Canadian grocers keep raking in sky-high profits, but does that equal ‘greedflation’?

Sean Boynton -

Canada's major grocery chains continue to see their sales and profits rise in the midst of record-high inflation, but a new report says it's hard to determine if they are taking advantage of the situation by profiteering.

The report from Dalhousie University's Agri-Food Analytics Lab, released Thursday, compared the year-end profit margins of the three major chains — Loblaw, Metro, and Empire Co., which owns Sobeys — over the past four years and found they stayed "relatively consistent," leaving little public evidence of so-called "greedflation."

"Indeed, revenues have increased dramatically, but so have the costs of goods sold," said the report, which was based off research led by Dalhousie University professor of food distribution and policy, Sylvain Charlebois.

Read more:
Jagmeet Singh says grocery chains are ‘profiteering’ amid inflation. Is it true?

For example, while Loblaw's gross profit margin was 3.76 per cent by the end of 2021, that's only up slightly from the 3.57 per cent margin posted in 2018.

Similarly, Empire's margin also grew less than one basis point over the same time period, from 1.64 per cent to 2.08 per cent. Metro, which actually saw a negative margin of -0.24 per cent in 2018, posted a 0.44 per cent profit margin last year.


Clickable image 1© Provided by Global News

Charlebois and his fellow researchers found that, with a couple of exceptions, the same trend was seen over the past four years among the major U.S. grocery companies, which include Walmart, Costco and Kroger.

"It may look counterintuitive, but the numbers are not pointing to commercial abuse towards consumers," the report says.


Clickable image 2© Provided by Global News

How you can save money at the grocery store as prices soar

The report comes shortly after Statistics Canada reported inflation caused food costs to rise 9.9 per cent this past July, compared with a year ago, the fastest pace since August 1981.

That was despite slowing of the overall inflation rate in July to 7.6 per cent, down from 8.1 per cent in June.

Among food items that have got considerably more expensive, bakery goods are up 13.6 per cent since last year amid higher input costs such as the Russian invasion of Ukraine, which continues to put upward pressure on wheat prices. The prices of other food products also rose faster, including eggs, which are up 15.8 per cent, and fresh fruit, up 11.7 per cent since last year.

The soaring prices are having an impact on shopping habits, with a recent survey finding more than two-thirds of Canadians attributing their financial stress to sticker shock at the grocery store.

Read more:
More price hikes coming to Canadian grocery stores this fall, food suppliers say

In their latest earnings calls over the past two months, the heads of Loblaw, Metro and Empire have lamented that rising food costs have shifted buying habits, with customers sticking to shopping lists and avoiding impulse buys while gravitating toward lower-cost "house" brands. They also said other economic factors like labour shortages have "softened" growth.

Yet all three companies have seen their sales — and profits — continue to increase, according to their latest quarterly earnings reports.

Loblaw's revenues in its second quarter were $12.85 billion, an increase of $356 million or 2.9 per cent compared with $12.49 billion in the prior year quarter. Adjusted profits for the three months ending June 18 was $566 million or $1.69 per diluted share, up from $464 million or $1.35 per diluted share in the second quarter of 2021.

Metro's third-quarter results showed a profit of $275 million, up from $252.4 million a year earlier, as sales gained 2.5 per cent. The profit amounted to $1.14 per diluted share for the period ending July 2, up from $1.03 cents per diluted share a year earlier. Sales totalled $5.87 billion, up from $5.72 billion.

Meanwhile, Empire reported a quarterly profit of $178.5 million, up from $171.9 million a year earlier, as its sales also climbed higher. The company said its fourth-quarter profit amounted to 68 cents per diluted share, up from 64 cents per diluted share a year before. Sales in the 14-week period ending May 7 totalled $7.84 billion, up from $6.92 billion.

Video: Inflation: Why the price of groceries are expected to rise

All three companies, however, said the continued increases were largely due to high sales in the pharmacy divisions, which have far outstripped food sales.

Among Loblaw's existing stores, for example, pharmacy sales increased 5.6 per cent compared to last year, while food sales rose just 0.9 per cent. Metro, too, saw a 7.2 per cent spike in pharmacy sales compared to a 1.1 per cent rise in food sales.

"Right now cough and cold (sales) ... it's like we're in the middle of winter," Loblaw chief financial officer Richard Dufresne said during an earnings call with investors in July.

The Dalhousie University report suggests more evidence is needed to determine if the major grocery corporations are taking advantage of inflation to post higher profits.

"A proper investigation by the Competition Bureau of Canada would shed more light on practices in the industry," the researchers wrote, including how food processing, transportation and affiliated companies in the food industry impact costs and profit margins.

Read more:
Soaring food inflation has 72% of families with kids worried: Ipsos poll

Because the publicly available data in earnings reports is "inconclusive at best," the report concludes that there is "little evidence to suggest grocers in Canada and the United States are colluding or taking advantage of the current food inflationary wave the western world is experiencing."

The Competition Bureau has not said publicly if it is investigating the operations of the grocery industry. The bureau did not answer Global News' questions on whether it is planning such a probe.

In the meantime, NDP Leader Jagmeet Singh has made the increased profits a key issue for his party, calling on the Liberal government to impose an “excess profits tax” on major grocery chains and oil and gas companies.

In a statement to Global News, a spokesperson for Deputy Prime Minister and Finance Minister Chrystia Freeland’s office said the government remains focused on “building a fairer and more inclusive economy,” which includes ensuring the wealthiest Canadians and businesses pay their fair share in taxes.

