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How Corporations Blame Higher Prices on Minimum Wage Increases

[ 77 ] July 15, 2015 |

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Above: The Chipotle CEO business model

This is a good discussion on the bogus connection between higher minimum wages and higher prices. The real issue leading to higher prices are CEO salaries and corporate profit margins, not a slightly higher minimum wage.

Chipotle is just the latest company in the city to claim labor costs as the reason for price hikes. It sounds logical. Wages go up 10%, prices of menu items go up 10%. It’s fair, right? But Chipotle co-CEOs Steve Ells and Monty Moran’s earnings in 2014 were $28.9m and $28.2m, respectively. Ells also brought in around $42m in stock options in 2014, yet prices must go up because the lowest paid workers received a $1 raise? This is yet more evidence that executive pay and corporate profit margins must be maintained, at the expense of minimum wage workers.

It doesn’t make sense considering Chipotle’s growth in both sales and profits over the past year. The company saw a 47.6% increase in profits to $122.6m, while sales were up 20.4%, to $1.09bn. Yet, with the company wanting to maintain specific profit margins, prices go up, even when they don’t have to.

Ells and Moran saw their own personal pay increase 15% year-to-year, according to Chipotle’s own reporting – that’s millions of dollars – but sadly, minimum wage debates over the past year have highlighted how companies, from Chipotle to McDonald’s to Walmart, just can’t afford to give their workers a living wage.

Ells and Moran could easily have taken a pay cut, or frozen their income for the year, but instead Chipotle spokesman Chris Arnold was clear about what the company wanted:

California, and San Francisco in particular, has a high cost of doing business. In San Francisco, for example, our occupancy costs are about double the Chipotle average as a percentage of sales, and our menu prices there are right around the average for Chipotle restaurants around the country, so increases to wages can have a greater impact than they might elsewhere.

Of course, people largely blame higher prices on lazy workers, supporting the CEOs destroying this country’s middle class in order to buy another ivory backscratcher.

This Day in Labor History: July 15, 1959

[ 10 ] July 15, 2015 |

On July 15, 1959, the United Steelworkers of America went on strike to protect its significant victories won after World War II in running the shop floor and empowering its members to live a middle-class lifestyle. Perhaps the most underrated event in American labor history, the steel strike of 1959 touches on many of the key labor issues of the postwar period. Combining the total number workers and length of the strike, companies lost more employee hours than any other strike in American history. It showed the height of worker power in American labor history on the shop floor and through the contract. It also demonstrated how government would still bust strikes when it could, a blast from the past and a foretaste of the future. Yet it also suggested just how far unions had come in American society, given how the USWA overcame these challenges and won. Finally, this was the end of the peak of American labor militancy.

During the 1950s, the nation’s major unions mae enormous gains in wages and benefits for their members. That was particularly true of the United Auto Workers and, to a slightly lesser extent, the USWA. After Philip Murray died in 1952, David McDonald became union president. McDonald is no one’s idea of the ideal union president, particularly given his total lack of charisma. There’s a reason no one talks about him today. But he was good at forcing the companies to open up their pocketbooks in contract negotiations and forcing their hand on shop floor issues. He was irritated that the UAW generally won better contracts and worked hard to make up that gap. During the 1950s, the USWA won significant wage gains, health insurance, pensions, vacation time, and other hallmarks of the working class becoming middle class through union contracts. This often took place through strikes, including in 1946, 1949, 1952, and 1955. A 1956 strike was a major victory for the USWA (and for McDonald’s leadership), leading to big wage and benefit gains.

By 1959, the American steel industry was incredibly profitable, with very little foreign competition having developed by this time. But the companies wanted to push back. Their specific line of attack was to take control of the shop floor through eliminating a section in the union contract that had given workers significant shop floor power through the grievance process. Effectively, the USWA was using the grievance procedure to take away management prerogative to rule at the workplace. This included making it very difficult for companies to lay off workers whose jobs were replaced by automation. While the high wages and benefits rankled the companies, it was the sheer gall of employees to tell them how to run their factories that really infuriated the steel industry. And so the companies decided their target would be the shop floor clauses, with the hope that this was a first step to regaining control over their workers. Less than a month before the expiration of contract, and in the middle of ongoing negotiations, the companies offered a slight wage increase in exchange for union givebacks on scheduling, seniority, staffing, and work standards. The hope was to force the union to strike and then the companies would be willing to give up everything but shop floor control givebacks.

