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Posts Tagged ‘labor’

Bait And Switch Over Manufacturing Jobs


Since the general election I’ve been laying low, listening to people talk about the new administration and what President Donald J. Trump means to them.

Most supporters found a lot of what the president said and stands for to be objectionable, but voted for him because of the hope of jobs — a central campaign theme. Manufacturing jobs specifically. The kind with which I am very familiar.

On an issue page of the White House web page the administration laid it out:

Since the recession of 2008, American workers and businesses have suffered through the slowest economic recovery since World War II. The U.S. lost nearly 300,000 manufacturing jobs during this period, while the share of Americans in the work force plummeted to lows not seen since the 1970s, the national debt doubled, and middle class got smaller. To get the economy back on track, President Trump has outlined a bold plan to create 25 million new American jobs in the next decade and return to 4 percent annual economic growth.

As a deal-maker, 45 asserts he knows how to do it. His plan is not public so it’s impossible to evaluate it.

The metrics to evaluate 45’s proposal against what happens already exist in the Labor Department jobs report which shows the millions of jobs created during the Obama administration. Fill out the chart as time passes and new results are in, and there is an objective basis on which to evaluate performance. That is, assuming the methods of calculating jobs growth remains constant. A similar metric holds true for measuring economic growth. We should have a solid couple years in before the 2020 campaign begins. Thumbs up or thumbs down. It should be that simple.

I’ve worked several manufacturing jobs during my life and as a director of a logistics company that evaluated countless others. While living in Indiana I interviewed more than 10,000 people impacted by the exodus of jobs in the rust belt which produced what 45 described as the “American carnage” in his inaugural address. This is my turf, although it was in the Reagan administration, not during the Obama administration the web site references.

45’s discussion of bringing manufacturing jobs “back” is a bait and switch. Globalization of the manufacturing process and automation that includes robots doing repetitive tasks has eliminated many manufacturing jobs permanently. It will eliminate more.

Yes some went to Mexico. When Mexico got too expensive they went to China and other parts of Asia. Those jobs are gone and we can’t and don’t want to go back to manufacturing as it was.

Like it or not, with Wall Street occupying four key positions in the administration whatever jobs are created are likely to be similar to those under Obama.

Coal mining runs through my family tree.

It was unskilled labor required of the Industrial Revolution and whether my forbears had been in the United States a century before the American Revolution or had just arrived in the late 19th Century, cheap unskilled labor was needed to mine coal and men in our family did it.

Automation and changing methods of strip mining significantly reduced the number of workers required. Those jobs aren’t coming back either, especially as the cost of renewable energy continues to reach grid parity with coal, and countries like China realize the growth of coal powered electricity generation is making its people sick and look to other electricity generation means. Demand for coal is expected to wane.

I am not hopeful for resurgence in manufacturing jobs, nor was this my issue. However, 45’s posture on jobs came from the lips of every Trump voter with whom I spoke, no exceptions.

If Democrats hope to win the next presidential election we need to understand why friends, neighbors and work colleagues voted for 45. In part, it was about jobs I don’t believe will be back the way we knew them.

Reflections On Labor Day 2016

labor movementLabor Day means much more than sales events and holiday excursions. The day honors the men and women who provide the work that fuels our economy.

Reports of falling unemployment, growing wages, and rising consumer confidence in the United States mask harsh economic realities for millions of people. According to a recent Pew public opinion poll, 54 percent of respondents describe the national economy as bad. Workplace issues like downsizing, speedup, outsourcing, privatization, capital flight, and unsafe working conditions amount to direct assaults on workers’ livelihood.

While the earnings of the wealthy pull away from everyone else, the income of the working class and middle class shrink and more people slip into poverty. In their 2015 book, $2 a Day: Living on Almost Nothing in America, authors Kathryn Edin and H. Luke Shaefer found the appalling figure applied to 1.5 million households.

In Iowa, a recent study by the Iowa Policy Project, found that nearly 20 percent of families earn less than a self-sufficient income despite the presence of one or more full-time wage earners. The study also identified single parents and families in rural regions as most likely to fall short of a basic standard of living.

