Corporate greed as a driver of inflation

Tiff Macklem, the Governor of the Bank of Canada, recently urged employers and business leaders to refrain from building inflation into wage negotiations; in effect he urged employers and business leaders to not pay workers more. With all due respect to Mr. Macklem, the Governor of the Bank of Canada should not be making statements like this publicly. The role of the Bank of Canada is not to provide advice to companies on their business decisions, but rather to formulate monetary policy and to promote a safe and sound financial system in Canada.

Mr. Macklem’s statement is based purely on looking out for the best interests of the people in his class; corporations, elites and upper-class people. It is so easy to point out factors like raising minimum wage, CERB, paying teachers, nurses and working-class people more as causative agents of inflation but very little attention is ever paid to the abject and blatant corporate greed which has been shown to be a far larger contributor and driver of inflation. Inflation is defined as the rise in general level of prices of goods and services. It is peculiar that inflation is always referred to in a passive voice rather than an active voice. Prices do not just rise, prices of goods and services are not fundamental laws of the universe. They are created and decided by corporations and businesses. Corporations make conscious choices to raise their prices.  

The idea that working-class and middle-class workers are causing inflation by wanting and demanding more money is ludicrous. Based on data from Statistics Canada, Canadian wages increased by 5.2 per cent, while inflation was at 7.6 per cent in July 2022. This means the average person has lost money in 2022 as their money is worth less. On the other hand, as corporations have raised prices on their goods and services, there have been reports of record profits. In the first quarter of 2022, corporations in Canada have posted a record after-tax corporate profit share of 18.8%. This is clear evidence that corporations are making more money than ever while consumers are paying higher prices than ever. It is asinine for Mr. Macklem to shift blame to workers and make it appear as if it is workers’ demands for higher wages that is the main contributor to inflation.

Further evidence of the insidious role of corporate profiteering in causing this affordability crisis is found in an independent investigation conducted by the Toronto Star. The investigation found that Canada’s 3 largest supermarket chains are actively profiting from inflation; Loblaws Companies Ltd., Empire Company Ltd., and Metro Inc are reporting higher profits. Their investigation into the financial statements of these companies suggest that they are raising prices more than they have to. These companies are passing along the increases in costs in addition to unnecessary further increases in prices to consumers which is driving higher profits. While corporate greed is not the only factor responsible for inflation, it is worth bringing to light that rarely do most people talk about or are even aware of how large of an influence corporate greed has on inflation and ultimately the average person’s cost of living.

If you are earning between $0 to about $130,000 per year as an individual or between $0 to about $250,000 per year as a household, and you live in the GTA, your economic interests are far more aligned with the people in these income brackets than they are with people making hundreds of thousands or millions of dollars. In Ontario as a whole, I would estimate the same figures for individuals to be $0 to $100,000 per year and for a household to be $0 to $200,000 per year. I have made these estimations based on Statistics Canada’s income reporting statistics and anecdotal experience of living in the GTA. Some people may be aghast at these figures, but the reality is, based on housing prices, high inflation, and cost of living, these figures are representative of the new middle class and working class. Making $100,000 today in 2022 is nowhere near making $100,000 in 1996 when the Government of Ontario introduced the sunshine list; in fact, $100,000 in 1996 would be equivalent to $172,000 in 2022 which would put an individual well in the top 10% of income earners.

This is not to lessen in any way the plight of many working-class people in the GTA and across Ontario who are struggling to pay rent, juggling multiple jobs or are unable to work at all due to disabilities. On the contrary, I am arguing that the interests of middle class and working-class people are far more aligned than they are with the interests of people in the top 5% or 10% of income earners. Working-class and middle-class people should work together to look out for each other’s best interests. They should not fall for the tricks and deceptions of corporations, elites and upper-class people who actively try to foment division and hatred to pit working-class and middle-class people against each other so we lose sight of how badly we are all being ripped off. Blaming working-class and middle-class people as a cause of inflation is just the latest example of this.

To a degree, we all aspire to be members of the elite and upper class in society or at the very least to attain that level of financial freedom and success, but it is this desire that blinds us to our own present reality. In aspiring to be one of those people, in hoping and expecting to get there one day, far too often we oppose policies that would actively be in our best interests simply because of the anticipated future corollary of said policies which may or may not affect us one day. We do this by routinely and repeatedly electing officials to office, who dangle low hanging fruits to get our votes, but in truth are actively acting against the best interests of the working-class and middle-class people.

Doug Ford came to office by promising no new taxes, and vague claims about making life more affordable. However, in reality, he cut many services and programs, most notably significant funding to education and healthcare. We are now starting to see the disastrous effects of underfunding the healthcare system as emergency departments are forced to close down and countless people are forced to unnecessarily endure health problems. Justin Trudeau campaigned on closing tax loopholes that exclusively benefit corporations, elites and upper-class people in addition to making housing affordable. However, as of 2022 he has not fulfilled his promise regarding tax loopholes and I do not expect him to as long as he remains in office. In terms of housing and affordability, both factors are absolutely through the roof over the last 5 years. Granted, these 2 individuals are not solely responsible for nor did they solely cause the housing and affordability crises, however, the evidence shows that they clearly did not do enough to avert or lessen these crises that by and large affect the working-class and middle-class people.

These are yet more examples that our governments are not representative of the population; there is a major class divided between the rulers and the ruled which has been deliberately created by fomenting distrust, division and hatred between working-class and middle-class people. Our politicians, and leaders for the most part, no matter how much they rail against the elites, as has become the new trend, are in large part the very elites they are pretending to fight against.  

I am not anti-conservative or pro-conservative nor am I anti-liberal or pro-liberal. I am simply for enacting policies that significantly benefit the average person, the working person, the middle-class person. Working-class and middle-class people make up most of our society and shape most of our lives. It logically makes sense to have a government that truly looks out for the best interests of the people and enacts policies that are representative of the people and benefit the people.