— With files from the Canadian Press

Lawyers bash Goodell-led arbitration in NFL racial bias suit

NEW YORK (AP) — Lawyers for three Black NFL coaches alleging racial bias by the league took aim directly at Commissioner Roger Goodell on Wednesday in their latest arguments against arbitrating a dispute they say belongs before a jury.

In papers filed in Manhattan federal court, the lawyers wrote that arbitration would allow “unconscionably biased one-sided ‘kangaroo courts’” to decide the outcome of the lawsuit filed in February by Brian Flores, who was fired in January as head coach of the Miami Dolphins. He is now an assistant coach with the Pittsburgh Steelers.

Two other coaches — Steve Wilks and Ray Horton — later joined the lawsuit as plaintiffs.

Their lawyers said Goodell, who would lead the arbitration if the case is not decided by a jury, could not be fair in overseeing and ruling on the dispute as to whether the league engages in systemic discrimination. They included in their submission articles about Goodell's salary and other personal details.

They cited the hundreds of millions of dollars he earns from teams, his public statement that the lawsuit is without merit and the likelihood that he could be a witness in the case.

In June, lawyers for the NFL and six of its teams said arbitration was required because the coaches had agreed in their contracts to multiple arbitration provisions “that squarely cover their claims.” They also said the coaches were required to go to arbitration individually rather than as a group.

Lawyers for the league and its teams did not immediately respond to requests for comment Wednesday from The Associated Press.

Letting Goodell preside over the case would “deviate from established authority and societal norms” and create a new standard for arbitration that would let it be approved “no matter how biased and unfair the process,” lawyers for the coaches said in their latest submission.

And they added that it would “embolden employers to create manifestly unfair arbitrations with assurance that they will be approved by the courts.”

“If the Court compels arbitration, scores of employers following this case, and those who learn of it, will undoubtedly change their arbitration clauses to permit the appointment of an obviously biased decision-maker,” the lawyers said.

Several weeks ago, U.S. District Judge Valerie Caproni denied a request by lawyers for the coaches to gather additional evidence before she rules on whether the case must go to arbitration.

That move made it more likely she'll rule on the arbitration issue within weeks rather than months.

___

More AP NFL: https://apnews.com/NFL and https://twitter.com/AP_NFL

Larry Neumeister, The Associated Press

Bed Bath & Beyond is closing 150 stores and slashing 20% of its corporate staff

gkay@insider.com (Grace Kay) - Yesterday 

A Bed Bath & Beyond store in New York City. 

Bed Bath & Beyond announced in a financial update for investors that it is closing about 150 stores.
The company is also cutting its corporate staff by about 20% as sales fell 25% last quarter.

The company is one of several to initiate a round of sweeping layoffs in recent months.



The rise and fall of Bed Bath & Beyond: Once one of America's most beloved big-box retailers, it's now on the brink

Since its founding in 1971, Bed Bath & Beyond has been a go-to destination for home goods.
In recent years, however, the retailer has shown significant signs of struggle, including slumping sales and executive turmoil.

 
We took a look at the rise and fall of the iconic big-box retailer.

Once the golden child of big-box stores, Bed Bath & Beyond is now struggling to stay afloat.

The company reported a $358 million net loss in its most recent quarter, the latest in a series of setbacks for the home goods store. In June, Bed Bath & Beyond announced it was replacing CEO Mark Tritton and a number of other executives in yet another attempt to reorganize its leadership.

Now, analysts are saying the company is in its "end days," with some speculating it will become the next meme stock, following in the footsteps of Gamestop before it.

Bed Bath & Beyond was once a leading home goods retailer, appealing to shoppers across the nation with its strategy of abundance. The beloved store, which lined strip malls nationwide, became known for its huge assortment of products spanning every color and style.

Over the years, it became a go-to for just about anything for the home and — true to its name — beyond.

We took a closer a look at Bed Bath & Beyond's rise from a small linen store in New Jersey to a major national retail chain now on the brink of collapse.

Bed Bath & Beyond plans to close about 150 of its stores and cut its corporate workforce by 20%.

The announcement was made ahead of a financial-update call on Wednesday. Shares of the retailer's stock fell by more than 24% after Bed Bath & Beyond revealed sales across its stores had dropped 25% in the previous quarter.

The company plans to cut costs by $250 million in 2022 via layoffs and store closures and has already begun shutting down some of its flagship stores that it has identified as underperforming.

"The company continues to evaluate its portfolio and leases, in addition to staffing, to ensure alignment with customer demand and go-forward strategy," Bed Bath & Beyond said in a press release.

The retailer also plans to shed a third of its flagship brands and expand further into national brands. It also announced that the Buybuy Baby chain of stores will remain with the company.

"We have taken a thorough look at our business, and today, we are announcing immediate actions aimed to increase customer engagement, drive traffic, and recapture market share," Sue Gove, director and interim chief executive officer, said in the press release. "This includes changing our merchandising and inventory strategy, which will be rooted in National Brands. Additionally, we are focused on driving digital and foot traffic, as well as optimizing our store fleet. We believe these changes will have a widespread positive impact across customer experience, inventory assortment, supply chain execution and cost structure."

Bed Bath & Beyond is one of several companies to initiate a sweeping round of layoffs in recent months as shoppers have begun to cutback amid soaring inflation and concerns of an impending recession.

Toxic chemicals commonly found in dollar store items, testing shows


OTTAWA — Canada needs more transparency and better enforcement to protect Canadians from unlimited exposure to toxic chemicals like lead and cadmium, an analysis from Environmental Defence said Wednesday.


The organization reported on tests conducted on dozens of products purchased at popular Canadian dollar stores. One in four of the products tested were positive for substances managed under the Canadian Environmental Protection Act. Many of the findings were within the allowable limits, but the report says those limits are not strong enough.