Wage stagnation is a universal problem, regardless of race, ethnicity, or gender. In addition, two-thirds of low-wage employees, especially those in the food service industry, suffer from some form of wage theft. Traditional full-time employment has also declined even as the total number of lower-paying nontraditional jobs—contingent, subcontracted, temp, on-demand—has increased.

Nationwide, just 12 percent of American workers receive paid family leave through their employer. The gender gap continues with women earning less than men. In certain industries like meat and poultry, the work remains exceptionally dangerous.
An estimated 11 million households spend more than half of their income on rent.

There is not a single state where a full time worker earning the federal minimum wage of $7.25 an hour can rent an apartment for 30 percent or less of their income.

Workers’ compensation, one of the oldest social insurance programs in the nation, is under attack. As conservative lawmakers in a growing number of states weaken benefits and erect barriers for receiving compensation, the cost of work-related injuries are being shifted onto the backs of workers and the public.

Trade unions have traditionally given agency to those who own no means of production and distribution. They rely on their labor to meet their basic needs for food, clothing, housing, and transportation.

In 1956, a third of the workforce held union membership, which was slightly higher than the share of national income taken in by top earners. In 2013, the figures were 11.2 percent and 47 percent, respectively. Those in the American labor force without the protection of a union are considered “at will” employees with no workplace rights except the right to quit.

Unions provide a recognized and organized counterweight to rising inequality and management power by giving employees a collective bargaining voice in their wages, hours, and working conditions. And polls indicate broad public support for the right of workers to unionize across a range of occupations from manufacturing to fast-food.

The American worker today faces a series of challenges often imposed by large employers and conservative politicians. Unions offer a labor-centered way to address structural and policy changes that help to advance greater equality, expand economic opportunity, and yield universal benefits. Unionists believe that all workers deserve living wages, decent hours, and humane working conditions.

Ralph Scharnau
September 1, 2016

Flint and Reagan’s Wake

Flint Strike 1937 Photo Credit Wikimedia Commons

Flint Strike 1937 Photo Credit Wikimedia Commons

Driving out of Flint, Mich. on Bristol Road wasn’t in the plans.

I interviewed some 30 people, all but one male, for truck driving jobs at the Days Inn across from the GM plant. Tired and ready for sleep, I went to the van to get my overnight bag and found all four tires had been slashed.

In the parking lot with a driver I later hired, the tire service came and replaced them. Around 10:30 p.m. I decided to drive the four hours back home to Indiana. The drive seemed much longer as I fought sleep and considered the day’s events.

In his film Roger & Me, Flint native Michael Moore identified Nov. 6, 1986 as the date of the announcement that General Motors would start laying off thousands of workers to move jobs to Mexico. Eventually, Mexican labor would prove too expensive and GM moved some of those jobs to Southeast Asia and elsewhere where people would work on the cheap building cars and auto parts.

I made about a dozen recruiting trips to Flint in 1988. There was a lot of interest in our non-union jobs, a lot of anger, and few hires. As a trucking terminal manager in Northwest Indiana I interviewed countless people seeking work in Wisconsin, Illinois, Indiana, Ohio, Michigan, Pennsylvania, New York, Kentucky and many other states. I took a pencil to it, and found I had interviewed well over 10,000 people from 1987 until 1993. My life was forever changed by that experience as one applicant after another told me their stories of adjusting to devastation in the rust belt as the policies of President Ronald Reagan and his cronies eviscerated the middle class. We are still in the wake of his administration.

It was the end of an era as large-scale work sites like Buick City laid people off and eventually shuttered their plants. Flint is just one example of the hellhole the steel, auto, and other manufacturing towns became. Flint went from being an award-winning auto maker to being an EPA cleanup site. People still live there, but what was no longer exists.

Today we hear of the water crisis in Flint.

Nearly two years ago, the state decided to save money by switching Flint’s water supply from Lake Huron to the Flint River, a tributary that runs through town and is known to locals for its filth, according to CNN. Because of the corrosive nature of water in the river, iron oxidized discoloring tap water, and more importantly, lead began leaching from the pipes in the water system.

