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The Grocery CEOs Visit Parliament
The House of Commons Agriculture and Agri-Food Committee recently invited the CEOs of Canada’s three largest supermarket chains (Loblaws, Sobeys, and Metro – who together control around two-thirds of all food retailing in Canada) to testify as part of their inquiry into food inflation.
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We Need More Goods, not Less Money
In this commentary article, originally published in the Toronto Star, Jim Stanford challenges the adage that inflation results from ‘too much money’ in the economy. In fact, the current inflation – sparked by the repercussions from lockdowns and other supply disruptions during the pandemic – clearly indicates the problem is too few goods. That requires a very different approach to managing rising prices.
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The False Doctrine of the ‘Labour Shortage’
A common argument that Canada faces a severe ‘labour shortage’ is being invoked to justify regressive policies in many areas: including higher interest rates, record-high (but exploitive) immigration programs, and pushing back the normal retirement age. In this column, originally published in the Toronto Star, Centre for Future Work Director Jim Stanford shows that Canada has not ‘run out’ of workers. Forcibly creating a cushion of surplus labour (through policies to compel labour supply or restrict labour demand) will make life easier for corporate HR managers. But they will undermine the life changes of millions. Humans are not Widgets, and we aren’t in ‘Short Supply’ By Jim Stanford Busy people…
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Stanford for Agriculture Committee on Food Prices and Profits
The Centre for Future Work’s Director, Jim Stanford, appeared as an invited expert witness before the House of Commons Standing Committee on Agriculture and Agri-Food on February 13, as part of the committee’s inquiry into food price inflation. Here is the formal submission Dr. Stanford tabled along with his testimony. The evidence was based on analysis of Statistics Canada industry-wide data on revenues and profits in the broad food retail sector. The data confirms that aggregate profits have doubled since pre-pandemic norms, profit margins (relative to total revenues) have increased by about three-quarters, and that the real quantity of groceries purchased by Canadians has been shrinking in the face of…
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Is the Economy “Hot”? Or is it Cold, and Getting Colder?
The Bank of Canada is widely expected to increase its policy interest rate again this week, for the eighth time in the last 10 months. Media and financial market commentary on its decision has made numerous throwaway references to how Canada’s economy is still “running hot,” and that i why a rate hike is needed. This common claim is surprising, and not consistent with economic evidence. Canada’s economy is not “running hot” by any concrete measure. Here are six: Final domestic demand in Canada has been weakening for over a year, and was shrinking in the third quarter of 2022 (latest data). Were it not for the export sector (with…
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Profits, Not Wages, Have Driven Canadian Inflation
Every January, the Globe and Mail newspaper publishes a fascinating set of charts (curated by journalist Jason Kirby) prepared by Canadian economists, with their insights into economic trends likely to shape the following year. Centre for Future Work Director Jim Stanford was invited again to participate in the collection. He submitted the following chart and text, highlighting the dramatic increases in corporate profits in Canada that have been the dominant distributional outcome of recent inflation. In recent months, the Bank of Canada has focused on the labour market as the main culprit behind higher inflation: The unemployment rate is too low, wages are rising too fast and this so-called “overheating”…
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When Will We Learn? Speculation is no Way to Build a Real Economy
History repeated itself last year in financial markets: several high-flying ventures that once generated a frenzy among financial speculators, came crashing back to earth in the face of higher interest rates, fears of recession, and a rush to the exits by more prescient investors. In this commentary, originally published in the Toronto Star, Centre for Future Work Director Jim Stanford reviews five speculative bubbles that popped in 2022. The most dangerous, from a macroeconomic perspective, is the accelerating downturn in Canadian housing prices – as rising debt charges squeeze prospective buyers. A major downturn in housing will have big impacts on real employment and spending. The common lesson from these…
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Economic Outlook for 2023: Soft Landing or Hard Impact?
In this year-in-review column, originally published in the Toronto Star, Centre for Future Work Director Jim Stanford reflects on the turbulent economic events of 2022 – dominated by the rise of global inflation, and a dramatic shift in monetary policy in Canada and many other countries. The outlook for 2023, unfortunately, will likely be determined by the side-effects of that harsh monetary policy medicine. Workers are Being Sacrificed to a Doctrine that Intentionally Keeps Unemployment High by Jim Stanford Economic events during 2022 were dominated by the rise of global inflation, surging to the fastest pace in decades. Economists had thought this spectre was long dead and buried, after years…
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CBC Podcast on Power, Profits, and Inflation
CBC’s top-rated podcast series, Front Burner, recently featured a 30-minute interview with Centre for Future Work Director Jim Stanford on the continuing debate about whether corporate profits have contributed to recent Canadian inflation. The interview responds to recent claims of supermarket CEOs (in their appearance before a Parliamentary inquiry) that their profit margins on sales are modest and stable. In fact, compared to pre-pandemic norms, profit margins have grown by about three-quarters – and the mass of after-tax profits collected in the food retail sector has more than doubled. The podcast also considered the role of record profits in driving painful price increases in other sectors of the economy, too:…
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Yes, Virginia, Supermarket Profits HAVE Increased
The following commentary was first published by Centre for Future Work Director Jim Stanford at the Progressive Economics Forum’s blog site, and then republished by Heterodox Economics Blogs and covered by rabble.ca. Supermarket executives were up on Parliament Hill last week, appearing before the Standing Committee on Agriculture and Agri-Food’s inquiry into food inflation grocery chain profits. They repeated the now-familiar argument that supermarkets have not caused food inflation, they have merely passed along higher input costs to their customers; their profit margins have been stable, it is claimed. Don’t believe them. Here are a few data points on the argument that the chains haven’t actually profited from inflation, since their…