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Outsourced Oreos

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It’s no wonder that growing number of Americans would be attracted to either socialism or fascism when economic stagnation and working-class decline are the reality for millions of people. A key part of this of course is outsourcing industrial production to other nations, which destroys the ability of working-class people without college educations to live a dignified life. Given that the core Trump supporters are working-class whites, this is an issue that we need to take seriously and try to fix or stop if we want social stability within the United States. Thus when Nabisco decides to outsource Oreo production to Mexico, it drives more Americans into economic crisis.

On Chicago’s South Side, about 1,200 workers have been baking chocolate wafers and mixing the cream filling for Oreo cookies for decades at a plant on South Kedzie Avenue. The whole neighborhood smells fantastic.

Last summer, managers held a companywide meeting. The workers expected to hear updates for a planned $130 million upgrade to the facility.

Instead, the company demanded its workers swallow $46 million in wage and benefit cuts. Otherwise, the investment would go south of the U.S. border, said Irene Rosenfeld, CEO of Mondelez International, which owns Nabisco. Rosenfeld received almost $200 million over the past eight years in pay and benefits.

This is how CEOs use a bad trade deal as a club to beat workers.

Sure enough, at the end of July, managers announced a plan to shift some production from Chicago to a factory in Salinas, Mexico.

And once that facility begins to make Oreos and other treats, 600 employees in Chicago will lose their jobs, said managers at Mondelez, the global food giant.

The above is by AFL-CIO president Richard Trumka and Bakery, Confectionery, Tobacco Workers, and Grain Millers International Union president David Durkee. They damn the trade agreements such as NAFTA for destroying working-class jobs, note how Nabisco’s corporate giant could save money other than union-busting and outsourcing, and argue they will defeat the TPP. I’m awfully skeptical of the latter claim, but of course they should try because NAFTA and the TPP are disasters for American workers. I don’t doubt that such agreements are great for the American elite, corporations, and maybe foreign policy. But for the American working-class, they are terrible, unmitigated disasters. And they are an important part of the reason why the white working-class is attracted to the fascism of Donald Trump.

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  • Linnaeus

    OT, but this:

    On Chicago’s South Side, about 1,200 workers have been baking chocolate wafers and mixing the cream filling for Oreo cookies for decades at a plant on South Kedzie Avenue. The whole neighborhood smells fantastic.

    explains the brownie-like smell that I often detected when driving into Chicago on I-94.

    • Denverite

      For a brief time I lived in an apartment immediately east of the stockyards (most are closed, but there were still a few operations, including a Hormel plant). When the wind came out of the west during the summer, the smell of ham was pervasive.

      • Alexander OConnor

        Did you live there in the early 70’s or late 60’s because if not the stockyards have been closed since 1971.
        There is in its place a industrial park that does have several factories etc present….it has not been a “stockyard” in over 45 years.
        http://www.wttw.com/main.taf?p=1,7,1,1,49

        • Denverite

          I thought there was a single place still operating circa early 00s? A small lamb and sausage place?

          Anyway, the Hormel factory wasn’t a stockyard, it was a processing plant.

          [ETA: Anyway, this would have been around 2005. Our landlord let us stay in a place he had in Canaryville when he tore down our two flat until we could find something else.]

          • Denverite

            I checked. It’s still there. Chiapetti. High end butcher shop in the stockyards.

    • Alexander OConnor

      Unlikely, since the Nabisco bakery is at 73rd and Kedzie. You more the likely smelled the Blommers chocolate factory which is essentially at Milwaukee and Kinzie and all but abuts the Kennedy (94)

      • Linnaeus

        Thank you for solving that mystery. I had long wondered what the source was.

  • Bob

    I grew up a couple miles from the plant and remember what a thrill it was as a kid to drive anywhere near it. If you gotta have industrial odors in your neighborhood baked goods are the way to go.
    Sad story though. The south side has been decimated by the loss of manufacturing jobs.

    • CHD

      On my way to work I used to ride my bike past the factory that made SteakUmms. Not as good as a bakery certainly, but as a carnivore it wasn’t bad either.

      • Crusty

        If there was any food I expected to be made in a factory in China that shares space with a lead paint manufacturing operation it would have been SteakUmms.

    • DrDick

      This just continues a long process of economic decimation of the South Side.

      • Denverite

        I dunno. Parts of the near South Side (South Loop, University Village, Little Italy, Pilsen, Bridgeport, Chinatown, Bronzeville) seem to be doing pretty well last time I was there. Hyde Park too.

