growing number of brewers and beer importers, with more choices for beer than at any other time in our nation’s history," he said. Anheuser-Busch InBev and Molson Coors are members. Anheuser-Busch InBev and Molson Coors did not comment about the Biden administrations' claims specifically to Fortune when asked.

Even inside the White House, some economists have objected to the administration's push to blame corporations for inflation, according to a report from the Washington Post.

In fact, there’s “an awful lot of competition” within the food manufacturing and consumer goods space. Not only are many of the companies competing with each other, they’re also going up against private labels, Montag says. Store brands have cornered about 17.7% of the market in dollars and 19.6% in units sold, according to the Private Label Manufacturers Association.

Yet others argue that the price hikes are unjust, including Rakeen Mabud, chief economist for the Groundwork Collaborative, a progressive activist group focused on economic issues. Mabud tells Fortune what stands out to her as “deeply unfair” about the current situation is that CEOs and corporate executives are saying they’re able to jack up prices on consumers right now, and Americans don’t have a choice but to continue to pay the higher prices—all while these companies are paying bigger dividends to shareholders.

Giant corporations are making record profits by increasing prices, and CEOs are saying the quiet part out loud: theya€?re happy to help drive inflation.

American families pay higher prices and corporate executives get fatter bonuses. See for yourself what executives are saying:

— Elizabeth Warren (@SenWarren) February 15, 2022

“These megacorporations are making bank off of people who are just struggling to keep their heads above water,” Mabud says. “That's unfair. It's unfair, but it's also bad for our economy. Our economy does best when we all do well—not these big corporations.

“There's no doubt that companies are profit-driven. I think there's a real question, in many ways, a moral question, about how much profits are appropriate,” Mabud continues. “What is just very clearly unfair is the fact that investors and shareholders are making money on the backs of consumers right now.”

And public companies are currently being rewarded for trumpeting those price hikes. During the latest earnings season, companies that have touted successful product price increases saw almost immediate gains in their share price, according to a recent Bloomberg report. Chipotle, which heavily focused on its implementation of a 4% price increase in December, had its shares rise 10%. Clorox—which more quietly raised prices—focused more of its earnings call on warning investors that the cleaning supply company could see impacts on its margins for years. It saw its stock dip 14% in the aftermath, Bloomberg reported.

Company after company has announced price increases—and they're being egged on by their investors, Mabud argues. Companies are seeing their profit margins get ever fatter, and so they're hiking prices because it's working and investors are demanding that, she says.

“That's going to perpetuate this problem of profiteering long beyond inflation going away,” Mabud says.

The long-term cost of raising prices

The vast majority of Americans know something is wrong. Nine out of 10 have noticed that the prices on the items they routinely purchase have risen in recent months, according to Harris Poll, and 44% of U.S. adults say inflation is currently their biggest concern.

Consumers, however, are somewhat tolerant of price increases during emergencies, research shows. Less than half of U.S. consumers, for example, thought the price increase in hand sanitizer at the beginning of the pandemic was unfair, according to a recent working paper by Columbia researchers. “Consumer norms about fairness seem pretty flexible. So what people think is fair can be highly context dependent,” coauthor Christopher Buccafusco tells Fortune.

It’s less clear whether consumers are willing to consider there’s something structurally wrong or for how long that tolerance will hold. And if it doesn’t, there could be a huge backlash against both businesses and politicians who let it carry on.

Yet there’s a real cost to these rising prices. With the exception of slightly more volatile commodities, the cost of a can of soda or a toothbrush isn't going to come down that much in the future—even after supply pressures ease. Instead, consumers are going to be stuck with higher prices over the long haul.

“Sometimes we talk about inflation like we care about it for its own sake. We really care about inflation because we care about the way it affects people,” Mabud says. “These price hikes are really, really hitting vulnerable people hard.”