This strategy certainly worked at first. The USWA completely rejected the corporations’ offer. More than 500,000 workers went on strike at factories around the nation on July 15. Steel production declined 90 percent. AFL-CIO president George Meany wasn’t happy with McDonald or the USWA. Being a Cold Warrior first and class warrior second, Meany worried the strike would undermine national security. He really wasn’t in a position to distance himself too far from one of the federation’s most powerful unions, so he gave it a very mild endorsement while pressuring McDonald to settle.

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The strike convinced President Dwight Eisenhower to invoke the back to work clauses of the Taft-Hartley Act, forcing an 80-day cooling off period. This then led to the union filing suit in federal court that Taft-Hartley was unconstitutional. Unfortunately, the Court upheld the law by an 8-1 majority. The strikers had to return to work after 116 days on the pickets. Yet the union was able to survive this frontal assault. Kaiser Steel, which had long had been more willing to work with labor than many of the other companies, caved and took out the offending provision while offering a small wage increase. But the rest of the companies held out. Finally, Eisenhower realized the workers would strike again if the companies insisted on the workplace rule provision. He had Richard Nixon tell US Steel chairman David Blough to give up. With the government clearly stepping in on the side of continued steel production, the companies did surrender. The contract created a committee for the union and management to study the issue of shopfloor rights.

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One lesson of this strike for us is that the idea that the companies ever really accepted unionization, even at the peak of labor’s power, is a lie. There was never a period where the companies saw unions as partners. Rather, they wanted to crush them and return to the 1920s without union shops. The reason they couldn’t is worker power. Corporations had to make public statements that they accepted organized labor as a partner. These were lies but they also reflected the need to appease that worker power. The corporations may have lost the 1959 strike, but the union was not is a good position to win in the long run. Ultimately, the rise of steel imports, which some have claimed were a result of consumers looking to foreign competition in order to avoid production problems because of these frequent labor conflicts, would undermine both the industry and the USWA. The 1959 strike was the last nationwide steel strike of the era. In the 1962 contract, McDonald did give back quite a bit of shopfloor control and made it easier for companies to let workers go because of automation. He became convinced about that the steel industry was increasingly less competitive and hoped these compromises of worker power would help. They did not. But they did create a rank and file rebellion against McDonald and in 1965, he was replaced by I.W. Abel, a very rare defeat for a major union leader to that point in labor history. But the American steel industry did not reverse its long, slow decline.

Somehow, there is not a really key historical work on the ’59 strike. Hopefully this changes soon. Jack Metzgar’s autobiographical remembrance Striking Steel is however a fantastic book that you all should read.

This is the 151st post in this series. Previous posts are archived here.

….I forgot to insert this earlier. Dave Alvin wrote a song about the strike. His father was an organizer for the USWA during these years.

Murnau

[ 15 ] July 14, 2015 |

nosferatu_2

Someone needs to make a dark, shadowy film with angular shots about this heinous crime, no doubt perpetrated by a mastermind criminal.

Today, the story of Murnau’s death gets a little bit weirder: Der Spiegel is reporting that someone has broken into the Plumpe family crypt outside Berlin and stolen the director’s head.

It is unknown how or when the perpetrators gained access to the tomb, though, notably, the coffins of the director’s brothers Robert and Bernhard were not disturbed. The Plumpe crypt is located in Südwestkirchhof Stahnsdorf, a large woodland cemetery known for its mausolea and dense forestation. According to local police, the break-in was first noticed on Monday morning.