“Everything will be fine,” former Flint Mayor Dayne Walling said as he downed a glass of water.

It’s not fine. It won’t ever be fine.

Flint went to hell, literally, after GM began shedding jobs to cheap foreign labor. Violent crime rates rose, people left the city, and today 40 percent of the population lives below the poverty line. Employees dependent on union jobs had trouble coping when the jobs were gone, resulting in complex social and psychological problems. I experienced some of their anger that day in Flint and I won’t forget because it permanently changed me.

I get why Reagan is lionized for what he did to Flint and dozens of other manufacturing cities. The anger is still here. We are still in Reagan’s wake.

Oscar Mayer’s Long Road

Photo Credit Wikimedia Commons

Photo Credit Wikimedia Commons

DAVENPORT — The Kraft Foods Oscar Mayer plant on Second Street will be razed as its new owner, Kraft Heinz, plans to move operations and layoff much of the workforce at the long-time meat packing plant.

Wednesday’s announcement, that Kraft Heinz will close seven plants in the U.S. and Canada over the next two years as part of a downsizing that will eliminate 2,600 jobs, or roughly 14 percent of its North American factory workforce, was widely anticipated by workers.

The company plans a new Davenport facility, contingent upon government financial support, however, some view it as a devil’s bargain because the net impact will be to lose about 800 jobs.

United Food and Commercial Workers Local 431 had not been consulted about the changes.

“They threw the union under the bus,” plant employee Curtis Grant of Eldridge said in an interview with the Quad City Times.

Concessionary bargaining is nothing new to Local 431 whose members ratified a four-year contract with Kraft Foods Oscar Mayer on Nov. 13, 2014. The sticking point in those negotiations was insurance and pensions.

“Now with Heinz, the company is basically telling Davenport give us subsidies to shutter the Second Street plant and build a new facility on the north side or we will close completely and take all the work to Missouri,” said a local worker who requested anonymity via email. “Both the city and the union are painted into a corner. And now with them talking about building a new $200 million plant, the building trades are excited to get those jobs. It’s a devil’s bargain.”

In the takeover of Kraft Foods by Heinz, business partners Warren Buffett of Berkshire Hathaway and global investment firm 3G Capital hope to reduce expenses by $1.5 billion by exploiting synergies among operations and consolidating back office functions including supply chain management, accounting and administration.

On Friday, Berkshire Hathaway reported third-quarter profits more than doubled to $9.4 billion as the completion of the Kraft-Heinz merger boosted the paper value of its stake in the food giant. The deal was good for the third richest man in the world.

Thursday, the Iowa Department of Economic Development announced a $4.75 million incentive plan for the Davenport plant closing, including $3 million once the facility is razed.

“We are glad that Davenport, was able to successfully compete for a new, state-of-the-art manufacturing facility that will certainly position it for future growth,” said Debi Durham, director of the IEDA in a press release. “As major brands merge in this sector, consolidation and modernization will be the outcome.”

Durham said to the Quad City Times she is aware of the potential negative perception of providing state-funded financial assistance to a company that is downsizing its workforce both in Iowa and nationally.

“The optics are not lost on us, and believe me, the sensitivity is not lost on us. We care about people,” she said. “So we do the plays that we believe give us the greatest opportunity for the future, and I think that was what you saw here today.”

Durham said offering financial assistance to a company that is downsizing is not unique and could become more common as more large companies merge.

“We’re going to see more of this,” Durham said. “You’re seeing large mergers going on at a very high level between equals. And any time that happens and we have facilities, that’s something to watch for us.”

It appears Durham’s department has become like a turkey vulture picking over the carrion of what used to be a robust manufacturing economy and the middle class it supported.

If we consider what the Davenport plant makes – bologna, Lunchables, and other branded, highly processed meat products – this day had to come. In part, consolidation of the food industry is a reaction to the fact that tastes have changed and sales of some traditional products have declined. The processed meats industry is experiencing declining consumption of meat in general, and an interest in healthier options, according to data aggregator Statista, Inc.

