Why You Should Earn Less: the Company’s Argument

Stephen Franklin

Tom Michaud is no bar­gain­ing expert. He is an apple­sauce cook, earn­ing $21.80 an hour after work­ing 15 years at the Mott’s apple juice plant in Williamson, N.Y.

But he sensed a prob­lem from what he heard about the way con­tract talks were going with his com­pa­ny, Texas-based Dr. Pep­per Snap­ple Group Inc. You could see some­thing build­ing,” he recalled. He was right.

But what was ahead was some­thing that union offi­cials say they had not expect­ed. The giant con­glom­er­ate offered a ratio­nale for tough bar­gain­ing that you rarely hear from com­pa­nies today: We’re los­ing mon­ey. We’re being eat­en by the for­eign com­pe­ti­tion. Our tech­nol­o­gy is ter­ri­bly behind and we need to put the mon­ey into keep­ing the plant up to date.

These are the expla­na­tions com­pa­nies usu­al­ly offer when­ev­er they say they need to slash wages and ben­e­fits. (Watch the recent PBS pro­gram above to hear the company’s explanation.)

Mott’s talked about the plant’s inef­fi­cien­cy, but it also said that it want­ed to bring the plant’s costs in line with local and indus­try stan­dards,’” accord­ing to a New York Times report.

This is the first time a very prof­itable com­pa­ny has come to us and asked for con­ces­sions, and I’ve been with the union for 23 years,” says Stu­art Appel­baum, pres­i­dent of the Retail, Whole­sale and Depart­ment Store Union (RWD­SU), an affil­i­ate of the Unit­ed Food and Com­mer­cial Work­ers union.

As union offi­cials point out, Dr. Pep­per Snap­ple, has been rolling in the mon­ey late­ly. The lead­ing pro­duc­er of fla­vored bev­er­ages in North Amer­i­ca and the Caribbean, as the com­pa­ny describes itself, it record­ed $550 mil­lion in net income last year, up from a $312 mil­lion last the pre­vi­ous year.

So, too, Lar­ry D. Young, its CEO and pres­i­dent, earned $2.7 mil­lion in cash and anoth­er $3.8 mil­lion in non-cash com­pen­sa­tion, accord­ing to news reports.

Before the work­ers walked out after reject­ing the company’s offer, the com­pa­ny was ask­ing for a $1.50 an hour pay cut, a pen­sion freeze and oth­er ben­e­fits cut­backs, accord­ing to news reports and com­pa­ny statements.

So let’s take the company’s ratio­nale and expand it across the board. This is what would happen:

Wher­ev­er union­ized work­ers earn more than the local folks, there would be a lev­el­ing off and the union work­ers are ones who will have to give up.

It means the new income lev­el for the work­ing class will be the low­est lev­el, the lev­el set in nonunion work­places where already low wages have been drop­ping the last few years.

And most impor­tant­ly, it means that in hard-hit com­mu­ni­ties where unem­ploy­ment is high and wages are low, the few union­ized or high­er-pay­ing com­pa­nies will have good rea­son to bring every­one down to the same level.

But there is some­thing more wor­ri­some here.

It’s the thought that all fac­to­ry job work is the same and that nobody deserves extra rewards regard­less of how com­plex their job is.

At the Mott’s plant, many of the union’s 305 work­ers are high lev­el machin­ists or elec­tri­cians, says Audra Makuch, a union offi­cial. And their jobs are quite spe­cial­ized, she adds.

They are not the kinds of folks you pick up off the street for nine bucks an hour, which, accord­ing to the union, is what the com­pa­ny is pay­ing most of the replace­ment work­ers who are now run­ning the plant.

For sure, Tom Michaud knows that cook­ing apple­sauce is not an easy job, or one that he can eas­i­ly find in his upstate New York community.

But, as the com­pa­ny might say, he is just a fac­to­ry work­er after all.

Stephen Franklin is a for­mer labor and work­place reporter for the Chica­go Tri­bune, was until recent­ly the eth­nic media project direc­tor with Pub­lic Nar­ra­tive in Chica­go. He is the author of Three Strikes: Labor’s Heart­land Loss­es and What They Mean for Work­ing Amer­i­cans (2002), and has report­ed through­out the Unit­ed States and the Mid­dle East.

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