Putting Labor Back in Labor Day

By Roger Linnett

The one thing in this country that we should be talking about but aren’t, especially considering it’s Labor Day, is jobs. Real jobs, too – not menial part-time jobs or ones that are ego-crushingly below one’s qualifications and experience.

The economy seems to be recovering, if you follow the financial news, but there hasn’t been a concomitant re-employment of sidelined American workers. The growing realization is that our jobs aren’t coming back, and the corporations are just fine with that.

Recently, talking head economists let slip that American industry is sitting on over $1 trillion in cash, which it is now going to use for mergers and acquisitions, i.e., buying up and consolidating economic holdings and power. We could be in for a whole new wave of job losses.

Remember the good old days after the Reagan tax cuts, when larger corporations were gobbling up smaller ones like M & Ms? Jobs disappeared by the thousands as consolidation was the mantra of the day. What couldn’t be consolidated was dismantled and shipped overseas where goods could be produced at a fraction of the cost, mainly labor, than they could in the good ol’ U.S. of A. We even gave tax breaks to companies that shipped their plants and our jobs overseas! (Just ask Senatorial Candidate Carly Fiorina about the killing she made with Hewlett-Packard.)

Then, our trade policies were shredded during the Clinton years; remember GATT, NAFTA and the WTO?  So that today our tariff rates on imports average around 2 percent, whereas most of the rest of the industrialized world still operates at around 20 percent. Who in their right mind would want to open a factory here that could compete with our overseas rivals given those circumstances? And those jobs that can’t be outsourced (a vile term) are, nonetheless, under assault.

A case in point – –

Three hundred five union workers at the Mott’s apple processing plant in Williamson, near Rochester, N.Y., voted to strike last May when the plant, owned by beverage conglomerate, the Dr. Pepper Snapple Group (DPS), demanded that the employees take a pay cut averaging about 33 percent.

The reason for the company’s action was not economic hardship; in fact, the company is making record profits. The company’s position was based on their reckoning that the plant’s workers were making about half again as much as the average wages being paid for blue-collar production in the Rochester area. It should be noted, however, that the area’s workforce and economy has been suffering from years of layoffs and downsizing led by the industrial mainstays of the area, Xerox and Kodak. DPS maintains that, since the labor market in the area is depressed, they are overpaying their employees.

According to a recent New York Times article, union officials say that 70 percent of the plant’s workers earn $19 or less an hour and that many are highly experienced (some as much as 24 years) and deserve well more than $14 an hour –  the current comparable regional average wage, according to DPS.

The Times article also cited Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union, which represents the Mott’s workers as stating, “they said, ‘We have no financial need for this, but we just want it anyway because we figure we can get away with it.’ “

DPS wanted to cut their wages by about $3,000 a year, freeze pensions, end pensions for new hires, reduce the company’s 401(k) retirement contributions and increase employees’ costs for health care benefits. DPS said it was merely seeking to bring its benefits more in line with those of its other plants, the Times reported.

Furthermore, the employees were already incensed that over the previous two years the company cancelled bonuses, the company summer picnic and the annual employee’s children’s Christmas party, thus priming the workers to overwhelming agree on the strike vote. Adding insult to injury, the company posted record profits last year and increased its dividend by 67 percent in May.

DPS’s dilemma is that it can’t just up and move its plant to China. The apples are here, so they’re stuck. The company has hired scabs to keep the plant open as the annual harvest begins. The plant processes about half the apples produced in the region, but many growers in the area are concerned about reports that the plant is only operating at one third its capacity. Despite pressure to settle, the company has refused to resume negotiations. Happy Labor Day, indeed!

Our country has gone from being the greatest creditor nation in the world to being the greatest debtor nation in the world; from being the largest exporter of finished goods to the largest importer of finished goods and from the largest importer of raw materials to the largest exporter of raw materials. We have, in 30 short years, gone from being the greatest industrial power on the globe to a third world nation. Our consumer-driven economy is being strangled because of the decimation of the working and middle classes.

It is a principle of all economics that demand precedes supply. Thus, it must also be true that, in a consumer-driven economy, the consumers have to have enough money to purchase the products available. Henry Ford knew this; he paid his workers enough to afford to buy the cars they made; a practice which appalled many fellow industry leaders of the day.

So, how do we regain our former, glorious, working man’s America?  Labor built this country. So labor, the people, must be pre-eminent in the plans.

First, withdraw from the WTO. It’s about time we started protecting our own industries and our own jobs again, instead of being a global laughing stock.

Second, roll back the Reagan tax rates to pre-1980 levels, when we taxed anyone who made over $3 million per year at 74 percent. That will encourage companies to reinvest their profits in their businesses instead of sending them to offshore tax havens, and will bring CEO compensation back to reality.

Third, start enforcing the Sherman Anti-Trust Act again, which, Teddy Roosevelt used to break up the cancerous monopolies of the Robber Baron era. We must deconstruct the mega corporations that control media, energy, food production and virtually own our political process.

Fourth, pass the Employee Free Choice Act. It was the unions that grew the working and middle classes that drove our economy. Union jobs, as a percentage of the total labor market, have decreased from around 25 percent in 1980 to about 7 percent today.

The American work force has been consigned to the scrap heap, and replaced with a cheaper, but just as expendable, version. Our only purpose today is to consume the products being imported from around the world.

It’s time for us to climb down off that scrap heap and take back our hard-won standard of living; to re-ignite the true American Dream, not of unspeakable riches and the dreams of avarice, but the one about owning your own home, providing for a secure retirement, about the freedom from worrying that a devastating illness will wipe out a lifetime’s work and of helping your children have a better life than yours. Only then can we once again “celebrate” Labor Day.

Categories: Labor, Roger Linnett