The World Health Organization supports moderation of consumption of preserved meats to reduce the risk of colorectal cancer and has been doing so since 2002. On Oct. 29, WHO released a new report regarding the connection between red meat and cancer. Juxtaposition of this story with news about Kraft Foods Oscar Mayer, and Buffett’s third quarter financial results tells a broader story. Things have changed since Oscar F. Mayer immigrated from Germany and began selling sausages from his butcher shop in Chicago in 1883.

This story hits personally because not only did my maternal grandmother, my father and I work at the plant, the rise of Oscar Mayer as a global brand framed my early participation in our consumer society. I’m not alone in that.

When the Mayer family sold the company to General Foods in 1981, the Reagan revolution that resulted in decimation of the middle class had already begun. While it would have been hard to predict today’s outcome in 1981, what’s happening is not surprising in that context.

The two year transition to plant closure will hopefully enable employees to figure out what to do with the rest of their lives. Perhaps that is the best that can be expected.

Here is the entire statement provided to employees at one of the affected plants:

“Following an extensive review of the Kraft Heinz North American supply chain footprint, capabilities and capacity utilization, we are announcing the closure of seven manufacturing facilities in North America: Fullerton, California; San Leandro, California; Federalsburg, Maryland; St. Marys, Ontario, Canada; Campbell, New York; Lehigh Valley, Pennsylvania; and Madison, Wisconsin. In a staged process over the next 12-24 months, production in these locations will shift to other existing factories in North America.

We are also planning to move production from our existing Davenport, Iowa, facility to a new, state-of-the-art location within the Davenport area; and move part of our cheese production from our Champaign, Illinois, facility to other factories within our network, which will create will make Champaign a center-of-excellence in dry and sauce production. Both moves will take up to two years to complete.

Our decision to consolidate manufacturing across the Kraft Heinz North American network is a critical step in our plan to eliminate excess capacity and reduce operational redundancies for the new combined Company. This will make Kraft Heinz more globally competitive and accelerate the Company’s future growth.

We have reached this difficult but necessary decision after thoroughly exploring extensive alternatives and options. This action will reduce the size of our North American factory-based employee population by a net number of approximately 2,600 positions.

At the same time, we will invest hundreds of millions of dollars in improving capacity utilization and modernizing many of our facilities with the installation of state-of-the-art production lines.

We will treat our people with the utmost respect and dignity. At the appropriate time, affected employees will receive severance benefits, outplacement services and other support to help them pursue new job opportunities. Kraft Heinz fully appreciates and regrets the impact our decision will have on employees, their families and the communities in which these facilities are located,” Michael Mullen, SVP of Corporate & Government Affairs.

“Additionally, Kraft Heinz is announcing that in 2016 we will move Oscar Mayer and our US Meats Business Unit from Madison, Wisconsin to our co-headquarters in Chicago. The move will bring 250 jobs to the Chicago area.

Members of the Oscar Mayer and US Meats Business Unit will have the opportunity to move with the business to Chicago. The move centralizes all our U.S. Business Units to our co-headquarters of Chicago and Pittsburgh, which will drive increased collaboration and efficiency.”

Pushing Back On Raising Minimum Wage

Solon Polling Place

Solon Polling Place

RURAL JOHNSON COUNTY — The nearby City of Solon is concerned about the impact of the recently passed county ordinance to raise the minimum wage. The city council doesn’t buy in, local businesses don’t buy in.

On Sept. 10, the Johnson County Board of Supervisors held the last of three readings of a new ordinance to raise the county minimum wage in $0.95 increments to $10.10 per hour by Jan. 1, 2017. The board passed the ordinance unanimously.

The Cedar Rapids Gazette reported the Solon city council is considering opting out of the new county minimum wage structure.

According to the Solon city administrator, the city council is considering just such an action.

An agenda of the council’s Sept. 2 meeting lists “discussion on minimum wage ordinance by Johnson County.” Draft minutes from the last council meeting, which have not been posted online, show council members unanimously voiced opposition to the county’s minimum wage ordinance. Local business owners also spoke out against it, saying they couldn’t afford raises for all of their employees while maintaining the same staff levels.

