The stock market and the Daily Bread Food Bank

"Feed their hopes, but give them only just enough to keep them from despair," Maxims and Reflections of Francesco Guicciardini (1483-1540).

Wal-Mart stock dropped 3 percent after the company announced wage increases for their U.S. employees. An hourly salary of  $8.78 will increase to $10 sometime next year. No word if this largesse will be shared with Canadians.  Even if it does, it will not keep Wal-Mart employees from visiting the Daily Bread Food Bank.

It's ironic that certain Wal-Mart outlets contain drop boxes for the Food Bank. Ironic because it is Wal-Mart employees who are forced to use that service. Customers who  donate to those boxes are in effect subsidizing Wal-Mart starvation wages, and if the donated food was purchased at Wal-Mart, to  improving the company's profit margin.

All this inspired the revival a blog post of June 9, 2008: "Stock market promotes class warfare." Here it is:

Several years ago, the error-prone Canadian Imperial Bank of Canada (CIBC) negotiated a financial arrangement with the ill-fated Enron Corporation. "In order to extract itself from an Enron-related class-action suit, CIBC would concede a US$2.4-million settlement, the largest one-time charge ever taken by a Canadian bank, " according to The Financial Post of June 2006. CIBC maintained this in no way admitted any wrong-doing. (Do they enjoy giving away their money?)

This news was delivered to CIBC shareholders by Gerald McCaughey to whom had just been passed the CEO's mantle "from the singed fingertips of John Hunkin" who signed the Enron deal while enjoying a salary of $29.5-million (Report on Business, October 2006). To help re-coup some of this loss, McCaughey "took the axe to 950 managers, including 50 executives." This contribution to the unemployed garnered shareholder praise.

McCaughey's action threw 950 breadwinners on the job market, while Hunkin retired "with approximately $52 million in stock and securities" (The Globe and Mail, August 5, 2005).

On one side of the financial divide, we have the bank shareholders demanding even more bloodletting in order to enhance share value. On the other side, we have almost a thousand newly unemployed, one of whom may be you or your neighbour. In one house, we see a shareholder cheering while next door the family of a former banker worries about the mortgage and the cost of the children's education.

On the national scene, we see share value increasing as unemployment increases. It signals to employers greater competition among the unemployed for the jobs they offer. The temptation to take advantage of the situation is too great in the face of shareholder demands for greater profits. It means lower wages, fewer benefits, and worse working conditions for employees.

Internationally, we see large corporations moving offshore in order to realize lower costs and lower taxes. Again shareholders cheer as their own domestic economic base disintegrates.

Hedge fund investors speculate on the price of oil in the hope that tropical storms will strike the oil rigs in the Gulf of Mexico thus reducing oil availability. They cheer unrest in the Middle East. That too increases oil prices. [2015 note: Current low oil prices are due to Saudi Arabia politics, not economics.]

Much of the stock market is based on harm to a large segment of society for the benefit of the minority of investors who profit from injury to their fellow citizens.

As these scenarios multiply across our economy, we have the seeds of class warfare. The very nature of the stock market pits one element of society against the other.

"Modern societies are conflictual: class against class, interest against interest, men against women, workers against employers. In this, Marx was deeply right."  -- Michael Ignatieff, The Rights Revolution.

Corporate Conscience?

What ever became of Sundays?  The former "day of rest" and family get-together is being destroyed by big business. Employees of banks, supermarkets and big box stores are forced to work on Sundays, and at the same pay as for week days. If the worker does not like that, the employer points to the lines of unemployed knocking at the door, people who would take jobs on any terms the boss dictates. Big business thrives on big unemployment. It thrives on rendering voiceless employees wanting to present a united front against exploitive conditions. It allows corporate bosses to play off one element of society against the other, with the result we are all losers, except the short-term gain by shareholders and bonuses for the bosses.

It is estimated that up to 300,000 people currently work unpaid in some of our largest and wealthiest corporations. The Toronto Star reports on the exploitation of interns (Interns decry all work and no pay, March 3, 2014). The article tells of university graduates working at no pay for a variety of companies such as a Toronto-based think-tank, certain marketing companies, the Fairmont Waterfront Hotel in Vancouver, Bell Canada and untold others.

