Corporate activism as a business power play

Coles has been competing with Woolworths to be the ‘most inclusive employer for LGBTQ+’.

On May 18, Coles announced it would offer all employees 10 days of paid leave to go and change their sex. Euphemistically named gender affirmation leave, the policy is described as “an important step for Coles’ commitment to Champion LGBTQI+ inclusion in the workplace and further into the Australian community”.

In the same media release Coles announced it would be sponsoring Pride Cup Australia, a non-profit organisation that, among other things, lobbies for the inclusion of trans athletes in women’s sports.

While Coles has been competing with Woolworths to be the most inclusive employer for LGBTQ+, both companies have been underpaying their staff.

In December last year, the Fair Work Ombudsman launched legal action against Coles alleging that the supermarket giant underpaid 7500 salaried employees to the tune of $115m. And Woolworths – which also offers paid sex-change holidays – is being investigated for underpayment of salaried employees of $517m, the largest case of underpayment in Australia’s history.

At first glance it may seem nonsensical that such companies have been awarded gold and platinum tier status by organisations such as the Australian Workplace Equality Index while being sued by the Fair Work Ombudsman for underpaying their staff.

But this is essentially what woke capitalism is all about. With a sleight of hand, equality no longer means economic equality or equality before the law. Today, equality refers to special privileges for a specific identity group to the exclusion of others.

Between the two of them, Coles and Woolworths control 65 per cent of the market share in Australia’s grocery sector, a sector worth more than $100bn a year. The third biggest grocery supermarket is Aldi, with about 10 per cent of the market share, and IGA with 7 per cent.

It is not a coincidence that the companies leading the charge to implement the wokest workplace policies are those that dominate their competition. In Australia, the wokest corporations are those that have more than 50 per cent of market share, such as Qantas, or those that operate in quasi-oligopolies, such as the big four banks or the big four consultancy firms.

Economists know that in an oligopoly rivals watch each other closely and often implicitly or explicitly collude to retain their market share and maximise their revenue. One way in which corporations retain their market share is by creating very high barriers to entry for new businesses. For example, if one wanted to open a chain grocery store in Australia, it would be extraordinarily difficult to compete with Coles or Woolworths on the variety of products they sell and their geographic ubiquity. It would take hundreds of millions of dollars of investment just to make a dent.

Woke policies are just another method by which the biggest players retain their dominant position.

It may seem counterintuitive that big companies would self-impose layers of bureaucracy and human resources administration for social issues that have nothing to do with their key products or mission. But it makes more sense when you realise these companies eventually expect their competitors to operate with these same burdens. It is just a fact that smaller companies simply cannot bear the same financial and administrative burdens as larger companies, so it shouldn’t be a surprise when our biggest companies push for them.

If you are a giant corporation making billions of dollars in profits every year, you have the capacity to absorb some pain. When the big four banks and big four consultancy firms lobby for all companies to have gender targets, diversity targets and other targets that are not related to productivity metrics, one could argue they are implicitly undermining their competition.

In this way, the woke agenda and corporate capitalism are a match made in heaven. The world’s largest corporations can market themselves as socially progressive while consolidating their power through anti-competitive business practices.

Peter Dutton’s instinct to move the Liberal Party away from big business to refocus on supporting and reflecting the values of small business entrepreneurs in Australia is a good one. For a long time, big business has tried to have its cake and eat it too, asking for tax cuts with one hand while engaging in political activism and social engineering with the other.

Australians can see through the hypocrisy and will not reward politicians who reflect it.

Hopefully now that the Labor Party and Anthony Albanese are in government, big business in Australia will learn a timely lesson. All Australians want from their corporations are good products at a reasonable price and fair employment conditions, and for them to pay their fair share of taxes. We do not elect the chief executive of Coles or Woolies to lecture us about LGBTQ+ inclusion. And we do not expect our supermarkets to fund sex-change holidays for staff. What we do expect is that they pay their employees their proper wages.

Claire Lehmann is the founding editor of Quillette.