Doug Lindner of the Solon Economist recounted Mayor Steve Stange’s Sept. 2 survey of council members here. The council unanimously opposed raising the wage in Solon as laid out in the new ordinance.

City Attorney Jim Martinek was directed by Stange to review the proposed county law and research the city’s options and responsibilities, according to Lindner. Council is expected to take up the issue at its Sept. 16 meeting.

KCRG – TV9 interviewed local business owners Leo Eastwood and Sam Lensing in a news segment that aired Sept. 11.

Eastwood owns Eastwood’s Sports Bar and Grill. He is well known in the community and has placed political advertisements for favored Republican candidates at his place of business. His business recently moved from a strip mall at the edge of town to Main Street, where he joined a growing group of bars and restaurants in the city of 2,300 people.

“You’ve got to pass that along or you’re not going to be in business long,” Eastwood said to KCRG of a potential mandatory wage increase.

Lensing owns the most visible business on Main Street, Sam’s Main Street Market, a full service grocery store. Another of Lensing’s businesses, D & D Pizza, recently vacated its space across the street from the grocery store and Eastwood moved in.

Sam’s Main Street Market is and has been an important part of the community, sponsoring local events, collecting funds for the local food bank, and preventing the city from becoming a food desert for people with limited transportation.

“If this wage hike does increase that much where people have to raise their prices what’s it going to do for their business?” Lensing asked in the interview.

Sam’s Main Street Market competes with Fareway, Aldi, HyVee, Walmart and Costco. Because Solon is a bedroom community, people who commute to work have an easy option to buy groceries and sundries elsewhere. The convenience of his location brings customers willing to pay more rather than make a special trip to another town. KCRG didn’t report how many employees Lensing has at near minimum wage to validate his concern.

All of this seems like a tempest in a teapot, and here’s why.

The council’s concern, as reported by the news media, seems like a knee-jerk reaction to the minimum wage increase by a small number of business owners. The retail price increase a minimum wage increase may or may not require would have little impact in a community where the median household income is more than $62,000 per year — substantially higher than either the county-wide or state-wide figures. The argument about raising prices is a red herring.

How many low wage workers has the council heard from? I wasn’t at the meeting, but probably zero. In my experience covering council meetings for the Solon Economist I found councilors exercised a reasonable amount of diligence in matters like this. While the composition of the council has changed since I covered them, one hopes they will get feedback from Solon residents who work at or near the minimum wage in the city before opting out of the county ordinance. It is a voice not heard in this discussion to date.

There has been no public discussion of the impact on the Solon workforce of opting out. There are a lot of questions to be answered, including, how many near minimum wage jobs (earning below $10.10 per hour) would be affected? Where do Solon workers in near minimum wage jobs live? Would near minimum wage employees at Solon businesses seek employment at higher wages elsewhere as a result of the city opting out? How do near minimum wage workers in Solon get health insurance mandated by the Patient Protection and Affordable Care Act, and at what cost to taxpayers? Has the city council read the ordinance to understand which businesses are required to comply and which are not? At present, there are no public answers.

As I wrote on Friday, the new county ordinance does little to address the underlying causes of poverty here. It turns out getting cities like Solon to buy in will be yet another delay in pursuit of social and economic justice.

The Union Difference: Fair Wages and Benefits

labor movementThe continuing debate over our economic inequality focuses on globalization and technology. These are seen as the determinants of our transformed economy and rising inequality. Remedies usually focus on better education and more training.

But this explanation largely omits discussion of unions and workers’ power. Americans are already better educated than ever, with high school and college graduation rates at record levels. Rapid technological change is not unique to the present as it occurred in other eras since World War II as well. Globalization, furthermore, is not a force of nature but rather a set of trade, tax, and corporate policies that largely benefit employers.

While most workers are producing more and earning less, corporate profits soar. Last year the pay gap between CEOs and typical workers widened to 373-l. Over the last fifteen years, even college graduates have seen little or no economic gains.