This is not the first time that someone has broken into the crypt, and, at present, the cemetery’s administrators are weighing whether to permanently seal the tomb or to bury the director’s body separately from the rest of his family to prevent further vandalism. Police have reportedly found wax drippings at the scene, suggesting either a ritualistic element, or that Murnau’s head was stolen by old-timey grave robbers by candlelight.

Punishment Park

[ 49 ] July 14, 2015 |

I have discussed the 1971 New Left dystopian film Punishment Park here a bit before. I’ve mentioned that it is a great leftist film and that the wonderful Paul Motian did the soundtrack. And I think I’ve mentioned the plot–that post-Kent State, Nixon has ordered the rounding up of all the nation’s leftists and sent them to prison camps where they are tried by makeshift tribunals of squares and then forced into Punishment Park, a Mojave Desert training course for cops to kill hippies. This is great stuff. Great. And it is on YouTube. Watch it. Watch it now.

The GOP in 1 Facebook Post

[ 79 ] July 14, 2015 |

OK rep Party Circle_Elph 485-301

This is the text of a Facebook post from the Oklahoma Republican Party:

The Food Stamp Program, administered by the U.S. Department of Agriculture, is proud to be distributing this year the greatest amount of free Meals and Food Stamps ever, to 46 million people.

Meanwhile, the National Park Service, administered by the U.S. Department of the Interior, asks us “Please Do Not Feed the Animals.” Their stated reason for the policy is because “The animals will grow
dependent on handouts and will not learn to take care of themselves.”

Thus ends today’s lesson in irony ‪#‎OKGOP‬

www.OKGOP.com

No comment is necessary

Homer Simpson Is Real

[ 46 ] July 13, 2015 |

Found this in the archives today. It’s faint, but readable. And it shows that Homer Simpson is real and evidently worked in the Fermi reactor in Michigan during the 1960s.

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Sorry for the large size, I wanted to make it as readable as possible.

Further documents suggest it was in fact a beer can.

Does Evangelicalism Have to Be Anti-Labor?

[ 30 ] July 13, 2015 |

No. Although I think the case is overstated here because while there are examples of evangelicals being pro-union during American history, by and large evangelicals have been anti-union a lot more than not.

National Parks and Minorities

[ 102 ] July 13, 2015 |

Grand Teton National Park

Glenn Nelson challenges the National Park Service to do more to welcome minorities. He notes how very few visitors to national parks are people of color and the very strong disconnect between these central places in the American experience and minorities.

The place to start is the National Park Service. About 80 percent of park service employees in 2014 were white. The parks’ official charity, the National Park Foundation, has four minority members on its 22-person board.

Minorities did not exceed 16 percent of the boards or staffs of some 300 environmental organizations, foundations and government agencies included in a 2014 study for Green 2.0, an initiative dedicated to increasing racial diversity in such institutions. Minorities hold fewer than 12 percent of environmental leadership positions, and none led an organization with a budget of at least $1 million, the study found.

The National Park Service is the logical leader to blaze a trail to racial diversity in the natural world. It has a high public profile, and its approaching centennial can serve as a platform for redefinition.

But the agency has so far missed the opportunity. It doesn’t even know how many minorities visit the parks these days because it doesn’t routinely track such information. Its initial centennial-related campaign, Find Your Park, includes but doesn’t specifically target minorities and was delivered mainly to the already converted.

Efforts like handing park passes to fourth graders and their families, firing up Wi-Fi in visitor centers, and holding concerts on seashores or valley floors will similarly miss the mark. The park service should use its resources and partnerships to execute an all-out effort to promote diversity within its ranks and its parks. Its outreach should be tailored to minorities and delivered where they log in, follow, Tweet, view or listen. The park service needs to shout to minorities from its iconic mountaintops, “We want you here!”

There are good points here, but there are a couple of issues worth noting. First, the NPS has done a lot to include minority voices and perspectives in the parks. It has worked very hard on this, to the point where nearly every park has signage about minorities who lived there and points out a lot of the uncomfortable racial past of our history. But a lot of this takes place at the national historic parks, as opposed to the classical national parks that make up the jewels of the NPS. Nelson uses Mt. Rainier for an example. It’s been awhile since I’ve been to the visitor center up there so I don’t know if it discusses how Native Americans thought about the mountain for instance. But even if it does, does that resonate with African-Americans in Seattle? No.

