Lessons from the Market Basket Strike

by Rand Wilson and Peter Olney

[Ed. Note: The unusual and lengthy strike at Market Basket, a regional supermarket chain centered in Eastern Massachusetts, garnered regional and even national media attention.  The object of the strike, led by local mangers, supported by workers at the store and  by warehouse and trucking workers who refused to deliver groceries, and by a strong consumer boycott, was to reinstate Arthur T. Demoulas, a fired former CEO who promised to retain the chain's popular paternalistic culture.  This article is reposted from the excellent Stansbury Forum (stansburyforum.com) with the permission of the authors.]

After a weekend of last minute haggling and prolonged negotiations, a settlement of the Market Basket dispute was announced Wednesday night bringing to a close one of the most dramatic and inspiring labor struggles in the United States in many a year. The settlement was not immediately about wages or benefits or job security language. These employees don’t even have a union! The settlement was about who would be their boss and CEO. In a highly unusual management-led action, they paralyzed the company’s 71 stores and promoted a devastating consumer boycott to get previously fired CEO Arthur T. Demoulas back and they won.

Most of the 25,000 workers from part-time checkers to big shot regional managers will be returning to work immediately. In fact, during most of the dispute, most of the checkers and in-store personnel worked, converting their stores and parking lots into protest platforms where the few remaining customers were engaged in intense discussions about the MB dispute. Where once the walls of a store were adorned with promotional ads, now they were decked-out with signs extolling the virtues of “Arthur T.” and their desire to maintain his business model over his cousin Arthur S. The strike was a strategic one by a combination of key workers in trucking and warehousing and top and middle managers whose industrial actions prevented any perishables from reaching the stores. Market Basket became nothing but a big dry goods chain.

Threats of firing and numerous “drop dead” days for employees to return to work came and went, virtually ignored by the workforce that was out. The power of a united and strategic workforce acting forcefully with broad consumer support rocked the whole of Eastern Massachusetts and its 30 stores in New Hampshire and Maine.

Would the workers have been better off in a union? Yes, of course. There is no substitute for the power and voice that collective bargaining provides for workers. Yet, the great irony here is that if Market Basket workers had been in a union, it’s nearly impossible to imagine them striking to restore their fired boss and defeat the Wall Street business model of his cousin Arthur S. A no strike clause and the narrow post WW II vision of our labor unions would surely have prevented that.

We should also point out that warehouse and trucking is usually with the Teamsters in unionized grocery stores. Often the decision to respect UFCW picket lines is not always forthcoming or impossible because of contract language.

An NLRB charge was filed by several employees arguing that the company’s threats against them constituted a violation of their Section 7 rights to protest and redress their “wages, hours and working conditions.” If a settlement hadn’t been reached, a National Labor Relations Board Administrative law judge would have had to rule on whether the discharge of the CEO constituted a “unilateral change in working conditions!” The employees certainly saw that it did — and put their own lives on the line because they saw their own conditions inextricably bound up with who was their CEO.

Below are some lessons from this extraordinary struggle that we draw for the rest of the labor movement:

  • Not all workers pack an equal punch– Strategic workers in trucking and warehousing are crucial to interrupting the flow of goods, particularly perishables. Current labor laws (especially in the private sector) exclude many of the most strategic workers making meaningful strike activity much harder.
    Management rights are workers’ rights– Unfortunately not since the UAW’s Walter Reuther has the U.S. labor movement sought any real say over operating and management decisions. Instead, we’ve surrendered to the narrow “management rights” clause written into virtually every union contract. Yet, these decisions, as the MB workers demonstrated, are crucial to the livelihood of workers.
    A real strike stops production – Campaigns at Wal-Mart and in fast food have called the exit of a handful of workers from stores and fast food outlets “strikes.” But most have failed to stop production. Market Basket workers (management and labor) engaged in a true “strategic strike” and the camera shots of empty shelves and empty stores were a compelling image that needed no virtual enhancement or Facebook ‘likes’ to be real.
    Community support is key – The depth of support in the massive boycott where customers taped their receipts from Stop and Shop, Whole Foods and Hannaford’s to the windows of Market Basket was an essential part of the victory. For many customers this was a deep hardship, but the passion and energy of the workers and Market Basket’s low prices underlay consumer’s commitment to stay away until victory.

Union or “not-yet-union,” one fundamental lesson is that there are no shortcuts to deep organizing at the point of production. Labor strategists and organizers who are impatient with that process and believe that social media and corporate leverage can substitute for the basics are doomed to failure.

