‘This is not about putting profit before people’
Galen G. Weston, one of the world’s richest people, thinks common folk should be paid more.
“I continue to be a strong believer in a progressive minimum wage and would support any government-led effort to establish a living wage,” Weston said in a letter to customers about the COVID-19 crisis on June 11.
I’m sure advocates of a universal basic income were thrilled to gain such a powerful backer, one who leads the company that owns the country’s biggest grocery and pharmacy chains. Still, it was a rather weak declaration of support for the working poor, since few would be better placed than Weston to lead a charge for higher wages.
His family’s fortune of about US$8 billion was No. 222 on the Bloomberg Billionaires
Index as of June 18. A big source of that wealth, Loblaw Cos. Ltd., employs some 200,000 people, the majority of them in mid- to lowlevel jobs such as running cash registers and moving crates in warehouses.
Canada’s grocery oligopoly has been fighting amongst itself for market share in recent years, so Loblaw’s growth has been muted. Still, the parent company, George Weston Ltd., generated a combined profit of more than $700 million in 2018 and 2019. That means there’s room on the balance sheet for some labourrelated liabilities. The Weston family owns a majority of the company’s equity, according to Bloomberg, so they needn’t worry about a shareholder revolt.
As the biggest member of the grocery oligopoly, Loblaw probably could force the other two — Stellarton, N.S.based Empire Co. Ltd., which runs the Sobeys and Safeway chains, and Montreal-based Metro Inc. — to raise their wage rates if it acted first. Oligopolies tend to be led by a de facto leader, while the others follow.
Something like that happened on March 21, when Loblaw and Metro each raised the hourly rate of their frontline workers by $2, retroactive to March 8. Empire matched the next day with its own “Hero Pay” program.
All three described the increases as temporary, but there was reason to think the bonuses might stick. Pay rates tend to adjust very slowly, one of the reasons that wages and salaries have declined to the equivalent of about 44 per cent of gross domestic product from around 50 per cent in the 1970s and early ’80s, according to Statistics Canada data.
For a moment, the coronavirus crisis looked like it might force employers, and maybe even society at large, to reconsider the value of “unskilled” labour.
The grocers quickly learned that their meagre pay packages might cost them an opportunity to reap windfall profits, as the lockdowns brought a surge in demand for food and household goods to go along with the sudden danger.
The economic forces at work were so strong that they even moved Walmart Inc., the retail behemoth notorious for its commitment to cost containment.