But the NPS does actively recruit minority populations and tries to get them into those parks. In 1999, I spent a long summer working at the Martin Luther King National Historic Site in Atlanta. Most of my co-workers were African-American. There was an effort within the NPS to get African-Americans out of just working the urban parks and, specifically in this case, to get them to apply to work at Mammoth Cave National Park in Kentucky. My coworkers were not having it. They simply had no interest in living in rural Kentucky around what they felt were hostile white people. And who could blame them? Nelson discusses this in his article and in the end, most of these park jewels in rural places are coded white in many ways. They are largely surrounded by white populations in the small towns around the parks. They were defined as sublime places by whites and preserved to serve white tourists. John Muir in Yosemite and the U.S. Army in Yellowstone fought to keep people of color from using these places in their traditional manner. Hiking and camping and climbing are almost exclusively white activities in our imaginations. Visits to national parks (or national forests or a lot of other nature-based activities–or even Cape Cod) means being surrounded almost exclusively with other white people. So there are a lot of issues here. And there’s no easy answer. It might be that the NPS more directly targeting minority populations would help, but Nelson’s ideas don’t exactly seem to be that well-developed. Tweeting isn’t going to make African-Americans more comfortable in small town Wyoming.

Unions and the Democratic Primary

[ 123 ] July 13, 2015 |

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The outpouring of support for Bernie Sanders has included a lot of labor people. That has made labor executives worried. First, Richard Trumka reminded state federations and locals that they don’t have the right to endorse anyone. Then, the American Federation of Teachers came out and endorsed Hillary Clinton.

This doesn’t surprise me and is pretty unfortunate, but is understandable. Union leaders are a lot less interested in primary politics and supporting (likely) losing primary campaigns from the left than in creating solid support from the likely winner. They want to make sure they are close to President Hillary Clinton rather than primary runner-up Bernie Sanders. You might say that unions should be about democracy and their members should have the right to endorse the candidate who most represents their views. I might well say you are right about that. But in the hard realpolitik world of modern class-based politics, with unions facing death, one can see why Trumka, Weingarten, and other labor leaders (expect an SEIU endorsement of Hillary very soon), would rally around the winner and hope to be closer to her inner circle.

But if the Bernie surge continues and he develops a shot to win, labor is going to look pretty bad here.

Selma Lives

[ 14 ] July 13, 2015 |

politifact_photos_Selma_Bloody_Sundaypng

I was reading this old Pete Axthelm profile of Ken Stabler from 1980. A real classy guy. Among the highlight is when he and his team set up a reporter they hated for a cocaine bust.

The only affair involving Stabler that brings no laughter, it seems, is the ugly incident after the 1978 season, when Sacramento writer Bob Padecky was set up for a cocaine bust in Gulf Shores. The circumstantial evidence against Stabler was considerable. Padecky was one of his least favorite writers, yet was invited to Stabler’s hometown for an exclusive interview. Coke was planted under the fender of his rented car and police were tipped off. Padecky unwittingly trivialized the incident a bit with his frenetic by-lined account of his harrowing jail term—which lasted five minutes before the cops realized it was a prank. But the fact remains that someone had executed a cruel and potentially dangerous stunt, and many observers felt that some of Stabler’s friends had participated—with or without his knowledge. When the subject is raised now, all the whimsical and piratical expressions dissolve into a look of abject innocence. “I just don’t know what happened,” he insists. “Maybe nobody ever will.”

Sure thing Kenny. Typical Raider.

Anyway, there was also this:

Properly fortified, the group raced into Selma, where they visited Pitts’s house and drank some more beer. Then, with no real explanation, the group was off to a predominantly black social club in Selma. There were several rounds and some curious glances before it became apparent that the group was on a political mission. Pitts’s friend, Joe T. Smitherman, was running to regain his job as mayor. He had resigned in July of 1979 for personal reasons. But he figured he could get it back with some classic New South campaigning, including an appearance with an interracial group of football stars.