        • DrDick

          The now mostly white* areas that have been gentrified (most of the ones you list) are doing fine, though there are not a lot of blue collar jobs there. The predominately black and Hispanic neighborhoods, which dominate the Southside, are in severe decline. Your hosts in Chicago would actively discourage you form going there.

          * Bronzeville is the exception here

          • Denverite

            Er, I doubt if South Loop is even plurality white, much less majority. When my kid was in school there, the school was plurality African-American, with the remainder split pretty evenly between white and Asian.

            Pilsen is still overwhelmingly Latino, though probably not on the edges.

            Chinatown speaks for itself.

            Bridgeport is one of the most diverse neighborhoods in the city, probably right behind Rogers Park. It’s almost exactly a third white, a third Asian, and a third Latino.

            And given that the hosts we usually stay with live in a Latino neighborhood on the South Side (Brighton Park), we usually aren’t so discouraged.

          • Jackov

            The Voorhees Center at UIC did a socioeconomic analysis of Chicago’s neighborhoods from 1970-2010. The typology for the South Side is almost all serious decline, moderate decline or no change (because the neighborhood was already in extreme poverty in 1970.)

            • Denverite

              Funny. I was right on the specific neighborhoods — but those neighborhoods are pretty much the only ones that didn’t decline or aren’t extreme poverty.

              • DrDick

                Which was my point. South Loop is basically part of the larger Bronzeville. I did say “black and Hispanic” with Pilsen in mind and Chinatown is a small island in a sea of black.

                • Denverite

                  Not if your point was that the neighborhoods I mentioned were white and gentrified! They’re all minority-white except maybe University Village and Little Italy. And they’re all non-gentrified except for South Loop and University Village (and maybe Little Italy).

                  But these all seem to be outliers, probably for one-off reasons. (University Village, Little Italy and Hyde Park are all centered around a university. Bridgeport saw a lot of influx by relatively wealthy Asians and professionals based on its proximity to Chinatown and downtown. Ditto Pilsen to a lesser degree. Ditto Bronzeville with respect to African-American professionals.)

                • DrDick

                  Actually, that report confirms what I said. The areas on the southside which have improved are majority (or at least plurality) white and gentrified. Those which have declined are black and Hispanic.

                • Denverite

                  The areas on the southside which have improved are majority (or at least plurality) white and gentrified.

                  That simply isn’t true. I’m looking at Bridgeport and Armor Square (where Chinatown is) in the report. Both improved in the time period in question. Neither is classified as gentrified. Armor Square is majority Asian. The report identifies Bridgeport as “equal parts White, Latino, and Asian.” Page 22 of the report.

                  ETA: Also Pilsen. No decrease. Not gentrified. In the “Poverty” not “Extreme Poverty” category. Majority Latino.

                • Denverite

                  Missed the edit window.

                  This:

                  http://statisticalatlas.com/neighborhood/Illinois/Chicago/Bridgeport/Race-and-Ethnicity

                  Says Bridgeport is slight plurality Asian.

                • Denverite

                  Finally, DrDick, where did you live on the South Side of Chicago?

                  I lived on the 800S block, the 3500S block, the 3700S block, the 4400S block, the 5200S block, the 5400S block, and the 6000S block. My kid was born on the 5800S block, and I was married on the 5900S block. I didn’t keep track, but I suspect I spent years in Chicago where I didn’t cross Madison. Certainly months on end. When we go back to visit (not often enough!), we usually stay with friends in the vicinity of Western and Archer.

                  I’m just curious as to what your experience on the South Side is.

  • Outsourcing of jobs to chase lower labor costs is an issue that cuts across racial and ethnic lines, affecting the entirety of the American working class, which itself is disproportionately people of color.

    And don’t ever let anybody tell you different.

    • Troll comment deleted

      Troll comment deleted

      • I’ve never even heard of that investment platform, and I seriously doubt a web-based investment site ever had “millions” of employees even before its demise.

    • DrDick

      Low wage jobs, where the impact of the minimum wage increase is greatest, are disproportionately held by minorities.

  • 600 will lose their jobs now, the rest later.

    I eagerly await the Clintonista explanation when Hillary suddenly decides after the election that the TPP is not so bad, after all. Right after she decides to ramp up the ‘war’ against ISIS.

    • Hillary Clinton wouldn’t do that. She said so. She said she was against it a whole bunch of times.

