Pandemic Profiteers

Loblaw Companies Ltd, a subsidiary of George Weston Limited, is the largest and most profitable Canadian food retailer. It spearheaded this wage premium shortly after the World Health Organization declared COVID-19 a global pandemic. In Canada, Loblaw owns over two hundred chains, including Loblaws, Fortinos, No Frills, Real Canadian Superstore, and Shoppers Drug Mart. As the de facto leader of the oligopolistic grocery retail sector, Loblaw’s choice to institute premium pay prompted its competitors, Metro and Sobeys, to follow.

The rolling out of the Canadian Emergency Response Benefit (CERB) offered a desperately needed reprieve for many, giving some workers the choice to stay home. With this new leverage in place, at a time when people were swamping underprepared grocery stores to hoard basic supplies, a shortage of workers would have spelled doom for retailers. Loblaw’s wage premium was not an act of corporate benevolence — it was a desperate attempt to entice people to work.

Today, the celebration of “heroes” has waned while grocery store profits have soared. In June, Galen Weston Jr, the company’s CEO, declared an end to “hero pay,” once again spurring Metro and Sobeys to follow suit. A devastating blow to frontline workers, the announcement provoked outrage from across the political spectrum.

Even Conservative Party members of Ontario’s provincial parliament — who had acted in 2018 to scrap a planned increase in the minimum wage — now voted unanimously for a motion inviting company representatives to explain this blatant attack on workers.

“Never About Safety”

In a flailing response, Loblaw offered a written statement, claiming that “the temporary premium was never about safety.” Rather, it was simply “a recognition of extraordinary effort.” But this reduction in wages threatens the social and economic safety net that every worker needs just as a second wave of the virus is gathering momentum. Galen Weston Jr, however, asserted that business operations had adapted to the pandemic, supposedly creating a “new normal” where workers are once again disposable.

Galen Weston Jr still declares his support for “progressive” wages, just as long as the initiative comes from the government. It is particularly ironic for a Weston to claim he’d approve of “any government-led effort to establish a living wage” when Loblaw is depriving the federal government of more than $1 billion in revenue by stashing money in a Barbados subsidiary.

On top of the criminality of tax evasion, the use of offshore accounts and other “wealth management” strategies make it impossible to assess a company’s profitability — and thus its ability to pay decent wages.

A Family Fiefdom

The Westons, sometimes referred to as Canada’s royal family, preside over a transnational business empire worth billions, with footholds in Canada, Ireland (Brown Thomas), and the UK (the Selfridges Group). They consistently place near the top of the fortune lists in those countries. Opulence, near-dynastic intermarriages, and hobnobbing with royals are characteristic features of this corporate fiefdom.

Their recent maneuvers to bring about a sector-wide reduction in wage premiums are entirely in keeping with the family’s anti-worker track record across the world. In 2012, a unionization attempt by workers at Holt Renfrew, a high-end department store chain owned by Galen Weston, encountered an aggressive, intimidating, and successful anti-union campaign. In 2017, Galen Weston Jr actively lobbied against government action to raise the minimum wage to $15 an hour.

The Westons have also left their mark in the Global South. Their apparel brand, Joe Fresh, was a major client of the Rana Plaza garment factory in Bangladesh, where more than a thousand workers died after the horrific collapse of the ninety-story building in 2013, with many others maimed for life — losses for which these workers and their families were never compensated.

The company is still deploying its corporate might to quell the demands of striking food workers for fair wages in Newfoundland and Labrador. Alongside its routine exploitation of labor, Loblaw also used its market power in a long-running industry-wide criminal scheme to fix the price of bread in Canada.

The Westons have reaped lavish profits from such large-scale corporate looting. Since the beginning of the pandemic, Galen Weston Jr’s personal fortune expanded by a whopping $1.6 billion. Following the cuts to pay premiums in June, Loblaw shares have ballooned, underscoring the stark dissonance between Bay Street and Main Street.

A Rigged Market

The story of the Westons tells us what socialists have known all along: a society founded on the relentless pursuit of profit is incompatible with human flourishing. Legal tools like competition and anti-trust laws have not delivered the unattainable utopia of the “free market.” In fact, the Ontario motion that invited company representatives to explain their coordinated retraction of pay premiums also came with a call to investigate whether the grocery oligopoly had violated the Competition Act.

Some legal scholars have already stressed the difficulty of conducting such a probe, since Canadian competition laws are weaker and vaguer than equivalent legislation in the US. It’s still clear that the companies violated principles of fair competition by competing primarily, if not solely, on the basis of low wages. Needless to say, the mobility of workers within the labor market is also greatly restricted when, in effect, the price of labor is fixed.

The cuts to the pay premiums came after Justin Trudeau’s Liberal government had spent weeks trying to discourage workers from applying for CERB, threatening to punish so-called “fraudulent” applicants with fines in excess of $5,000 and jail sentences, before it announced that there would be a shift to the Employment Insurance (EI) scheme. The new scheme outraged labor activists, since it would give workers who are unable to work just $600 to $1000 a month, instead of the $500 per week that was provided through CERB.

After concerted efforts to organize against a measure that would have worsened the coercive nature of work under pandemic capitalism, the government rolled back their anti-worker initiative by rebranding the $500 a week as a recovery benefit. Nonetheless, these tactics to criminalize the poor and reduce benefits have emboldened corporations to resume business as usual.

But “business as usual” serves as the common-sense rationale that leaves us hostage to capital and its drive for profit. Billionaires like the Westons will use it to justify the conditions of immiseration that they foster time and again. Workers shouldn’t accommodate their demands to the terms of this discourse. The only way to counter it is with a seemingly old-fashioned injunction: unite and fight.