Sears collapse another reminder income inequality also a Canadian problem | National Union of Public and General Employees

Sears collapse another reminder income inequality also a Canadian problem

“When stores catering to middle class Canadians are disappearing rapidly, it’s a sign the middle class is being squeezed” — Larry Brown, NUPGE President

Ottawa (13 Oct, 2017) — The announcement that Sears Canada will close all of its stores is a reminder that income inequality is a problem in Canada.

In both Canada and the United States, retail chains like Sears Canada that catered to middle class Canadians are in difficulty or changing fast. Eaton’s and now Sears are gone. Hudson Bay Company is moving up market. The stores that are doing reasonably well are discount stores and stores catering to the well-heeled.

This flies in the face of what many of those trying to minimize the problem of income inequality are claiming. They would like us to believe that, income inequality is only a problem in the United States – and therefore we don’t need to do anything in Canada.

“When stores catering to middle class Canadians are disappearing rapidly, it’s a sign the middle class is being squeezed,” said Larry Brown, President of the National Union of Public and General Employees (NUPGE).

Conservative think tanks still pretending there’s no problem

The share of assets held by the very wealthy is steadily increasing in Canada. Just 2 families have as much wealth as the poorest 11 million Canadians combined. The rich 10 per cent of Canadians own almost half the assets in the country. Still conservative think tanks and other supporters of austerity are trying to claim income inequality isn’t a problem in Canada. Instead, they cherry pick statistics or use the fact that things aren’t as bad as in the United States to claim we don’t have a problem with income inequality in Canada.

Behind the attempts by conservative think tanks to claim income inequality isn’t a problem in Canada, is opposition to what needs to be done to reduce income inequality in Canada.

“To reduce income inequality, the wealthy and large corporations need to pay their share in taxes so we can afford to improve the public services that middle and low income Canadians rely on. That means a lot of wealthy people and large corporations will have to pay a bit more in tax. We shouldn’t be surprised when the think tanks they fund try to come up with reasons why large corporations and the wealthy shouldn’t have to pay their share,” said Brown.

Short-term profiteering also contributed to the Sears collapse

Sears faced challenges as a result of the middle class being squeezed, but what may have fatally damaged the company was short-term profit taking by a hedge fund that controlled the company. Shareholders were paid hundreds of millions in dividends at a time when the company was already in difficulty. That was money that could have been used to get back on its feet.

Ironically, given the dependence of Sears on a financially secure middle class, short-term profit taking by wealthy investors is one of the reasons the middle class is being squeezed. There are far too many examples of middle class jobs being eliminated because wealthy shareholders insisted companies spend money in ways that made them richer, while undermining the long-term health of the company.

 


NUPGE

The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 370,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. — NUPGE

 

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