“I’m the one man who understands Southern politics,” Smitherman was soon telling the group. “As mayor, I ordered the arrest of Martin Luther King down here. I said, ‘Dr. King, don’t march.’ And he marched. So I had him arrested. And got 70 percent of the black vote in my next election. What you Yankees have to understand is that we’re not segregationists anymore. We’re populists.” A couple of the blacks fidgeted. Stabler rolled his eyes and muttered, “Henry’s done it again.”

The speeches were not an unqualified success. The audience cheered politely for the ballplayers, but fell ominously silent when Pitts tried an oratorical flourish of, “We in Selma have not merely overcome. We have conquered.” When Sistrunk followed at the mic, he was barely audible. “Speak up, we can’t year you,” somebody called. Sistrunk stared balefully across the room. “If you can’t hear me,” he said, “you can move in closer.” A chair squeaked and there were a few nervous giggles. Stabler said a few words himself but watched most of the proceedings from the bar. “A situation comedy,” he said.

That’s just great. I’m sure their presence and the ex-mayor gloating about not only overcoming but conquering was super welcome in a Selma black bar.

But that wasn’t the only connection to Selma in the news lately. Bonard Fowler, the cop who shot Jimmie Lee Jackson, leading to the famous Selma march, died. Other than killing Jackson, he was also notable for killing other black people as a cop. Then he joined the military, went to Bangkok, and while there got busted for heroin trafficking. That my friends, is a life poorly lived.

Jackson

[ 33 ] July 10, 2015 |

Imacon Color Scanner

It’s true enough as Adele Stan states that Andrew Jackson is actually the prototypical white American as opposed to some sort of freak from the past that not only we shouldn’t honor but is a complete foreigner to us today. In fact, his version of white supremacy still rides high in this country today.

So fine, we can’t shove Jackson onto modern conservatism entirely, especially with the Democrats continuing their awfully named Jefferson-Jackson dinner and your David Greenbergs of the world attacking anyone in the historical profession to the left of him, in this case those who say bad things about Old Hickory. But it’s still remarkable that Howard Phillips thought Jackson is the greatest president and Lincoln is the worst.

The Next Battle for the American Swastika

[ 173 ] July 10, 2015 |

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Travis Waldron notes that a next likely battle over the Confederate flag is at the high school level, with so many southern schools adopting it as their team mascot.

Since the Charleston massacre, the debates have resumed in several school districts. A school board committee in Arkansas voted last month to phase out Southside High’s Rebels nickname and immediately end its use of “Dixie,” the Confederate anthem, as its fight song. In Alabama, complaints from some residents prompted a community meeting about Vestavia Hills High School’s Rebels moniker. Local media have raised questions about symbols and mascots in Iowa and California, and the superintendent at Kentucky’s Allen Central High School, which also uses the Rebels name, last month removed old logos and photos that featured the Confederate flag from websites for the school and state athletic association.

But in other places, there has been no discussion of Confederate symbols since the Charleston shootings. And there are no plans for change.

In Hurley, Virginia, a small town tucked into the state’s southwestern corner, Hurley High School uses Confederate symbolism more directly than schools where debates are taking place. Hurley’s teams, known as the Rebels, don a logo that features the Confederate flag waving from a sword. The school’s Facebook page shows football players running onto the field beneath the Confederate flag after bursting through a homecoming banner on which a hand-drawn version of the battle flag is the most prominent feature.

“Since all of this has come about, our community has stood behind the logo and the flag,” Hurley High principal Pamela Dotson told The Huffington Post this week, echoing comments she made first to the Bristol Herald Courier.

This can get pretty nasty too. Unlike a state, which will have some level of racial and ideological diversity, on the school district level you may have very little racial or ideological diversity at all. This is going to be outsiders coming in and telling us in rural Kentucky or Alabama that we can’t have our flag–and our school symbol.

These are necessary fights–the American swastika must be driven from public life–but it’s going to as ugly as you can imagine.

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