The interns are warned that if they refuse unpaid work including overtime of up to 60 hours a week, they will not get a reference. This blackmail works. Corporations get labour at no cost, all in the guise of giving young people business experience. They render benefit to the company, a benefit that deserves pay, including benefits.

Anyone who deposits food in the collection bins in the the big box stores is, in effect, subsidizing the store. Low salaries force their staff to frequent food banks, to retrieve the food purchased from their employer who has made a profit from its sale.
  

The Law versus Public Interest

We, "the great unwashed outside the law" continue to marvel at the "entanglements of the law".

The current case in point concerns a company that polluted the ground, and then vacated the site. A court said the the public must pay the estimated $50-100 million to repair the corporation's damage to the environment.

In its decision, seven of the nine Supreme Court of Canada Justices bowed to the legal mumbo-jumbo that lets corporations hide behind the law, regardless of public interest.

The Court majority ruled that the province of Newfoundland and Labrador must get in line with other creditors, and share in whatever may be left in the coffers of insolvent AbitibiBowater Inc. In other words, public interest -- the taxpayer -- has no more status than corporate debtors.

One of the Justices wrote, "[T]he province's position would result not only in a super-priority, but in the acceptance of a 'third party pay' principle".  Absolutely correct, and that would be a good thing.

The law must be reformed to establish a common sense hierarchy for the droppings of fugitive corporations. The first claim on the remaining assets belongs to workers, regardless, whether in the form of wages, pensions or other entitlements. Next in line is the tax-paying public as represented by the government. After that, the banks and other corporate lenders. At the end of the line are shareholders.

Note. "The great unwashed outside of the law" was how a law school dean once described to me his opinion of the  general public. "Entanglements of the law" was Winston Churchill's description of the law process.

Feb. 2, 2013.  In the unrelated case of Indalex Ltd., the Ontario Court of Appeal ruled that the pensions of the firm's retirees were entitled to a share of the the remaining assets.This, because the company had breached its duties to its retirees by failing to keep its pension plans fully funded, and failing to give proper notice that it was seeking bankruptcy protection.

The Supreme Court of Canada (SCC) did not like that decision, and reversed it on the grounds of hardship for the company to re-define itself. While some lawyers cheered this socially immoral decision, another described it as "leaving more room for potential abuse of the bankruptcy system."  A former Indalex executive, whose pension was cut in half by the SCC claimed, "To allow this pension plan to be underfunded  is an indictment of the whole system."

The same might be said of former employees of the late Nortel Networks Corp. who were left with little after the firm went bankrupt due to corporate malfeasance for which no one was punished except employees and shareholders.

Worker Oppression Continues

"We appreciate our staff" bragged the banks in the 1940s, when they closed their branches on Saturdays. Banks then operated six days a week. With the new policy, employees enjoyed a full weekend.

Sometime in the 1970s, the banks withdrew staff appreciation, and replaced it with Saturday service "for customer convenience". 

In February 2011, the banks announced Sunday openings.  Research showed that "customers were looking for banking hours to better suit their lifestyle", TD-Canada Trust half-apologized.  "Being open Sundays is about working around peoples' lives."

In its current ad campaign, TD proclaims, "Banking can be this comfortable".   Perhaps, but not for staff whose family weekends have been destroyed.   Six days a week, evening hours and 24-hour ATMs are not enough for customer lifestyles?  

With high unemployment, jobs, salaries and benefits are at the discretion (read mercy) of corporate bosses.   Bank employees no longer receive extra pay for weekend work.   What's to complain?  Staff will enjoy their Tuesday-Wednesday week.  That's just great for family weekends. 

TD chief executive Ed Clark worries about bank costs. "Politically it's difficult" to raise fees," he contends. His gaze drifts to his staff.  But fear not.  "We are not going to do this on the backs of the average employee," he promises. Is he aware that that's how the did it in the recent past? One suggestion might be to close operations on weekends, and return staff to their families. Clark's fear was not shared by CIBC who have just announced a banking fee increase.

September 2011 brought word that Loblaw Companies, the grocery people, would also destroy employee family weekends.  Staff must work Sundays at regular pay.  If they object, they are told their replacements are knocking at the door.   