Following this monumental struggle, Market Basket and its workers will never be the same. To reach a settlement, Arthur T. enlisted the notorious private equity firm, BlackRock to buy one third of the company. As a result, the Market Basket culture and its manager’s paternalistic practices may significantly change. Meanwhile, Market Basket’s workers expectations have never been higher and the sense of their power – even without the managers’ support – can’t be denied. The vast majority of workers are part-time and low paid. The UFCW is actively reaching out to enlist support. Stay tuned because there is undoubtedly much more to come!

Rand Wilson

Rand Wilson has worked as a union organizer and labor communicator for more than twenty five years and is  currently an organizer with SEIU Local 888 in Boston. Wilson was the founding director of Massachusetts Jobs with Justice.

Peter Olney

Peter Olney is retired Organizing Director of the ILWU. He has been a labor organizer for 40 years in Massachusetts and California.

Open Shop Trend Makes Organizing “the Organized” Top Union Priority

by Steve Early

Steve Early

            For many years, American unions have been trying to “organize the unorganized” to offset, and, where possible, reverse their steady loss of dues-paying members. In union circles, a distinction was often made between this “external organizing”–to recruit workers who currently lack collective bargaining rights–and “internal organizing,” which involves engaging more members in contract fights and other forms of collective action aimed at strengthening existing bargaining units.

Thanks to the growing success of corporate-backed “Right-to-Work” campaigns, these two forms of union outreach now greatly overlap.  Virtually all labor organizations face the expanded challenge of recruiting and maintaining members in already unionized workplaces where the decision to provide financial support for the union has, for better or worse, become voluntary. (Some left-wing critics of “contract unionism” have long argued that automatic deduction of dues, by employers for their union bargaining partners, makes the latter overly dependent on management and less responsive to rank-and-file workers.)

Throughout the country, labor foes have succeeded in limiting the ability of unions to collect dues, or the equivalent in “agency fees,” from more of the 16 million workers they are legally certified to represent.  In the private sector, 24 states now have an “open shop,” which means that union membership or fee paying by non-members cannot be required in contracts with employers, including, most recently, those operating in Michigan and Indiana.

In the public sector, the parallel legal/political assault on “union security” agreements and automatic deduction of dues or fees from government employee paychecks has unfolded in those two states, neighboring Wisconsin, and every state with recently created bargaining units for home-based direct care providers.

With adverse ramifications for 700,000 similarly situated union-represented workers in other states, the Supreme Court ruled, in June, that publicly funded home health care aides in Illinois were only “quasi-public employees.” According to the Court’s decision in Harris v. Quinn, they are no longer subject to the requirement, under local public sector labor law, that non-members pay their “fair share” of the cost of union representation and services which unions must provide to everyone in their bargaining units.

Membership Exodus

When Service Employees organizer Rand Wilson and I wrote about this emerging trend two years ago, in an essay for Monthly Review Press entitled “Union Survival Strategies in Open Shop America,” we noted that there were already more than 1.5 million Americans covered by union contracts, who had declined to become members. Based on developments then underway in the mid-west, we predicted that the guaranteed revenue stream that many U.S. labor organizations had long enjoyed–and used to pay for their large complement of lawyers, lobbyists, full-time negotiators, and field staff–would soon be interrupted.

For example, in Wisconsin, where public employees had just been battered by contract concessions and then stripped of meaningful collective bargaining rights, most of their unions had not functioned as voluntary membership organizations for three decades or more. We expressed the concern that a new, more intimidating workplace environment might combine with rank-and-file resentment over wage and benefit give backs to send dues receipts plummeting–if unions did not move quickly to strengthen their shop-floor presence.

In Indiana, from 2005-11, a similar Republican revocation of “dues check off” and more limited bargaining rights caused state worker union membership to drop from 16,400 to less than 1,500. In Michigan, after legislators excluded home care workers from their state’s definition of public employees and stripped them of bargaining rights granted by a previous Democratic governor, membership in the Service Employees International Union (SEIU) declined by 80%–from 55,000 members to less than 11,000 in a single year.

Painful Transition 

As The New York Times reported last February, the forced transition to a new model of functioning has been no less painful in Wisconsin. Since Republican-backed Act 10 “severely restricted the power of public employee unions to bargain collectively,” the state worker membership of the American Federation of State County and Municipal Employees (AFSCME) “has fallen by 60 percent; its annual budget has plunged to $2 million from $6 million.”