The outer ring on a set of stereo headphones was found to have 24 times the legal limit of lead, and five times the legal limit of cadmium.

The solder inside the same headphones had 170 times what is considered safe on outer portions of the headphones. The solder on a separate set of earbud style headphones had 3,000 times the amount of lead allowed on the accessible portions.

But the solder is not covered by the regulations, a gap Environmental Defence insists must be closed.

Cassie Barker, toxics manager for Environmental Defence, said internal lead can still be exposed if products break or wear down.

"The way that kids use products, and you know they break things and so that internal (lead) quickly becomes external lead," she said.

The toxic harm from lead poisoning has been documented for more than 50 years. It can cause significant cognitive and developmental delays in young children with high exposures, and can create risks of high blood pressure and kidney damage in adults. It has been barred from use in gasoline, food cans and paints.

Cadmium, often found in batteries, coatings and plastic stabilizers, is a known carcinogen.

Barker said the headphones, which exceeded the allowed limits of both metals, are proof that monitoring and enforcement of toxic substance regulations need to be beefed up.

"Obviously, retailers shouldn't be shirking their responsibility for having safe products on their shelves," she said, but regulators are leaving "big loopholes" for dollar stores to walk through.

Other products that raised concerns for Environmental Defence were food cans lined with bisphenol A, commonly known as BPA. The chemical, which helps make plastics harder, was added to the list of toxic substances in Canada in 2010 after studies linked it to prostate disease, breast cancer, infertility and behavioural problems in children. It was banned from baby bottles and other plastic baby products that same year.

But it is still allowed in products such as food cans, said Barker. Some companies have moved away from using the substance on their own, but 60 per cent of the cans the organization tested contained it.

The report calls on Environment Canada to require companies to label all hazardous ingredients in products, including those that are hidden inside electronics or used in the packaging. It also recommends more regulatory enforcement and product testing so that harmful products can be identified before they hit store shelves.

Barker said the tests were done on items from dollar stores because such stores are often the only option for people with low incomes or in marginalized communities.

Environmental Defence provided its report to the companies whose stores it visited, including Dollar Tree and Dollarama. A statement from Dollar Tree said a similar study in the United States two years ago prompted it to remove 17 chemicals from its products.

A statement from Dollarama said, "consumer product safety is our utmost priority, and we have strict processes and controls in place to monitor product safety and quality. The four Dollarama product categories identified in the report (stereo headphone, earbud, pencil pouch and activity tracker) meet applicable Canadian product regulations and are safe to use for their intended purposes."

The Canadian Environmental Protection Act, which governs toxic chemicals in Canada, is in the midst of being updated.

Legislation that would enshrine the right to a healthy environment into law for the first time passed in the Senate in the spring, though the law doesn't define what a "healthy environment" means.

Environment Minister Steven Guilbeault said in an interview that he is open to additional changes to the bill, which is expected to be debated in the House of Commons this fall.

Guilbeault said he hadn't yet read the Environmental Defence report and couldn't comment on its specific findings.

This report by The Canadian Press was first published Aug. 31, 2022.

Mia Rabson, The Canadian Press

Lufthansa canceling flights from Frankfurt, Munich as pilots strike
CBSNews - 6h ago

German carrier Lufthansa says it is canceling almost all passenger and cargo flights Friday from its two biggest hubs, Frankfurt and Munich, due to planned strike action by pilots.

A union representing Lufthansa pilots said early Thursday that they will stage a walk-out after demands for a pay increase were rejected by management.

Lufthansa said some 800 flights would be canceled, affecting many travelers returning at the end of the summer vacation. The airline's budget carrier Eurowings would not be affected, it said.

The union Vereinigung Cockpit accused Lufthansa on Thursday of failing to improve on the company's previous offer, leaving pilots no choice but to go on strike to press their demands.

According to Lufthansa, the company had offered a one-off increase of 900 euros ($900), amounting to a 5% increase for senior pilots and an 18% increase for those starting the profession.

The union had called for a 5.5% raise this year and an automatic above-inflation increase in 2023. In addition, pilots are seeking a new pay and holiday structure that the airline said would increase its staffing costs by about 40%, or some 900 million euros over two years.

Airlines around the world are facing a shortage of pilots as many carriers offered early retirement to thousands of pilots in an effort to slash costs as COVID-19 was spreading in 2020 and 2021, when airline operations came to a near standstill. An aging workforce has also led significant numbers of older pilots to retire as scheduled, further reducing the number of available flyers.

US labor dispute: Dock workers say 'no' to port automation

Teddy Ostrow, Deutsche Welle - 

Labor negotiations for 22,000 dock workers on the West Coast are having US industries biting their nails for fear of disruptions to trade. The dock workers' union says automated ports are job killers and less productive.The labor contract of 22,000 West Coast dock workers expired on July 1 and negotiations for a new one are reportedly stalled. A key issue for the workers and the employers is one that has rattled the ports for six decades: automation.

Terminal operators and ocean carriers claim that automated technology at the ports is necessary to keep the US competitive. Yet the dock workers union argues that while automated ports are killing jobs and stripping worker power, they are not even leading to an increase in productivity.

"I like the work, but the sad part is there have been a large number of jobs that have been eliminated because of it," Rebecca Schlarb, an automation coordinator at the Long Beach Container Terminal, one of two automated ports on the US West Coast, told DW.

Stalled negotiations

The labor agreement under negotiation covers workers across 29 ports in California, Oregon and Washington state. That includes two of the country's most trafficked ports at Long Beach and Los Angeles.

