Stock buybacks are "toxic to productivity, they're toxic to wages, they're toxic to the prices that consumers pay"
This week, nearly 4,000 Metro grocery stores workers in the Greater Toronto Area will enter the second month of their strike. The sticking point is wages: they would really, really like an extra $2 an hour, akin to the “hero pay” they got in the early days of the pandemic.
So far, Metro has not entertained that, even as the company has unveiled “massive” profits and seen fit to sharply jack up compensation for executives. But there’s another indication that the company may have more cash on hand than it knows what to do with — one that hasn’t been discussed or reported on to nearly the same extent.
Last year, Metro spent $470 million on buying its own stock. The other major grocery chains, Empire and Loblaw, spent $248 million and $1.2 billion on buybacks, respectively. The economist Jim Stanford, the director of the Centre for Future Work, estimates that for half that amount, the three companies could have given each of their workers an extra $2 an hour and still have had a billion left over for buybacks.
On this week’s CANADALAND, Cherise Seucharan explains just what the heck that all means and why, even in the best of economic times, some economists still consider stock buybacks to be a highly questionable (albeit totally legal) business practice.
It seems pretty popular. What better way to prepare for a recession?
[TD] announced a plan to buy back 90 million shares, or about 4.9 per cent of outstanding shares, after it just completed a 30-million share buyback program.
At this point, regardless of which company it is, it’s pretty much guaranteed the big grocer chains are acting in bad faith and are at the heart of a lot of economic issues for low and mid-wage Canadians.
I think the answer starts with breaking up vertical monopolies and making sure that acquisition and distribution of goods between stores is competitive and I think it ends with parts of the supply chain becoming crown corporations.
People can sit there and complain about the LCBO ask they want, but the buying power and distribution abilities they have could go a long way for Ontario or Canadians in general for food as well. I’d rather have that savings and money going back into the our pocket then Gaven fricking Weston.
American companies did this too. They got trillions of dollars in covid relief funds so they wouldn’t need to lay people off during a pandemic. They took that money and made huge stock buy-backs, and laid their employees off.
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It seems pretty popular. What better way to prepare for a recession?
They mentioned in the episode that pharma companies were also big into this so I looked into it and lo and behold.
At this point, regardless of which company it is, it’s pretty much guaranteed the big grocer chains are acting in bad faith and are at the heart of a lot of economic issues for low and mid-wage Canadians.
I think the answer starts with breaking up vertical monopolies and making sure that acquisition and distribution of goods between stores is competitive and I think it ends with parts of the supply chain becoming crown corporations.
People can sit there and complain about the LCBO ask they want, but the buying power and distribution abilities they have could go a long way for Ontario or Canadians in general for food as well. I’d rather have that savings and money going back into the our pocket then Gaven fricking Weston.
In the US stock buybacks were illegal and seen as market manipulation until 1982.
Thanks, Obama. He was president then right?
American companies did this too. They got trillions of dollars in covid relief funds so they wouldn’t need to lay people off during a pandemic. They took that money and made huge stock buy-backs, and laid their employees off.