Founded in 1932 as a pioneering AFSCME affiliate, Madison-based Local 1 went from 1,000 to 122 members. To keep the union alive, “99 percent of what the staff does is organize,” explained AFSCME council director Marty Bell. “Without the ability to bargain, Bell’s union mostly represents members and engages in collective action,” according to The Times. Local affiliates of the American Federation of Teachers (AFT) have been similarly decimated—in part because of official resistance to lowering dues—while their counterparts in the National Education Association (NEA) had done better maintaining Wisconsin membership.

Now comes Michigan again, where the most recently enacted state “right to work” law is going into effect for 112,000 public school teachers, who represent one out of every six union members in the state. During all of August, they’ve had a chance to “opt out” of paying for their union representation. In a previous “opt out” period last year, only 1,500 or 1% did. But this summer, teachers have been bombarded with anti-union mailers and newspaper ads–the latter purchased by Americans for Prosperity, a Koch brothers creation. These have urged them to withhold annual payments of up to $822 to the Michigan Education Association and its parent organization, the NEA.

Other major unions in Michigan, including the United Auto Workers (UAW) have multi-year contracts that are in effect until 2015 or later. When those expire, more private sector union members will have the same choice as teachers this summer. As the Associated Press reported August 25, “a significant number of drop outs would deliver a financial blow to labor in a state where it has historically been dominant”—or, at least, far more influential in the past than today.

When a cash-strapped UAW hiked its dues earlier this year, opponents of that measure warned that higher dues might encourage more of the union’s 50,000 Michigan-based autoworkers to drop out next year. Of particular concern is the simmering resentment of more recently hired UAW dues payers, who are demanding changes in the Big Three’s two-tier wage structure that leaves them far below the hourly pay of higher seniority workers. If that issue is not satisfactorily resolved in the next round of auto industry bargaining, the Koch-backed Americans for Prosperity may even gain traction in a few auto plants.

Pre-Emptive Organizing Needed

In an anticipation of an unfavorable ruling in Harris v. Quinn, some SEIU and AFSCME locals, with large numbers of home-based workers paying agency fees rather than dues, stepped up their efforts to convert them into actual members, who would stick with the union when and if “free riding” became possible. These efforts have paid off, in some places, but still have a long way to go in SEIU affiliates like United Long Term Care Workers in California. SEIU-ULTCW has publicly claimed to have 170,000 “members” at the same time its U.S. Department of Labor filings showed that 80,000 or more were, in fact,  just “agency fee payers,” with little apparent connection to the union.

Newer additions to the nation’s unionized homecare workforce—like the statewide unit of 27,000 personal care attendants in Minnesota who won union recognition August 26—will need continuous internal organizing, to boost their post-election membership levels. In that new group, only one fifth of the workers eligible to vote actually cast a ballot for or against SEIU, which won by a margin of 60-to-40%. In an open shop environment, under a less friendly governor, the other 21,000 could easily go the way of SEIU’s now lost dues paying majority in Michigan home care.

As former SEIU organizer Jane McAlevey has argued, based on her past union experience in open shop Nevada, “even in the face of campaigns by employers to get workers to drop their membership, workers will continue to be members and contribute from their paycheck when they experience their union as their union.”

Ironically, some of the best examples of what McAlevey calls the “high participation model” of union building can be found in southern “right-to-work” states.  As Wilson and I reported in our “open shop” organizing chapter in Wisconsin Uprising: Labor Fights Back (Monthly Review Press, 2010), “non-majority” unions have been constructed by public sector members of the Communications Workers of America in Tennessee, Texas, and Mississippi and the United Electrical Workers in North Carolina—all in the absence of formal collective bargaining and any mandatory payment of dues or fees.

These member-driven labor organizations have devised more reasonable dues structures, ways of collecting dues voluntarily, and, most important of all, a workplace and community presence not defined by employer recognition or statute. Their survival and effectiveness depends on worker activity–the kind of member mobilization around job-related and legislative/political issues that labor needs, in many other states, to remain “organized” without the legal props of the past.

 (Steve Early worked for 27 years as an internal and external union organizer for the Communications Workers of America. He is the author, most recently, of Save Our Unions (Monthly Review Press, 2013). For more on his work, see http://steveearly.org/ or contact him at Lsupport@aol.com).  This article is reposted from the blog classism.org

 

A Labor Day Lesson on How Corporations Use Profits

by Harold Meyerson

meyersonharold2 

In corporations, it’s owner-take-all

Labor Day — that mocking reminder that this nation once honored workers — is upon us again, posing the nagging question of why the economy ceased to reward work. Was globalization the culprit? Technological change? Anyone seeking a more fundamental answer should pick up the September issue of the Harvard Business Review and check out William Lazonick’s seminal essay on U.S. corporations, “Profits Without Prosperity.”