      I can find you links. Do you want me to find you links? Cuz I can.

    • Crusty

      If you can predict the future so well, I recommend buying some lotto tickets.

      • I would be happy to be proven wrong.

        • He’s got you there, C.V. You’d have to be psychic or something.

          You really don’t have any more of an idea about what she would do than anyone else.

  • Brett

    Mexico was joining the WTO around the same time as NAFTA, so I suspect it wouldn’t have made much of a difference for manufacturing in the US if NAFTA had never been ratified. Either way, trade barriers would have come down, and they would have shifted plants.

    Rosenfeld received almost $200 million over the past eight years in pay and benefits.

    There’s your reason right there. The share value of companies tends to go up whenever they outsource product and cut pay, regardless of whether it’s a good long-term strategy. And at eight years at the top, Rosenfeld’s already beating the average CEO tenure time – she could leave at any time.

    • DrDick

      It is and always has been all about the rents, not “efficiency”.

  • Troll comment deleted

    Troll comment deleted

    • Arouet

      See that’s too hard a troll – it’s impossible to willfully suspend that much disbelief.

  • Tracy Lightcap

    Outsourcing is only part of the problem and not a very important one either. The real issue is the productivity of American industrial workers.

    The US is still the biggest manufacturing economy in the world and has been getting stronger every year. And we’ve been bleeding industrial jobs over the last 40 years, regardless. That’s in part because of the trade agreements, of course, but the main reason is that American industry has become so productive that fewer workers are needed. Many fewer. Automation and the use of computer controlled machines is the main culprit here and getting rid of every trade agreement in creation won’t change that one whit.

    The root of the problem is that the kind of industrial jobs once held in large numbers by the (to use the latest barbarism) “non-college educated working class” are gone, at least in this country. This does not mean that the “non-college educated working class” doesn’t still hold a lot of industrial jobs; they hold most of them. The problem is that the number of jobs continues to decrease as industry becomes more productive. We could help this with better trade agreements and selective tariffs, but the international treaties we’re part of will make that difficult.

    What we need is a jobs policy aimed at providing incentives to open new areas of industrial production. We have something like that in the alternative energy programs and could have more with an infrastructure renewal initiative. We could use a lot more. An example: over half of the jobs in STEM are held by people with a high school degree (you can check). Getting our government R&D programs back to where they were 20 years ago would be an absolute bonanza for jobs in this sector. And we could sure use the extra tech as well.

    So, yes, better trade agreements (real ones would help) by all means. But a jobs program first and foremost.

    • What we need is a jobs policy that prevents the ones buying the robots and doing the outsourcing from running off with all the gains from this increase in efficiency.

      • Arouet

        That’s not a jobs policy, but we do need it. As I keep saying, long term opposition to TPP is mostly pointless (not to mention counterproductive to other goals) because the kinds of jobs it threatened are going away, the only questions is what or whom takes their place.

        How to deal with the resulting maldistribution of wealth is a much bigger and more difficult problem.

        • efc

          How does accepting the TPP as inevitable help introduce polices that impact the maldistribution of wealth? The same people who want the TPP ratified are either against those policies or if not against them, not actively fighting for implementation. If you give these people what they want, what incentive or leverage is there to get the distributional policies enacted? Or is the thinking the TPP will “heighten the contradictions” such that politicians will have to introduce the policies because voters are demanding they do so.

          • Arouet

            That’s in no way what I claimed. I’m just saying TPP is largely irrelevant to the larger problem. If it’s not signed, you might save some few jobs for some short period of time. Weigh that against significant costs – in foreign policy and elsewhere – to not signing it.

            Personally, I think the latter outweigh the former. I’m open to disagreement. But let’s not pretend stopping TPP is a panacea that will completely arrest the flow of jobs overseas or into automated processes.

      • Tracy Lightcap

        That’d help some, but a tightening of the job market and a surge of new industrial development would help even more. I remember the 90s and how, all of a sudden, people who were “unemployable” were getting jobs all over the place and wages were actually going up. What we need is a sustainable version of that. We could do that with a more progressive tax policy, provided we plow the cash back into government spending supporting industrial development. That won’t be easy, but we might get something like that out of Hillary if she ends up with a cooperative Congress (I can hope, can’t I?).

    • Scott P.

      Outsourcing is only part of the problem and not a very important one either. The real issue is the productivity of American industrial workers.

