News & Politics

How Rich Executives Extract Concessions From Workers -- While Playing the Good Guy in Public

That's what's on the rise: Management attempting to exercise control over their workers -- in a brutal display of power. Give in to us or lose your paycheck right now.

 When a contract expires and the union and the company bargain over a new one, there are a few possibilities. In the majority of cases, after negotiation, they come to an agreement, in all likelihood involving compromises on both sides. If they can't reach an agreement, a strike by workers is a possible outcome—but one that's declining in frequency, "just one-sixth the annual level of two decades ago," Steven Greenhouse reports. Another outcome, or perhaps cause, of stalled negotiations is becoming more common, though: The lockout, which has:

... grown to represent a record percentage of the nation’s work stoppages, according to Bloomberg BNA, a Bloomberg subsidiary that provides information to lawyers and labor relations experts. Last year, at least 17 employers imposed lockouts, telling their workers not to show up until they were willing to accept management’s contract offer.

We've seen it in both the NFL and the NBA in the past year, of course. But in many cases, companies lock out workers who are struggling even to stay in the middle class, because they won't give up the things that might put them in the middle class. Companies lock out workers to get them to give up their pensions, to pay more for health care, to accept pay cuts, to sacrifice job security. They rely on no one noticing (besides the workers, for whom their contempt is already clear), and on any public notice the lockouts do gain assigning blame at least equally to the workers—after all, shouldn't they feel lucky just to have jobs, and be willing to make whatever concessions management demands? As Charles Pierce wrote of the NBA lockout:

[L]ockouts are, and will always be, things willed into being exclusively by management. They are not natural phenomena. They are never truly unavoidable. They don't "just happen," and they certainly do not occur because "both sides" are at fault. Lockouts occur when management believes that unions are too strong, and they occur when management believes that unions are too weak, and they occur when management doesn't want a union to exist at all. Lockouts are not devices of economic correction. That's just a byproduct. Lockouts are attempts by management to exercise control over their workers. Period.

That's what's on the rise: Management attempting to exercise control over their workers—in a brutal display of power. Give in to us or lose your paycheck right now.

Greenhouse focuses on the American Crystal Sugar lockout, which has now stretched to six months. "With American Crystal earning record profits before the lockout, the workers strongly opposed its push for concessions," he writes. Management "denies that it is seeking to break the union." But this is the company whose CEO compared a union contract to cancer, saying "At some point that tumor's got to come out. That's what we're doing." As for the significant costs of the lockout, including the cost of hiring replacement workers and dealing with accidents resulting from having inexperienced replacement workers doing tasks that require experience and skill, the CEO presented those as an investment.

As you'd expect, this is devastating the lives of 1,300 locked out workers, who have gone without paychecks for months because—it bears repeating—they wouldn't just cave when a hugely profitable company demanded that they accept benefit cuts and allow it to outsource jobs.

Nursing home workers in Connecticut are in the second month of a similar struggle, having been locked out shortly before Christmas. HealthBridge Management demanded that the workers at the West River Health Care Center in Milford accept a pension freeze, with new hires not getting any pension; pay $1,500 for individual health insurance up to $7,300 for family coverage; lose their paid lunch breaks; accept cuts on sick days and holidays and overtime pay. In addition to those direct hits at workers' wages and benefits, HealthBridge was demanding they make enormous concessions on job security and stability, giving up guaranteed hours so that a full-time worker could be made part-time with no notice or recourse, hours and shifts could be changed without notice or negotiation, allowing management to cut staffing levels to the bare minimum. (Workers report that those staffing levels have already been cut, from "six nursing assistants for each floor of 60 residents" under previous ownership to "five, and sometimes four" under current ownership.) HealthBridge touted a 12 percent pay raise they were offering in exchange for all of this—but that doesn't come close to covering the benefit cuts, let alone the loss of job security.

The workers, represented by SEIU 1199, asked HealthBridge to agree to binding arbitration, but HealthBridge said not unless workers accepted a pension freeze prior to beginning arbitration. The union offered a concession on health care costs, though not at the rates management had demanded. Management claimed it wasn't a concession at all. This strategy by HealthBridge isn't just about the Milford nursing home—it's intended as a blueprint for the five other unionized nursing homes the company runs in Connecticut. And even beyond—HealthBridge is in turn owned by Care One, which in November was ruled by the National Labor Relations Board to have illegally fired four workers in New Jersey. Workers at the Milford nursing home are waiting for the NLRB to rule on their claim that HealthBridge has not been bargaining in good faith.

Here's the best part about HealthBridge and Care One's war on their workers: At the same time as the companies are trying to get nursing home workers earning $32,000 a year to accept pension freezes and health care cuts, Daniel Straus, Care One's owner, is acting as Mr. Benevolent Major Philanthropist. His signature act of philanthropy is that he has endowed theStraus Institute for the Advanced Study of Law and Justice at New York University, where visiting fellows are paid $100,000 for a year of subsidized living in Manhattan to do research related to a yearly theme, with "a determination not to be merely an 'ivory tower', but to merge premier academic and intellectual conditions with community integration and a sense of public service." Incidentally, while Straus is demanding that his $32,000 a year nursing home workers give up their paid lunch breaks, his $100,000 a year fellows are provided with a weekly lunch.

The model of the research institute is a wonderful one that can contribute greatly to scholarship on important topics, like law and justice. But the notion that someone can be accepted and even fawned over as a believer in and supporter of anything including the word "justice" while doing what Daniel Straus is doing to his workers is a perfect symbol of how our society has come to accept that there are different rules for the 99 percent and the 1 percent. In a just and equitable society, you wouldn't get to be hailed as a voice for public service while trying to accelerate the race to the bottom for vulnerable workers.

Workers joined with NYU students to protest this week at NYU, and family members of nursing home patients joined a candlelight vigil in Milford, where:

One daughter released a letter to Straus, saying scabs at the nursing home had put her family “through hell.” She accused the temporary replacements of administering medications improperly, causing serious side effects.

“You are dealing with patients who are frail, insecure, and who depend on the familiar faces and personalities of their caregivers,” read the letter. “How would you feel if one of your family members was treated this way?”

But Daniel Straus wouldn't have to worry about that. He can afford to endow an institute in his parents' memory.

The details of every lockout are individual and appalling: NFL owners demanding that football players play more games in a season, knowing that it will appreciably shorten their lives; NBA owners issuing ultimatum after ultimatum well after basketball players had conceded enormous amounts of money; American Crystal Sugar's CEO comparing a union contract to a cancerous tumor even though his company had been wildly profitable under that exact contract; NYU lavishing Daniel Straus with praise for his commitment to ethics and justice even as he illegally fires workers and locks workers out and in every way works to increase the inequality between his income and the incomes of the workers who keep his businesses running. But the basic story of all of them is the same: Owners thought they could get more profit out of their workers. We know—JP Morgan tells us—that wage reductions drove corporate profit increases from 2000 to 2007. In the wake of the recession, with high unemployment and workers terrified that they'll be next, corporations have moved decisively to push wages down still more, to extract still more profits from workers through reductions to wages and benefits. Lockouts are just one tool of doing that, and they're visible only because they happen to unionized workers, who can fight back at least a little bit.