John Steinbeck's masterful The Grapes of Wrath is not history but contemporary -- the business plan where the unemployed are played off one against the other, or the under-paid against those at the door.  Comes to mind Target's take-over of  Zellers whose former staff were invited to apply for their old jobs  at reduced salaries.

The August 2011 issue of Harper's magazine reported that 75 per cent of the increase in US corporate profits since 2001 has come from depressed wages.  Doubtless, the same holds true for Canada.  This explains the gap between the rich and the working poor.

In the 1950s, my father worked for the Loblaw Companies.  He was told to work on Saturdays or be fired. He quit, and soon got another job.  In today's world of downsizing, rationalizing, part-time or temporary work, low wages, and no benefits, workers no longer enjoy the freedom of earlier generations. 

When my generation finished university in the fifties and sixties, companies invited us their their hospitality suites to explain their employment benefits.  All that changed in the seventies and eighties.

As our standard of living declines, corporate profits soar.  Trickle down is code for urinated on.

Formerly, it was called the Personnel Department where humans were deemed persons.  Now it's Human Resources on the same level as Natural Resources, that is, something to be exploited. Humans have become commodities. Dare we fear the next stage of this degradation -- employees described as human cargo or livestock? 

Pope Benedict XVI described this situation in its most brutal form:  "Man is nowadays considered in predominately biological terms or as 'human capital', a 'resource', part of a dominant or financial mechanism." 

 The sword of Damocles hanging over our world is not the atomic bomb; it is the depersonalization of man. -- Anton Pegis,  The Wisdom of Catholicism.

Corporations: Invest or Pay Back

Email to the Toronto Star, August 3 2012. Unpublished

In his Opinion Piece, Reid Rusonik raised many significant points (Where bullets won't fly this summer, Aug. 2). I was particularly distressed to learn that corporations which were given tax concessions are merely sitting on the extra income. These corporations now have cash holdings equal to our national debt.

It was these same corporations that once begged and pleaded that lower taxes would motivate them to invest. Canadians are waiting for those investments. This money must be invested or returned to taxpayers for whom such concessions amount to subsidies, that is, corporate welfare. This money can be recouped by a 100 per cent claw back on the amount of the lowered tax. 

In the hands of citizens, this same money would immediately circulate through the economy, resulting in expansion and lower unemployment.

Revloution Coming

The current policy of bailing out troubled banks worldwide is not sustainable.

In Ireland, the government used  a European bailout of $64 billion to save their banks. The hook in the arrangement meant austerity for the population -- a lower minimum wage, cuts to health care and pensions, and rising fees and taxes. The result has been higher unemployment and a stagnant economy.

This is precisely the type of economy the banks convinced the government would happen if they were not bailed out. The cash infusion made no difference to the economy. Bankers are richer.

The net result -- bankers survive, likely awarding themselves fat bonuses for their brazen salesmanship. As the chill descends on the people, bankers are laughing all the way to the bank, as it were, and all the way to their yachts in the sunny Mediterranean.

Contrast this with Iceland where the government allowed its three major banks to fail. The economy is improving, unemployment is down, and some bankers will be charged criminally.

It won't belong before citizens on the Continent see the folly of their politicians supporting the rich by burdening the poor. It cannot last. They will revolt. It will not be nice.

Nortel and Employee Benefits

"Disabled Nortel workers suffer again," states the headline. The report is about how, yet again, employees of that fallen electronics giant are dispossessed of their entitlements.

Employee wages and benefits must rank first in line when a company's assets are sold off. To deprive, however legally, a worker of his due is a wrong that cries to heaven for vengeance. No similar treatment awaits investors' losses. The law must be changed to put workers first.

P.S. Criminal action against those who destroyed the company ended when the court found them not guilty.

Citizen Pays for Corporate Incompetence

On December 1, Ontario Hydro One deducted $11,907 from the pre-authorized bank account of a customer. The normal deduction was $477 per month. Since 2008, Hydro One had failed to read the electricity meter on the client's second property. Without the courtesy of a notice, this bureaucratic giant scoops up all the money it feels owing.

But hold on. The public deserves protection against corporate incompetence. The government (provincial? federal?) must decree that all such services must be invoiced within three months, otherwise the claim for payment becomes void. Lawsuits have a statute of limitations. Why not service charges?