Like Thomas Piketty, Lazonick, a professor at the University of Massachusetts at Lowell, is that rare economist who actually performs empirical research. What he has uncovered is a shift in corporate conduct that transformed the U.S. economy — for the worse. From the end of World War II through the late 1970s, he writes, major U.S. corporations retained most of their earnings and reinvested them in business expansions, new or improved technologies, worker training and pay increases. Beginning in the early ’80s, however, they have devoted a steadily higher share of their profits to shareholders.

How high? Lazonick looked at the 449 companies listed every year on the S&P 500 from 2003 to 2012. He found that they devoted 54 percent of their net earnings to buying back their stock on the open market — thereby reducing the number of outstanding shares, whose values rose accordingly. They devoted another 37 percent of those earnings to dividends. That’s a total of 91 percent of their profits that America’s leading corporations targeted to their shareholders, leaving a scant 9 percent for investments, research and development, expansions, cash reserves or, God forbid, raises.

As late as 1981, corporations directed a little less than half their profits to shareholders, but the shareholders’ share began rising in 1982, when Ronald Reagan’s Securities and Exchange Commission removed any limits on corporations’ ability to repurchase their own stock and when employers — emboldened by Reagan’s destruction of the federal air traffic controllers’ union — began large-scale union-busting. Buybacks really came into their own during the 1990s, when the pay of corporations’ chief executives became linked to the rise in the value of their company’s shares. From 2003 through 2012, the chief executives of the 10 companies that repurchased the most stock (totaling $859 billion in aggregate) received 58 percent of their pay in stock options or stock awards. For a CEO, getting your company to use its earnings to buy back its shares might reduce its capacity to research or expand, but it’s a sure-fire way to boost your own pay.

Exxon Mobil, for instance, devoted 83 percent of its net income to stock repurchases and dividends, and 73 percent of its CEO pay was stock-based. Cisco Systems devoted 121 percent of its net income to repurchases and dividends, and 92 percent of its CEO pay was stock-based.

About that 121 percent: With companies lavishing virtually all their net income on shareholders and executives, the way many of them cover their actual business expenses — their R&D, their expansion — is by taking on debt through the sale of corporate bonds. A number of companies, however — most prominently, IBM — borrow specifically to increase their payout to shareholders. And IBM is not alone. Friday’s Wall Street Journal reported that U.S. companies are currently incurring record levels of debt, much of which, the Journal noted, “is being used to refinance existing debt, being sent back to shareholders as dividend payments and share buybacks, or banked in the corporate treasury as executives consider how to potentially deploy funds as the economy expands.” Many of the companies that have spent the most on buybacks, Lazonick demonstrates, have also received taxpayer money to fund research they could otherwise afford to perform themselves.

What Lazonick has uncovered is the present-day American validation of Piketty’s central thesis that the rate of return on investment generally exceeds the rate of economic growth. Indeed, Lazonick has documented that wealth in the United States today comes chiefly from retarding businesses’ ability to invest in growth-engendering activity. The purpose of the modern U.S. corporation is to reward large investors and top executives with income that once was spent on expansion, research, training and employees. To restore a more socially beneficial purpose, Lazonick proposes scrapping the SEC rule that permitted rampant stock repurchases and requiring corporations to have employee and public representatives on their boards.

Lazonick’s article does nothing less than decode the Rosetta Stone of America’s economic decline. The reason only luxury and dollar stores are thriving, the reason German companies outcompete ours, the redistribution of income from workers to investors – it’s all here, in Lazonick’s numbers.

The lesson for Labor Day 2014 couldn’t be plainer: Unless we compel changes such as those Lazonick suggests to our model of capitalism, ours will remain a country for investors only, where work is a sucker’s game.

This article appeared on the Opinions Page of the August 26 issue of the Washington Post and is reposted with the permission of the author. Harold Meyerson is a Vice Chair of DSA. 

10 Ways President Obama Can Take Executive Action on Immigration to Protect Workers Rights

10 Ways President Obama Can Take Executive Action on Immigration to Protect Workers’ Rights Now    An Important statement from the AFL-CIO

President Barack Obama should advance the rights of workers by taking executive action on immigration. Emilio said: “I’m here because it is important that while the president considers taking administrative action to protect many of our families from being deported, he also has to consider that we are all workers and will remain as easy prey of exploitative companies if we do not count with any relief.”

Here are 10 ways Obama can take executive action right now to provide relief to workers:

http://www.aflcio.org/Blog/Political-Action-Legislation/10-Ways-President-Obama-Can-Take-Executive-Action-on-Immigration-to-Protect-Workers-Rights-Now

Sign the AFL-CIO’s petition calling on President Obama to take executive action now.