The Wall Street Journal reported that labor talks, which began on May 10 in San Francisco, are presently stalled over a jurisdictional conflict at the Port of Seattle between the negotiating union, the International Longshore and Warehouse Union (ILWU), and a separate machinists union.

As they often are, these negotiations are incredibly high stakes. US President Joe Biden has met with both negotiating parties to encourage smooth talks, so as to prevent the monthslong shipping delays that resulted from previous disagreements between the union and employers in 2002 and 2014.

US ports are already strained due to supply chain disruptions, operating at peak capacity and handling record volumes over the past two years of the pandemic. The ports at Los Angeles and Long Beach have been rated among the world's least efficient in the World Bank and S&P Global Market Intelligence's 2021 Container Port Performance Index.

The union and the 70 terminal operators and ocean carriers represented in the negotiations by the Pacific Maritime Association (PMA) have agreed to a media blackout during the labor talks, but they released a joint statement in July announcing they have a tentative agreement on health benefits.

Stalled talks mean the ILWU and PMA have yet to settle on wages and the key issue of automation.

A decades-old conflict

Whether more remotely operated cranes, autonomous vehicles and other automated technology should be brought to West Coast ports sits at the center of the current labor dispute.

Two automated ports reside on the US West Coast in the San Pedro Bay Complex: the Trans-Pacific Container Service Corporation (TraPac) at the Port of Los Angeles and the Long Beach Container Terminal (LBCT) at the Port of Long Beach.

Even though automation requires massive upfront investments, the PMA argues the changes are critical for American ports to increase their waning efficiency. PMA President Jim McKenna told Bloomberg news agency that this was "the key to long-term survival, long-term competitiveness."

The ILWU, on the other hand, has been arguing for years that automated technologies are job killers for their members. Employers' introduction of machines has stripped workers of their power over the docks and weakened the union.

Indeed, the issue has been front and center during labor talks for over six decades. The massive cranes, cargo ships, and rectangular containers that speckle coasts around the world were an innovation, or automation, of the mid-20th century.

Prior to the 1960s, during the "break-bulk" era of shipping, longshoremen loaded and unloaded cargo ships in cases, nets, or on wooden pallets. It was meticulous, dangerous and time-consuming work that required large numbers of dock workers.

The ILWU and PMA struck a deal in 1960 to allow the burgeoning technologies on the ports, but neither party expected just how much the automation would transform work on the waterfront. Tens of thousands of longshoremen jobs were shed from the ports as employers decided to cut labor costs.

In 1971, a few years after so-called containerization really took hold on the ports, West Coast dock workers were fed up with the deterioration of their jobs and led the union's longest strike in history -- 134 days. It was the first such coordinated strike for the union, shutting down ports up and down the coast.

While workers won wage increases, automation remained on the table, and in the decades following, the ILWU has conceded to more and more automated technology at the ports. Most recently in 2008, the union explicitly accepted machine-automation technology in their labor agreement.

More robots, less productivity

Employers are insistent that automation will not kill jobs. The PMA commissioned a report showing that the West Coast's two automated port terminals, TraPac and LBCT, actually saw a 31.5% increase in paid hours for dock workers, in addition to container processing twice the speed as nonautomated ports.

But workers and labor researchers dispute both findings. Patrick Burns, a senior researcher at the Los Angeles-based nonprofit Economics Roundtable told DW that the influx of shipping volume over the past two years masked the job loss at both terminals.

Accounting for the job hours per container that went through the ports, Burns and his colleague Daniel Flaming found in their report "Someone Else's Ocean" -- which was underwritten by the ILWU -- that automation reduced employment by 37% to 52% at LBCT, and by 34% to 37% at TraPac.

Nearly 580 jobs were eliminated at the ports in 2020 and 2021, "a huge, kind of staggering amount of job loss," according to Burns.

Schlarb has been a dock worker since 1991 and was the first woman to be elected business agent at ILWU Local 63. She describes her work as a "bittersweet job," because while she likes the position, it's clear to her that automation technology has cut many jobs from the port.

According to her, if LBCT were a conventional port, it'd have 138 crane operators and 69 signal people. But with automated technology, "the signal people were eliminated and now crane operators are down to 14 in a remote location."

Burns and Schlarb explained that job losses have a negative effect on the surrounding communities.

"They're the types of jobs where you can get health coverage, buy a house and maybe put your child through college," said Burns adding that "those types of jobs are extremely valuable for the region."

Schlarb said dock workers would pump their high wages into the local economy and if they would their jobs "that money is gonna start to dry up."

Ironically, Burns' research also found that automated ports were 7% to 15% less productive than nonautomated ports.

Schlarb's own experience backs up the findings. If cranes suffer mechanical failures, she said, or the autonomous ground vehicles lose their wireless network connection, for example, repairs are less seamless and disruptions are more severe than at nonautomated ports.

"Cranes go down quite often, and if one crane goes down, for a mechanic to safely enter, both cranes [in the specific bay] and other adjacent cranes have to be shut down too," Schlarb explained. "Now you've got thousands of containers within the two blocks while the repairs are being done. In a conventional operation, you would lose that bay where the crane broke down and that would have been only 30 containers."

Schlarb believes workers across the economy should be concerned about automation. Even as an automation coordinator, Schlarb doesn't believe automation is always the answer. "Just because you can advance something doesn't mean you need to," she said.

Some things work better the old-fashioned way.

"There is nothing more beautiful to watch than a group of longshoremen executing a plan," she added.

Edited by: Uwe Hessler

Copyright 2022 DW.COM, Deutsche Welle. Distributed by Tribune Content Agency, LLC.