In 2014, only 11 percent of all US workers belonged to a union. Rather than just falling victim to natural causes, unions were assaulted. Beginning in the mid-1970s, corporations launched campaigns depicting unions as obstacles to competition, hired union busting law firms, and convinced Congress to pass laws banning effective union organizing tactics. Multinationals wrote trade and tax rules that facilitated moving jobs abroad and threatening labor at home.

The decline of union bargaining power correlates with the wage stagnation over the last five decades. Besides pushing down the wages of the working class, it also increases the incomes of the wealthiest 10 percent.

In much of America today, work no longer results in a decent paycheck and a rising standard of living. The portion of the economic pie that goes to working people currently stands near the smallest on record since 1947. Similarly the gap between worker pay and labor productivity has widened since the 1970s. In a healthy economy, wages and productivity would rise in tandem, but in recent decades, productivity gains have flowed increasingly to executive compensation and shareholder returns, rather than wages. The low-wage business model has essentially turned public aid into a form of corporate welfare.

Restoring shared prosperity and rebuilding the working and middle classes requires recognizing the role of the workforce in creating wealth. Reviving unions will take new forms of organizing, new alliances, and new thinking. In Los Angeles, a creative union movement helped elect officials who then used government procurement and zoning powers to demand that companies pay decent wages, adhere to labor standards, and end sabotage of worker organizing. In last summer’s fast food walkouts, new alliances with religious and community groups and support from elected officials protected workers and helped enlist consumer support for better wages. In Seattle, unions played a major role in the successful push for the $15.00 minimum wage.

Despite opposition from some employers, conservatives, and public officials, unions have brought diverse voices together, and their struggles have elevated the working conditions, the standard of living, and the recognition of not just their members, but of all who labor. Labor’s power comes not from dollars, but from organizing. Unions’ have the ability to take bold action to defend workers’ rights in the workplace, in the street, and at the ballot box.

The challenge for organized labor is to translate the real dismay about wage stagnation and economic inequality into collective action that raises wages and ensures prosperous companies share more of their profits with their workers. This won’t be easy in today’s entrenched big money politics. The first step is to focus on empowering workers to organize and bargain collectively, and thereby rebuild a strong worker voice in both the workplace and in our politics.

Ralph Scharnau teaches U.S. history at Northeast Iowa Community College, Peosta. He holds a Ph.D. from Northern Illinois University. His publications include articles on labor history in Iowa and Dubuque. Scharnau, a peace and justice activist, writes monthly op-ed columns for the Dubuque Telegraph Herald.

Two Things About Labor

Working the Alley

Trash Picker Working the Alley

As a child Dad would take us to the Eagles hall for a Labor Day event sponsored by his union. There were speeches and socializing, food and beverages, and one year I won a canned ham in a raffle which I proudly brought home to Mother. A lot of people attended and I got to know some of them after joining the union to work at the meat packing plant for a couple of summers while I was an undergraduate. It was an open shop, but I joined the union and still have my union retirement card.

After college, I joined the U.S. Army and was assigned to an infantry company. In the military, and in a number of government and private jobs, I was occasionally a worker, but mostly have managed people and resources over a 40-year worklife. I’ve viewed unions from multiple perspectives, with a personal stake in the union-management relationship. Two things seem most important about the changes in worklife over the years.

Work is not valued adequately. The rise of management consulting firms—that purport help companies drive profitable growth through the effective use of compensation—have methods of assigning value to work. What they do is help companies optimize and reduce human resources costs. Private business has been working to shed people-costs for years and some believe there is an application for these skills in government as well. The growth of outsourcing, temporary job agencies and part time workers are all part of this successful-for-business movement.

What is the value of food security, a livable homelife and a strong social support network? People who do the work to provide these things are taken for granted.

Compensation is a murky endeavor at best. At a job interview in 2014, the district manager of an international service organization emphasized there were no benefits in his company which employed more than 20,000 workers. The work was part-time, and under the Patient Protection and Affordable Care Act, companies who employed people more than 30 hours per week are required to provide health insurance. The company kept employees under 30 hours per week.