Massachusetts Teachers Association Has a New Reforming President!

Ed. note:     The election of Barbara Madeloni  as President of the Massachusetts Teachers Association (MTA demonstrates the commitment of the MTA to quality public education at all levels.  This excerpt from her first editorial statement speaks eloquently for itself.

Fighting for our vision of public education

Barbara MadeloniBarbara Madeloni
MTA President

This is my first MTA Today editorial, and I am writing it at a moment that is filled with promise and possibilities. I want to begin our conversation in these pages by saying what a great honor it is to be given your trust and the privilege of representing you as your president. I know that our new vice president, Janet Anderson, shares my excitement. Working with all of you, our members, we now have an incredible opportunity to build the MTA’s strength as an activist union so that we can reclaim our voices, our power in solidarity, and the hope of public education.

We come into office during tumultuous times — indeed, dangerous times. Corporate players, looking to privatize public education, profit from the public dollar and bust our unions, have imposed business ideology on public schools through high-stakes testing, charter schools and technocratic accountability systems. Their narrative of failing public schools and bad public school educators — along with lazy public-sector workers — has been accepted by a bipartisan legion of legislators and policymakers. Our great institutions of public higher education are subject to similar attacks and story lines.

This narrative denies the devastating impact of economic and racial injustice and shows disdain for the enormous achievements of our members. As a result, too many of our students remain in poverty, public-sector unions are threatened, and public education — the cornerstone of our hope for democracy — is endangered.

MTA members recognize that this is a critical period in our history. With the election of new leadership, members announced that we are ready to fight for public education, for our union, and for our communities.

More than 500 first-time delegates attended the Annual Meeting, buoyed by an understanding that the struggle we are engaged in needs activists, organizers and a commitment to win. Our members came to the Annual Meeting because they recognized that the MTA is each one of us, talking to each other and working together to create strategies that protect collective bargaining and due process, strengthen our union, and support the best education possible for every student in Massachusetts.

Ours is not simply a fight against corporate “reforms,” as some would frame it. Ours is a struggle for a vision of public education as a place for joy, creativity, imagination, empathy and critical questioning so that students enter the world ready to participate in democratic communities.

MTA members recognize that this is a critical period in our history. With the election of new leadership, members announced that we are ready to fight for public education, for our union, and for our communities.

In this vision, every child is exposed to a rich curriculum; every school is well-funded; all educators are given respect, autonomy and time to do our work; and parents, students and educators work together to assess and reassess our efforts. This vision must replace the dehumanizing data-driven madness that is choking the life from our schools.

Ours is a vision for economic and racial justice, a society in which every child enters the classroom from a place of material security and with the consciousness of being a valued member of our community with the same opportunities as any other child.

Ours is a vision in which higher education — public higher education — is accessible to all families and affordable to every student. Our colleges and universities are places of free inquiry and intellectual exploration of the highest order, as well as institutions that offer preparation for economic security and successful professional lives. Along with our schools, they help provide the threads that bind us together as a healthy and just society.

This fall and into the years ahead, MTA members will engage in a movement to create a more activist union and reclaim public education. The more members engage, the stronger our movement will be and the more we can do.This is a terribly important time for public education and union democracy. It is a time for struggle, but a time, as well, for the joy of solidarity and of being able to say, when asked, that we stood together for students, public education and democracy.

In solidarity, and in anticipation of many great things ahead,

Barbara

What Republicans do in office- break unions

Duane CampbellBy Duane Campbell

The Republican victories in the Michigan government in 2010 and 2012 are now achieving their intended effect. The Associated Press reports that labor, pro- business groups, and the Koch brothers among others are engaged in an intense battle for teachers to continue to support the Michigan Education Association ( NEA) or to leave their union. http://www.huffingtonpost.com/2014/08/25/michigan-teacher-union-drop-out_n_5710393.html

Many of the 112,000 teachers in the Michigan Education Association can now leave the union and stop paying fees under the law that took effect last year. Other major unions, covered by multi-year contracts, won’t reach this opt-out point until 2015 or later.

Economic power at the top is used to produce political results in elections. The rich get richer while the middle stagnates and the poor get screwed. The banks and institutions that brought us the global economic crisis got billions in governmental relief and no prosecutions for the frauds they committed while homeowners, pensioners, and working people were robbed of their life savings and now working people are losing their unions. This is the planned, deliberate result of neoliberalism at work. Continue reading

Bernie Sanders Addresses Iowa AFL-CIO: We Need a Political Revolution!

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