Strikes sweep Britain as soaring inflation savages living standards

Anna Cooban - CNN

Workers in the United Kingdom have had enough of falling living standards.

Rail workers, journalists, lawyers, and postal workers have gone on strike in recent weeks to demand higher pay as inflation soars to its highest level in decades.

At least 155,000 workers are currently on strike, including staff at the country’s postal service, and engineers and call center workers for telecom provider BT (BTGOF). Two rail unions on Wednesday announced further strike action by 14,000 of their members later this month.

More strikes could be on the way this fall, threatening unprecedented disruption across a range of industries. Teachers, doctors and nurses are set to vote on strike action in the coming weeks. Unions could even coordinate their walkouts. Unite and Unison — the country’s biggest unions with 2.7 million members in total — are calling for others to join them in synchronized action.

It is one of the most significant waves of industrial unrest the United Kingdom has seen since the “winter of discontent” in the late 1970s when rampant inflation pushed workers to stage mass walkouts. About 7.9 million working days were lost between November 1978 and February 1979, according to the Office for National Statistics.


About 40,000 cleaners, signalers, maintenance workers and station staff walked off the job in June in Britain's biggest and most disruptive railway strike for 30 years. - Matt Dunham/AP

Soaring prices and years of stagnant wages are the backdrop to this year’s disputes. Consumer price inflation hit a 40-year high of 10.1% in July. Forecasters at Citigroup said last week that inflation could shoot past 18% at the start of next year, and Goldman Sachs thinks it could even hit 22% if gas prices don’t fall soon.

Workers are already feeling the strain. Average real wages, which account for inflation, fell by 3% between April and June, compared with the same period last year. That was the biggest hit to spending power in more than 20 years. Real wages barely increased in the decade to 2020.

And average household energy bills — which have already risen 54% this year — are set to increase by another 80% to £3,549 ($4,124) in October. According to estimates by Auxilione, a research firm, average bills could hit £7,700 ($8,949) next April — equivalent to a £642 ($746) monthly bill.

Workers are mobilizing in response.

‘Demoralizing’

The United Kingdom has “never seen [this] level of disruption across all sectors,” Chiara Benassi, an associate professor in comparative employment relations at King’s College London, told CNN Business.

In recent months, the cost-of-living crisis has acted as a “trigger” for widespread grievances that have been building up over a long period of time, she said.

“These strikes affect not only [what] we would say [are] manual occupations or low-skilled jobs that more evidently would struggle with the cost-of-living crisis, but also highly-skilled jobs like junior doctors, British Telecom engineers, barristers, academics, teachers,” Benassi said.

BT workers on strike over pay on August 30 in London, England.

 - Guy Smallman/Getty Images

Deepsha Agrawal, a junior doctor at Oxford University Hospital, told CNN Business that her colleagues are pushing for a bigger pay increase than the 2% the government agreed back in 2019.

“It’s quite demoralizing, because the current inflation rate is expected to go very high next year,” she said.

Her union, the British Medical Association, will soon ballot its members over whether to strike. Agrawal believes that they will. Many of her colleagues feel they cannot afford to buy houses or have children.

“[Junior doctors] are as hardworking and as educated as other professionals. We are struggling and we are paying a price out of our pocket to do the work that we do,” she said.

“With what happened during Covid, we should be rewarded for what we did, not punished for what we do every day,” Agrawal added.
Fewer union members

The current wave of industrial action cannot easily be compared to the 1970s and 1980s — if only because the government stopped tracking numbers of striking workers, and working days lost, during the Covid-19 pandemic. It recently started collecting data again, and will provide an update this month.

Richard Hyman, a professor of industrial relations at the London School of Economics, told CNN Business that this years’ strikes would pale in comparison to those of earlier decades simply because union membership has fallen so dramatically.

“Around about 1980, more than half the workforce was in a trade union. Today it’s less than a quarter, so there’s been a big decline,” Hyman said.

Strikes used to be concentrated in sectors which have “more or less disappeared” like coal mining and steel, Hyman added. Now, union membership is more heavily skewed towards the public sector, or big utility companies that used to be owned by the government.

“There’s been the rise in precarious work, so that a growing proportion of workers simply don’t have a proper job any more so are not in a position to go on strike,” Hyman added.

Benassi said that during the 1980s, when UK manufacturing industry was shrinking rapidly, strikes were often about the survival of key sectors.

Between 1984 and 1985, thousands of coal miners went on strike after Margaret Thatcher’s Conservative government threatened to close many of the country’s coal pits.

“[Today] it’s a bit different, because we are talking only about pay. Of course, the disputes at the time were also about pay but it was also about, for example, not closing down the mines,” she said.

More restrictions coming?

This year’s strike wave is significant, though, for the breadth of industries affected and because of the hoops UK workers have to jump through to down tools legally.

“Striking in the UK is very difficult. It’s way more difficult than anywhere in western Europe, especially after the Trade Union Bill in 2016,” she said.

The legislation, which came into force in 2017, made it much harder for unions to call a strike by requiring at least 50% of members to take part in the ballot, and at least 40% of the votes cast to be in favor of strike action. The law also increased the period of notice unions must give employers of their intention to strike from one week to two.

In comparison, Benassi said that neither a ballot nor a notice period are required in Germany.

Liz Truss, UK foreign secretary and favorite to succeed Boris Johnson as prime minister next week, has said she would bring in even tougher limits on unions’ powers to call a strike.


Waste overflows from bins during a strike by workers in Edinburgh, Scotland, on August 27. - Russell Cheyne/Reuters

She has proposed raising the support threshold for strike action from 40% to 50% of votes cast, and extend the notice period to a month.

