A record labor shortage and rising wages may seem like good news for workers, but union leaders say employees aren’t really benefiting from corporate earnings amid skyrocketing inflation.
Canadian Labour Congress President Bea Bruske says workers are feeling the effects on their finances of the rising cost of living.
The year-over-year inflation rate in Canada was 7.6% in July, while wages rose 5.2% over the same period.
Meanwhile, Bea Bruske says companies in sectors like oil and gas have posted record profits.
Addressing this imbalance, she says, is one of the priorities of the labour movement in the future.
“It’s about making sure we’re actually responding to the affordability crisis by fighting inflation and asking governments to look at the huge profits that many employers are reaping right now,” Bruske said.
The New Democratic Party (NDP) has urged the federal government to extend the windfall profit tax, which already applies to financial institutions, to also cover oil and gas companies and big-box retailers.
But some economists fear that these taxes will scare away business investment.
According to an analysis conducted by David Macdonald, Senior Economist at the Canadian Centre for Policy Alternatives, corporate after-tax profits reached a historically high percentage of the Total Output of the Canadian Economy in the second quarter of this year.
In contrast, David Macdonald found that workers’ compensation as a share of gross domestic product tended to decline, falling to the lowest level since 2006.
“It’s pretty clear that we’re having record profits and a record proportion of our economy is going to corporate after-tax profits rather than workers’ wages,” Macdonald said.
The economist says the current windfall profit tax is “very limited” and suggests extending it to the entire corporate sector.
Ottawa and District Labour Council Chair Sean McKenny says some businesses have undoubtedly been impacted by the COVID-19 pandemic, but seeing some companies’ high profits has been frustrating for workers.
“It bothers workers in general because, again, the fairness is not there,” McKenny said.