      Yes, if you plot a graph of US manufacturing jobs and don’t label the X axis, it is impossible to detect the passage of NAFTA against the trend.

    • “Open new areas of industrial production”? To make what? The material footprint if GDP per capita gas been static or declining in rich countries for decades. It’s only been going up globally because of outsourcing to China, but the footprint is turning the corner there too, with significant drops in coal and steel production. We will never need more industrial production, physically, than we have now. US manufacturing is not in decline, it’s “only” the jobs that have gone.

      • Tracy Lightcap

        Now, I have to say that’s a standard Luddite position. If there is one thing we can say without fear of contradiction about modern economies, it’s that there is a continuous flow of innovation that has replaced and augmented older lines of industrial production for over 300 years. In 1900, the sudden completion of the railway net led to considerable fears for the future. Until Henry Ford produced the Model T. All of a sudden there was an entire new area of production and jobs galore.

        The one thing we can say for certain about new fields of production, however, is that they won’t need the skills people used in the old ones. Education is no panacea in the face of an economy that simply ignores job policy (like ours, for instance). A combination of better education and a high-tech jobs program (alternative energy is the usual suspect) would do much to help our struggling working class, however.

        And, of course, there’s always service industry. We could do more there as well. No need to give up the ship because we already have enough coal and steel. The secret in the future is to replace those industries, not moan about their decline.

  • Gareth

    I can’t help noticing that the workers you want a benevolent state to support make… Oreos and fast food. If the state is powerful enough to save their jobs, isn’t it powerful enough to ban those products, as a danger to public health?

    • Linnaeus

      And make us buy broccoli.

      • Chocolate covered broccoli. Sandwiched between two wafers.

    • I will take pointless non-sequitur questions for $100 please Alex.

      • Gareth

        You’ve come out in strong support of workers making Oreos. Isn’t the overall effect of the product itself relevant?

        • No.

          • Gareth

            What do you think about labour issues in the tobacco industry?

            • Precisely as I do with workers in every other industry.

              • Gareth

                OK, fair enough. I suppose you have the same opinion about nuclear weapons, homeopathic remedies, and so on. And I already know you support workers chopping down old-growth forests and mining coal. But once you start a political discussion about a particular group of workers, people are going to bring their opinions about what the workers are actually doing.

                • Arouet

                  Oh yes, god forbid people make a decent living building nuclear weapons which are intended specifically to ensure that other nations’ nuclear weapons will never be used against their fellow citizens. They’re the worst kind of monsters.

                • liberalrob

                  But once you start a political discussion about a particular group of workers, people are going to bring their opinions about what the workers are actually doing even if that has nothing to do with the phenomenon you were discussing.

                  FTFY.

                • so-in-so

                  Do groups of workers get together and decide to produce unhealthful products? Or do rich .01% “Job Creators” hire workers, and pocket the majority of the profits? It does matter.

                  If the government banned Oreos and decided to pay the Nabisco company compensation but not the workers displace, I’m pretty sure Erik would have things to say about that. Not that he would be the least surprised.

                • Supporting worker rights only in industries that you personally like is a sort of political philosophy I guess.

                • Nick056

                  If this factory were closing because nobody was eating oreos anymore I doubt Loomis would have even made this post. But we’re still putting junk in our faces; we’re also further alienating blue collar workers by displacing them.

        • rea

          How dare you insult the chocolately goodness of Oreos!

          • advocatethis

            Is that chocolate? Really?

            And I don’t think we can even begin to address what the filling flavor is supposed to be.

            • Gareth

              White.

            • Hogan

              Is “sweetened lard” a flavor?

              Or what Gareth said.

    • Murc

      If the state is powerful enough to save their jobs, isn’t it powerful enough to ban those products, as a danger to public health?

      Yes. Your point?

      • Vance Maverick

        Can the state create a weight that is so heavy that not even the state can lift it?

        • sharculese

          No, but Trump has promised that, if elected, he will square a circle.

          • liberalrob

            And get Anaxagoras to prove it!

  • Davebo

    Edvard Munch’s “Scream” series is the most abused and over used set of images.

    • Maybe its just that our reality demands its use so credibly and extensively that it simply has become ubiquitous.

      • Davebo

        I don’t think it’s that bad yet.

        Yet…

    • Lee Rudolph

      Is it a series proper, or merely a multiplet?