“I will take a tough line on trade union action,” Truss told Sky News in July.

Liz Truss’ leadership campaign declined to comment when contacted by CNN Business.

“There’s quite an adversarial campaign from the side of the government to say well we’ll send agency workers to replace the workers on strike, or they should go back to work immediately, or there has already been a pay rise,” Manuela Galetto, associate professor of employment relations at the University of Warwick’s Business School, told CNN Business.

Despite the obstacles, workers may feel more emboldened to strike at the moment, given the tight labor market, she said.

UK unemployment was 3.8% between April and June this year, ONS data shows. That’s its lowest level in more than 50 years. There was also one unemployed person for every job vacancy — a record low.

“It means that many workers are in work and they are in a good position to ask for [a pay] increase. They cannot be easily replaced [at a macro level],” Galetto said.

41% of Black and minority workers in the UK are suffering racism on the job

Zayn Nabbi - CNN

More than two in five Black, brown and minority ethnic workers in the United Kingdom say they have faced racism on the job, according to a new study.

The 'toxicity' and 'loneliness' of #workingwhileBlack

Duration 4:23

View on Watch

41% of those workers “faced racism at work in the last five years,” according to a report published Wednesday by the Trades Union Congress, a federation of labor unions. The TUC says it is the biggest study into the issue ever conducted in the United Kingdom.

Among younger workers, the figures are even more troubling. About 52% of Black, brown and minority ethnic workers aged 25 to 34 years old reported suffering racism during that period, while 58% of those aged between 18 and 24 years old said the same.

Racist incidents included overhearing racist jokes, being subjected to stereotyping or comments about appearance, receiving racist remarks, or outright bullying and harassment.

For the report, researchers at Number Cruncher Politics conducted focus groups last year, and surveyed 1,750 Black, brown and minority ethnic workers between February and May this year.

The study also found that workers are reluctant to report incidents of racist behavior. About 44% said they didn’t report them because they “didn’t believe it would be taken seriously.”

And nearly half of all Black, brown and minority ethnic workers, or BME, said they had “experienced at least one form of discrimination consistent with institutional racism.”

Institutional racism — often defined as systems which perpetuate discrimination and bias in organizations — can include being unfairly disciplined or missing out on a promotion.

“This report lifts the lid on racism in UK workplaces. It shines a light on the enormous scale of structural and institutional discrimination BME workers face,” TUC General Secretary Frances O’Grady said.

“Many told us they experienced racist bullying, harassment — and worse. And alarmingly, the vast majority did not report this to their employer,” she added.

Responding to the report, Matthew Percival, the director for skills and inclusion at the Confederation of British Industry, said that the “data shows there is still a way to go in addressing racial and ethnic equality across society. Businesses must be doing all they can to build an inclusive workplace and tackle discrimination.”

The CBI is encouraging companies to report ethnicity pay gaps and set clear targets for improving BME participation at senior levels, Percival added.

A spokesperson for the UK government said: “Our inclusive Britain action plan sets out plans to build a fairer and more inclusive society, including promoting fairness in the workplace and action to tackle the ethnicity pay gap.”

U$A
Recession fears are rising. Why are people still quitting their jobs?

BY SYLVAN LANE - 

08/31/22 

THE HILL

Interest rates are rising, inflation is lingering at four-decade highs, the economy appears to be slowing and experts fear a recession is on the way. But Americans are still quitting their jobs at near-record rates in the face of growing economic uncertainty.

The percentage of American workers who quit their jobs set a record earlier this year and has only dropped slightly as the economy slows from two years of torrid growth. After reaching 2.9 percent this spring, the quits rate dropped to 2.7 percent in July, according to data released Tuesday by the Labor Department.

The idea of quitting a job amid a period of increased cost of living and a dubious economic future may seem counterintuitive. But the labor market has remained stacked in favor of workers, who see ample opportunities to boost their earnings to supplant increased costs from inflation.

“Despite recent declines, job openings still outnumber unemployed workers by a sizable margin, illustrating just how tight the labor market remains,” wrote AnnElizabeth Konkel, an economist at Indeed Hiring Lab, in a Monday analysis.

There were roughly two open jobs for every unemployed American, according to Labor Department data, giving job seekers ample opportunities to find new jobs with better pay or working conditions. Businesses are still scrambling to find enough workers to keep up with consumer spending — which is well above pre-pandemic levels — from a workforce that remains smaller than it was before COVID-19.

“It seems possible that employer demand would need to cool significantly more before recruiters start to notice an easing in recruiting conditions,” Konkel wrote.

In other words, employers still have too many open jobs and not enough candidates to avoid boosting wages and other perks to find talent. And that means workers still have ample incentive to quit for a better-paying job, particularly with inflation still high.

Job seekers on Indeed.com are looking for ever-higher wages, Konkel explained. The number of Indeed users seeking jobs with a $20 per hour wage rose above those seeking $15 per hour in June 2022, and the number of jobseekers looking for $25 per hour is up 122 percent over the past 12 months.

Konkel attributed the spike in job seekers looking for more money to the steady increase in advertised wages and the inflation they’ve helped to feed.

“Once job seekers know it’s possible to attain a higher wage, their expectations may shift and act as a pull factor in searching for a higher dollar amount. In this case, the shift in job seeker expectations from searching for $15 to instead $20 is clear,” Konkel explained.

“On the flip side, inflation continues to take a bite out of workers’ paychecks,” she continued, noting that only 46 percent of workers saw wage gains that outpaced inflation.


The pressure to quit for a higher paying job has been highest in the private sector, where 3.5 percent of the workforce left their current employer in July. Workers in industries with historically low wages, tough working conditions and limited teleworking options have led the charge.

