A perfect example of this is taking place in Rochester, New York, at a Mott's apple juice plant. See strike article. Dr. Pepper Snapple Group, Mott's parent company, made a billion dollars last year, with $555 million in profits. The price of its stock doubled. The company's CEO made $6.5 million dollars last year. And the plant itself is profitable. Yet Mott's is demanding that workers there give up $1.50 an hour in wages, and agree to a freeze in their pensions. The company's rationale is not that it is suffering, or needs the cuts to stay competitive. No, the company's rationale is that workers at the plant are overpaid compared to other workers in the Rochester area. The average wage at Mott's is $19.00 an hour, while the average wage in the area is $14. Mott's bet that workers would accept the wage cuts rather than strike. Instead, workers went on strike, and have been on strike for more than 90 days.
The company is not apologizing for trying to squeeze employees at the plant, some of whom have worked their whole lives there. It has taken out newspaper ads blaming workers for striking despite the fact that they make more than the average wage in Rochester. This tactic has resonance in these trying times. Some in Rochester are resentful that employees at Mott's make $19 an hour while they make less, sometimes much less. These folks miss the broader point that the union is trying to make: we should not be setting wages at the lowest possible point -- instead we should be trying to bring everyone's wages up. Also, higher union wages tend to pull other wages up, since non-union employers tend to pay more if there are other, higher paying union jobs in their sector.
What Mott's is really doing is breaking a contract. Not the CBA, but the social contract. After World War II there was a social contract between corporate America, workers, and the unions that represented workers. Employees agreed to work hard and help make corporations profitable. In return, corporations paid employees well and invested in pension plans that allowed them to retire with dignity. Sometime in the 80s, probably after Reagan fired all the air controllers who went on strike, the contract started to erode. The paradigm shifted so that the number one priority of corporations became increasing stock prices. With executive compensation tied to stock prices, since many of them hold stock options, maximizing stocks at the expense of workers and actual humans became the number one priority for some. The overall effect has been a shift of wealth from the middle and lower classes to the upper classes. Viva Wall Street!
The strike at Mott's involves only about 305 workers. The bigger struggle, however, implicates all of us.
You have to admire the men and women of Mott's who chose labor action rather than accepting pay cuts when the company is making money hand over fist.