  • liberalrob

    Hydrox cookies are set to make a comeback, could challenge rival Oreos

    “Nostalgia is powerful,” said Kassoff, chief executive of Leaf Brands, a Newport Beach candy company that manufactures Hydrox at its factory in Vernon [CA]. “I want to capture that experience people had as a kid … the happier times that people remember.”

    Kassoff said Hydrox cookies are crispier, made of darker chocolate and have a less sugary filling with no high fructose corn syrup. He has also touted the cookie’s distinction of being made in the U.S.

    Also, if you simply must have Mexican Oreos, you can buy Gamesa Giros

    • nixnutz

      That’s cool, their raison d’etre kind of disappeared after Oreo went vegetarian and kosher, the made-in-America angle could work. I could never tell the difference anyway.

      • Marek

        Really? I always thought Hydrox were obviously worse. Now I learn that it might have been the HFCS. Ugh.

      • heckblazer

        Oreos are a Hydrox knock-off, believe it or not.

    • twbb

      The problem I have with commercial Mexican baked goods is the cartoon mascots on the packaging are so offputting…

  • Origami Isopod

    But, but, but shouldn’t we stop being so parochial with our concern for Americans without jobs? Don’t Mexican workers deserve those jobs too????

    • liberalrob

      Wut

    • BiloSagdiyev

      Huh? Factories in Mexico are for jobs for desperate Central American migrants.

  • CJColucci

    This is great news. I always preferred Hydrox, and now I can support American workers.

    • Mike G

      Who ever came up with that name for a food product?
      It sounds like a chemical company.

      • According to Wikipedia (with a citation to Fortune magazine),
        “Hydrox derived its name from the atoms comprising water. In 1908, the creators of the cookie were looking for a name that would convey ‘purity and goodness.'” The “creators” were the Sunshine biscuits people.

  • UserGoogol

    I don’t see how you can connect outsourcing to Bernie Sanders. Bernie Sanders’s support skews young, and they’re not the ones having their jobs outsourced. People who had jobs before NAFTA was signed into law are in their forties at the youngest. (Give or take teen jobs, but it’s not like NAFTA was the start anyway.) Young people want an income, but they have no particular attachment to the jobs that were outsourced, that’s just as abstract as any other potential jobs some other policy could have created.

    • Bill Murray

      well perhaps Bernie supporters can see the jobs they could have had have been taken by the outsourced people leaving fewer jobs for the young

  • ProgressiveLiberal

    I was under the impression that if you wanted less of something (imports of oreos, for example) you raise the price.

    If only there was a way to raise the price on all imports equally and decrease the price on all exports equally…so that money stayed in the US, being paid to US workers, instead of being sent to mexico to be paid to mexican workers, who would then spend that money in mexico, creating more jobs…

    If only there was a way…

  • CSI

    which destroys the ability of working-class people without college educations to live a dignified life

    But ultimately college educated will be affected too, which we are starting to see.

    • Shirley0401

      I’d argue the college educated are already affected, as they’re competing with the non-college educated for a lot of jobs. This might not apply so much to graduates of top-tier (or high second-tier) colleges, but even recent grads from very good state schools are having trouble finding work in their fields, and are going up against those with HS diplomas for sales/service-industry/&c jobs.
      There simply don’t seem to be enough “good” jobs for plenty of people across the socioeconomic spectrum, at all levels of education.

  • YoursInTheSnow

    My daughter was looking for a subject for her high school government class and has grabbed this. I asked her what conclusions she would draw. She is hoping to organize a grassroots boycott of Oreo’s. She sees the destruction of the middle class as a function of people like Irene Rosenfield having no idea when they have made enough money. Not bad for a 16 year old.

  • guthrie

    I had been thinking that food was one of the last local/ regional things that existed in this world where everyone wears sweatshop made clothing from the same factories. Obviously I was too naieve.

    • BiloSagdiyev

      I have seen frozen vegertables at Whole Fooda that were from China. You never know anymore.

      • shah8

        man, that made me paranoid. China has serious soil pollution, and I wouldn’t want veggies from there just because…

    • Linnaeus

      Here in the US, we catch wild salmon and export it, while importing farmed salmon. On top of that, US-caught wild salmon that is sold in the US is often sent to China for processing, then shipped back to the US.

  • agorabum

    Ok, I get the high level arguments about trade. But in the current world, is there something that says – no way these jobs go overseas but for this trade agreement? Or is the $5 a day vs $20 an hour split so big that even with older trade restrictions, they still would have gone abroad?

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