The leisure and hospitality sector posted a whopping 6.1 percent quit rate in July, down sharply from 6.9 percent a year ago but still nearly twice the national quit rate.

Restaurants and bars in particular have struggled to return to pre-pandemic employment levels despite rapidly raising wages. The pressure has also made it nearly impossible for those businesses to fire or lay off employees, even amid usual season turnover.

“Hospitality companies tell us that what was once a ‘one strike, you’re out’ rule for employees who failed to show up at work without notice is now more like a ‘ten strikes, you’re out’ rule. They cannot afford to fire workers because they cannot afford to replace them,” said Julia Pollak, chief economist at ZipRecruiter.

“The decline in terminations in industries like hospitality have been so large, they have more than offset the increase in layoffs in the tech sector,” she explained.

Quits have also remained high in retail (4 percent) and the transportation and warehousing sectors (3.5 percent), with both industries facing threats from a decline in goods spending and rising interest rates.

Even so, there are some signs of waning worker confidence, which may lead to a decline in quits.

ZipRecruiter’s job seeker confidence index dropped 4.5 points in August to an all-time low of 97.8, Pollak said, with a greater number of applicants looking for job security over higher wages.

“Since the pandemic, job seekers have been looking for higher pay, less stress, and greater flexibility. In August however, job security rose to the second-place spot in their priority ranking,” Pollak explained.


“One in four employed job seekers say they feel less secure about their current job than they did six months ago. Rising risk of a recession, paired with a wave of recent tech layoffs, has made employees more concerned about the precarity of their jobs.”

Why Rich Guys Get Richer Off of Debt—While the Rest of Us Can Get Crushed by It

Drew Magary on how debt is still a grift for the well-off ten years after the financial crash.


BY Drew Magary 

GQ

 October 10, 2019

Photo Illustration/Getty Images

I am in debt. Hundreds of thousands of dollars in debt, to be a touch more specific about it. Four years ago, I took out a home equity loan, signed on the dotted line, and agreed to pay it off over the span of three decades. So far, I’ve been able to make my payments without much trouble, provided I don’t fire off a tweet down the line saying Hitler had some good ideas and thus sabotage my earning potential forever and ever. I am paying down my debt and enjoying my renovated home, just as the system intended.

But the system does not work this way for everyone. Hardly. Just as there is a massive income gap in America today, there is also a massive debt gap. There are people whose lives have been destroyed by student loans and who have been forced to serve out their existences in de facto peonage to those loans. And then you have rich fuckers like Jared Kushner and his father-in-law, taking on millions upon millions in debt (and that’s just the debt we know of) while still sitting pretty (at least for now). I'm in the middle—just a chump who doesn’t understand a single thing about the physics of debt beyond the standard bank loan my wife and I have currently taken out.

The catch is that I’m not REALLY in the middle. The system works for me as intended, but only because I make a nice amount of money. For people of lesser means, the system suffocates them instead of working the way it's supposed to, as it currently is for me. For people with obscene wealth, debt appears to be a cute little toy to play with. A luxury. For the poor, it can be an unbearable burden. So what I wanted to figure out was why this is. Beyond the obvious effects of income disparity, why are millions of Americans getting obliterated by relatively small debts while the rich can over-leverage themselves into infinity, seemingly without consequence if they fail?

To figure this all out, I took a crash course in econ basics from two people, which is two more people than I usually ask about such matters. The first is a close friend of mine, whom I will refer to as Jeremy here. Jeremy works in finance and asked me to keep his real name and his company anonymous so he doesn’t get fired. The second is associate economics professor Damon Jones, of the University of Chicago Harris School of Public Policy. Together, these two gentlemen explained to me why this system is the way it is, and why all debtors are not created equal. But before we can sort out how all this works, we have to go back in time a bit [Wayne’s World KOOKALOO KOOKALOO sound effect] to understand how our current loaning system came to be.

“I think a key question is: Why should society penalize people taking a risk and failing?” Jeremy said to me. Yep, that was what I wanted to know. To show me, Jeremy started to talk feudalism. “This is a very dramatic example, but I think it's useful. There was a time before the United States was formed where, if you were to borrow money from, like, the feudal lords and failed, they had things called debtors’ prisons. If you couldn't pay back the money, by hook or by crook, the feudal lord was going to extract from you one way or another. That had a very chilling effect on people's appetite to take risk. (Old) Europe was a much more hidebound society. There was a culture of being punished for failure. So I think that if you think of it in those terms, it explains how we got to where we are.”

It’s true. Debtors’ prisons lasted well past the feudal era, but were eventually outlawed in the U.S. nearly two centuries ago. And yet it still took until 1983 for the Supreme Court to rule that debtors couldn’t be jailed merely for being in hock. I’m sure that President Trump’s Supreme Court lapdogs will flush that ruling down the toilet days from now, but our present system was basically intended to democratize debt.

But this is a system devised and overseen by humans, and humans have a tendency to create monsters out of their own inventions. In fact, according to the ACLU, going to jail for debt is happening to Americans all over again. Companies and the politicians they control are pioneering ways of taking advantage of the debt system, and of the people trying to partake in it.

“The American Dream involves buying a single-family home,” Professor Jones told me. “One way to help facilitate that is to subsidize and make homeowner loans available to as many people as possible.”

That sounds good! Houses for everybody! BUT WAIT…

“These companies are going to compensate for that by raising the raising interest rate, and so that can backfire,” Jones continues. “They may drive interest rates so high that you price out a lot of people from the ability to afford a home.” And avoiding home ownership may be the SMART move, because as Jones notes, “Very low income people tend to have subprime borrowing, so interest rates potentially are more likely to be predatory.”