The starting hourly wage was above average for the kind of work in the area. To get health insurance mandated by the ACA, people who worked there when I did often turned to the ACA health exchanges for coverage and subsidies. My policy through the exchange costs about $1,200 per month without subsidy. There are stories of much higher premiums for families. If you take the premiums divided by the number of hours worked, it amounts to a $9.89 per hour subsidy of my worklife.

Businesses have methodologies to understand the value of benefits packages. Workers often don’t. While some appreciate the fact that an employer will provide a benefits package, few workers I know put a pencil to it. The focus is almost totally on wages that can be spent and this distorts the value of working for a company. Too, it is hard to define the value of benefits like disability insurance, life insurance, paid time off, and employee appreciation days. People who focus solely on hourly wage rates often don’t understand the broader context in which wages exist in society.

It’s a personal tradition to work on Labor Day. Even when I worked for an oil company, I drove to the office on Labor Day. Besides security, I was often the only person in the high rise office building on Michigan Avenue in Chicago.

These days the jobs I work are part time and temporary. Working on Labor Day now means finding my way to a home writing table to work on a freelance article, or making a trip to the garden to pull weeds. All of this has value, just not monetary value. Maybe that’s my point.

What is the value of living a reasonably secure life? It’s a lot higher than it feels for working people.

Wages And Private Sector Unions

labor movementAs we approach Labor Day, the lockout of United Steel Workers at six Allegheny Technologies plants is a sad commentary on the state of affairs of public sector unions.

“Management has locked out more than 2,000 workers in an effort to extract concessions on health and retirement benefits from union members,” according to Michael Hiltzik of the Los Angeles Times.

“ATI is demanding steep increases in out-of-pocket health care expenses and the elimination of pensions for new hires, essentially creating a two-tier wage and benefit system. In addition, ATI wants to expand the use of outside contractors and impose work rule changes that would turn workers into casual laborers, with irregular and unpredictable shift times, less access to overtime pay and worse working conditions,” according to Evan Winters of the World Socialist Web Site.

It is no secret that American business has been working to shed pension and health insurance liabilities, and for the most part has been successful during the post-Reagan era. If they had their way, companies would seek to eliminate most operational liabilities from having employees by outsourcing and using temporary, part-time workers without benefits.

That the company (through a third party) is able to offer temp workers as much as $3,000 per 84-hour week without benefits – plus a guaranteed layoff if a new contract between labor and management is signed – is a demonstration of the power of capital in this capital intensive industry. The average annual wage for a USW worker at Allegheny Technologies is $90,000, which includes mandatory overtime.

If $90,000 per year plus benefits seems like a lot, the work is physically demanding, dirty, repetitive and resoundingly dull. For long-time steel workers, it is a way of life, fraught with injury and physical deterioration. On a scale of wage justice, steel workers should be at the higher end of the range.

Yet the company can, and likely would pay a premium rate to keep the plant operating, albeit at a lower rate of efficiency, until the union contract is settled – or when the temporary workers are made replacement workers. Hiltzik called it a “race to the bottom,”  and friends of labor would agree.

The union is damned if they do and damned if they don’t. On the one hand, some members believe USW leaders are too cozy with Allegheny Technologies management, according to Winters. Rank and file may or may not accept a deal presented for a vote. On the other hand, if there were no USW, management would long ago have made the changes they seek in this new contract.

In 2014, 6.6 percent of private-sector workers in the U.S. were union members, according to the Bureau of Labor Statistics. In Iowa, it is slightly higher at 6.9 percent, or 84,791 union members. As a right to work state, there are another 7,500 private-sector workers who are not union members, but work at a company where the pay and benefits are set by a union contract.

The Allegheny Technologies lockout is a case where each contract negotiation has become an opportunity to break the union, rather than to make adjustments in pay and benefits to serve both employees and the company. Because of the capital intensive nature of the steel industry, labor is required to keep plants operating. Just not workers represented by a union.

