OPINION:
Many voters wonder why food, retail and other prices remain high. I just bought olive oil at Whole Foods. Usually $6.99, it has increased to $10.99 since September. This price range cannot be blamed on supply and demand or tariffs.
If fuel costs and inflation are low, as they are now, why aren’t prices coming down? One overlooked fact is that merchants are using artificial-intelligence-generated algorithms for pricing. I studied economics in college, and what AI algorithms produce runs counter to traditional supply-and-demand models.
I am not an expert on AI, but it is becoming common for consumer-facing businesses, such as national food chain stores, to partner with AI platforms. Why? Based on my research, these algorithms, created by tech experts, use factors that are not based on traditional criteria, such as inflation and fuel costs, but instead on ZIP codes, population demographics and store locations.
The practice is, I believe, spreading throughout our economy. What happens if all merchants decide to use AI to fix prices? Consumers will have no choice but to refuse to buy or boycott. This is something about AI that consumers did not expect, despite all the promotion of AI as improving society. I’ve always thought that anything generating a high volume of TV advertisements should deserve a deeper look. Nobody ever envisioned AI being used to manipulate food prices, and if these algorithms can be set to increase prices, then the opposite can be done, bringing prices back to pre-AI levels.
Historically, industries have exploited economic crises, and I understand there are production costs, but this is just the latest form of price gouging. It’s frustrating that some states are prohibiting the use of algorithmic tools in setting prices but others aren’t. The departments of Agriculture and Labor, along with state legislators, need to hold companies accountable and limit this use, especially given the impact on food prices. If affordability is the issue, then both political parties can find common ground to resolve it.
GREG RALEIGH
Washington
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