That subprime usury was the impetus for the economy cratering in 2008, and the Trump administration has feverishly chipped away at the protections that were established in the wake of that crash, laying the groundwork for predatory lenders to swoop in once more.

Indeed, if you have a super high credit score, the average interest rate on a personal loan falls between 10-13 percent. If you have a shitty credit score, that average interest rate triples. If taking out a loan is “renting money,” as Jeremy put it, your rent is too damn high if you’re struggling and too damn low if you are not.

But wait! We’re not done tilting the playing field. Professor Jones says that, “At a higher income level, there are ways to disperse that burden (of debt) a little bit more.” In other words, you can have other people borrow money for you. Perhaps you’ve heard of leveraged buyouts, a nasty and ought-to-be-banned practice in which a company can take out a debt to buy another company and then offload that debt ONTO the new company, inflating the value of their own portfolio while the asset is then stripped and left to rot from within.

That’s not a personal loan. You can engineer this sort of disaster and still come out of it with a squeaky clean credit rating. According to Jones, “If you are borrowing and then the company that goes bankrupt, it may not reflect on your record as it would if you had individual debt. When some airline goes bankrupt, the CEO isn’t going to have trouble finding getting a loan at the bank. Reputationally you take a hit, but people are able to rebound at that level peacefully.”

That's a key difference. You have a lot more freedom when the financial risks you take are ones made with other people’s money, and you can do so if you're a wealthy fella. You also have access to various tools to help strategize your debts and manage them. You have lawyers who know bankruptcy laws well or can negotiate debts down to smaller amounts. You have friends and colleagues and perhaps a rich uncle willing to lend you money at a decent rate or go in on a promising investment with you. You can spot investment ventures that will easily outpace your interest rate (like, say, the Chicago Cubs), so that your loan pays for itself and then some. You likely have a better education and can therefore more easily discern if you’re being scammed by a lender or by the investment venture in question. Hell, you're probably too white to be targeted by predatory lenders at all.

The freedom doesn't end there. Jeremy notes that you can form an LLC to borrow money, in which case your business becomes its own collateral, just like a home you’ve taken out a mortgage on. The bank then comes and takes all your car washes if you fail, but they don’t take YOU. And they don’t clean out the rest of your personal assets. At that level, debt becomes elastic, and there are multitudes of soft, downy cushions to catch you if you fall.

Jeremy says, “Debt allows you to do more than you could” with just your own resources. This is very much a good thing, but it is far more applicable to the Warren Buffets of the world than to the masses. As such, people at large are encouraged to pursue the kind of debt elasticity they can't really afford, and thus they have bigger eyes for debt than their bank accounts can withstand. When the President himself cries out that he loves debt, he’s encouraging you to follow his muse. Predatory lending practices are more than happy to sell you on the FREEDOM of debt in order to imprison you.

I asked Jeremy, does the current system entice people to over-leverage themselves more than they ought to, particularly student debt?

“Totally, yes.”

For those same masses, debt becomes less an opportunity than a need. You need a place to live? Debt. You need a car? Debt. You need to go to school so you can get a decent job? Debt. You sick? Hoo shit, you got debt coming your way. “A lot of people have debt for health care,” Jones told me. “And so you have to borrow in order to live. That is less of an investment approach and more about survival.”

It will not shock you to learn that lower income people tend to have more medical debt, not just because they lack the capital, but also because their maladies cripple their ability to pay off whatever they’ve borrowed to treat it in the first place. “It's not just the debt that is hurting you,” Jones says, “but the event that led to the need for that debt.”

Free time is also key to debt. If you're wealthy, you not only have access to all these tools for better managing your debt, but you can make that management part of your vocation, if not all of it. And it's a respectable vocation, arguably the most lucrative one in America today. Jeremy illustrates an example where some hedge fund dude can essentially spend all day overseeing his debts and investments, whereas a hairdresser trying to earn a living has to, you know, cut hair, and therefore doesn’t have as much time or energy to go scouting out potentially lucrative real estate deals. “I gotta use my hands,” he says of our hypothetical beautician. “There is a kind of a ceiling on what's reasonable that I can actually do.”

That is a true and generally acceptable aspect of the system at work. As Jeremy notes, we shouldn’t be a country that dramatically penalizes people for taking risks. And for the wealthy, we don’t. Ah, but for people who took the almost mandatory gamble on a college loan only to find themselves perennially in the red, and for Pennsylvania parents who were threatened to have their kids ripped from them (what is it with this country’s fetish for family separation?) because they couldn’t pay off a fucking student lunch debt, and for Florida felons who are now denied suffrage if they're delinquent in paying fines, those dramatic punishments are creeping back into the framework. And the punishment is far harsher for those taking on debt as a matter of need than those taking on debt to realize some grand business vision. America is heading back toward the Feudalistic system of debt punishment. I can’t believe I’m making sincere warnings about Feudalism the way wingnuts do when Bernie Sanders talks about free health care, but here we are.

And that is where my lesson in economics comes to an abrupt end. Everyone should be free to take risks, and everyone should be held equally accountable should those risks backfire, especially if they are not risks that our society has essentially made obligatory. I would say one way to level the system is to make all the obligatory expenses that currently goad you into debt—housing, education, health care—cost-free by raising taxes on the rich who love debt so. Only someone above my pay grade—and above Jeremy’s, and above Professor Jones’—can make that happen. But, as it stands now, that someone is a man reluctant to change a system that, as far as he can see, offers him endless financial possibilities thanks to the miracle of freewheeling loans.