Everyone’s Becoming Fungible

Fairness for Temp Workers(Editor’s Note: Robert Reich has been a media pundit, lecturer and writer popular with progressives. From time to time he hits home as with this post on the lack of income predictability for a growing segment of Americans. It is now 40 percent, but soon to be a majority of workers, according to Reich. Here’s a snippet. Click through to read the entire post).

As Labor Day looms, more Americans than ever don’t know how much they’ll be earning next week or even tomorrow.

This varied group includes independent contractors, temporary workers, the self-employed, part-timers, freelancers, and free agents. Most file 1099s rather than W2s, for tax purposes.

On demand and on call – in the “share” economy, the “gig” economy, or, more prosaically, the “irregular” economy – the result is the same: no predictable earnings or hours.

It’s the biggest change in the American workforce in over a century, and it’s happening at lightening speed. It’s estimated that in five years over 40 percent of the American labor force will have uncertain work; in a decade, most of us.

Click here to read the rest of this post.

Slavery And The Costco Halo

Slave Vessels Photo Credit AP

Slave Vessels – Photo Credit AP

On Thursday the Los Angeles Times reported a Costco member sued the retailer on allegations that it knowingly sold frozen prawns that were the product of slave labor.

The lawsuit, filed Wednesday in U.S. District Court in the Northern District of California, alleges that Costco was aware that the prawns it purchased from its Southeast Asian producers came from a supply chain dependent on human trafficking and other illegal labor abuses.

The suit, which seeks class-action status, named seafood producers Charoen Pokphand Foods Public Co. in Thailand and C.P. Food Products Inc. in Maryland as defendants.

Based on claims of unfair competition and fraudulent practices, the lawsuit seeks a court order stopping Costco from selling prawns without a label describing its “tainted” supply chain and from buying, distributing and selling products they know or suspect to be derived from slave labor or human trafficking.

Read the rest of the article here.

If the allegations are true, the Costco halo with regard to labor relations should dim.

More than any other large retailer, Costco is in the good graces of members of the progressive community for its labor practices.

In January 2014, President Obama choose a Costco in Lanham, Maryland to advocate for an increase in the federal minimum wage because the retailer is “acting on its own to pay its workers a fair wage.”

“To help make that case, look no further than Costco,” said Thomas Perez, secretary of labor at the event. “Costco has been proving for years that you can be a profitable company while still paying your employees a fair wage. They’ve rejected the old false choice that you can serve the interests of your shareholders, or your workers, but not both.”

“Labor union officials and backers agree,” according to an article in USA Today, “saying other retailers, such as Walmart, could learn from the way Costco treats its workers and the results.”

Costco’s example is on the left end of the retail spectrum, and is set up to be taken down a notch. Slavery in its supply chain is nothing new as their shelves have long been stocked with canned tuna derived from a Thailand based fishing trade that sources from slave vessels. The Costco halo has protected it… perhaps until now.

When in high school I enjoyed having a tuna melt sandwich at Ross’ Restaurant in Bettendorf after working on the stage crew. The warm tuna salad, with a slice of melted cheese, served on toasted bread was sensually appealing and delicious. We are not in high school any more.

We live in a society where the mere mention of symbols of 19th century slavery creates cacophonous public debate. Just look at the recent news cycles regarding use of the Confederate battle flag in public places. It was a media firestorm with the defining act arguably being removal of the Confederate flag from the South Carolina state capitol grounds. Modern day slavery? Barely a word about it.

Whether Costco’s association with slaves in its supply chain will become an issue among its members is uncertain at best. As a society don’t like to take down the symbols in our hagiography, even if all large-scale retailers, including Costco, are far from saintly. We take comfort in developing patterns and relationships with our retailers, creating a refuge from a world that seems increasingly hostile. “I like this brand,” a consumer might say.

The argument comes down to the face of the farmer. When we discover the farmer is a slave, it requires action on our part. That is, unless we concede the world is so screwed up there is no hope.

I’ve never eaten a prawn, and don’t plan to start. If the lawsuit is successful, I’m not sure it will matter among prawn-eaters or other Costco members. However, progressives should care, and stop referring to Costco as a model for labor relations until it pledges, and lives up to the pledge, to take slavery out of its supply chain.