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March 28, 2016

Norma Rae Is Spinning in Her Grave

Why Union organizing has become an uphill battle in the US

A screen shot from the movie Norma Rae. 

In 1973, Crystal Lee Sutton, a single mom working in a textile mill in Roanoke Rapids, North Carolina, was struggling to get by.  The working conditions at the J.P. Stevens & Company textile factory in which she worked were horrendous.  Crystal Lee and most of her co-workers spent their work day on their feet, toiling around noisy machinery, with dust and cotton lint filling the air.  In the summer the heat and humidity were stifling; sweat dripped off the workers’ faces and saturated their clothes.  After a long, hard shift at the mill Crystal Lee had to go home to care for her three young children.

In a small town in rural North Carolina in those days a mill job was about the best a blue collar worker could do.  Crystal Lee’s grandfather had worked in the mill, as had both of her parents.  It seemed to be the natural order of things that she would follow her parents and grandparents into the mill.

Crystal Lee started at the J.P. Stevens mill on the night shift when she was in the eleventh grade.  More than 10 years later she was earning $2.65 per hour — $12.57 in 2014 dollars.  According to the Census Bureau, the median household income in the United States in 1973, adjusted for inflation and household size into today’s dollars, was $39,875.  Crystal Lee’s annual income at $2.65 per hour came to $5,512 — just $26,145 in 2014 dollars and only a couple of thousand dollars above the federal poverty level for a family of four.  However, Crystal Lee had resigned herself to the fact that this was as good as it could get for her, working long hours for low wages and no benefits in sweatshop conditions to put food on the table for her and her kids.

She was resigned to this economic station and work life, that is, until the Textile Workers Union of America came around the J.P. Stevens mill in 1973.  Crystal Lee wanted something better for herself, and especially for her children.  She became a staunch advocate for the union and one of its key supporters among the employees of J.P. Stevens.  Crystal Lee Sutton later became famous under the pseudonym Norma Rae Webster, the name given to the character portrayed by Sally Field in the film “Norma Rae”, based on Crystal Lee’s efforts to bring the Textile Workers into the workplace and get a modicum of equity and decency from her employer.

In the most dramatic scene in the film, company managers are trying to stop Norma Rae from writing down racially incendiary information that they allowed to be posted on a workplace bulletin board.  They try to escort Norma Rae off the premises but she flees into the main production area where the din of the looms makes it almost impossible to hear anyone.  So the Sally Field character — as Crystal Lee did in real life — hand-writes a cardboard sign that says simply, “Union”, climbs onto a table and slowly displays the sign to the four corners of the room.  One by one, the workers switch off their machines, until the last one is turned off and the room falls silent.

Sally Field won an Academy Award for Best Actress for her portrayal of Normal Rae Webster.  In the film — also as in real life — the employees at the Roanoke Rapids textile mill voted in favor of union representation in August, 1974.   Winning the election was the triumphant conclusion to the movie.  However, there was much more to the true story.  The reality was that after the Textile Workers won the election conducted by the National Labor Relations Board (NLRB) it took them six more years to get a labor agreement with J.P. Stevens.  Even after its employees voted for unionization, the company continued to resist the union’s efforts to obtain a fair contract.  They dragged out the negotiations and refused to agree to anything reasonable.

Although a strike was theoretically an option, a strike is often a fool’s errand.  The law prohibits employers from firing workers for going out on strike, but it allows them to “permanently replace” striking employees in order to keep the business running.  Unless striking employees are so highly skilled or in such great demand that they cannot be effectivelyreplaced, the distinction between being “fired” or “permanently replaced” is one without much of a true difference.  Accordingly, the Textile Workers resorted to a publicity campaign asking consumers not to purchase products made with J.P. Stevens’ textiles.  Finally, after six years of pressure from the union, and after new leadership took over at J.P. Stevens, the Textile Workers obtained a fair contract.  Although Crystal Lee Sutton had moved on at that point to become a full time union organizer, her co-workers at J.P. Stevens finally achieved a degree of equity in the workplace.

Union organizing was — and remains — an extremely difficult proposition.  In the private sector this is largely the result of the Taft-Hartley Act, which in 1947 amended the National Labor Relations Act to make it much more difficult for unions to obtain representational status.  Before 1947, the original National Labor Relations Act of 1935 required employers to negotiate with unions that presented proof that a majority of their employees wanted to be represented by a union.  This proof of support would consist of individually signed authorization cards signifying a desire for representation, or signed petitions to that effect.

However, in 1947 Congress passed the Taft-Hartley amendments to address what some believed to be pressure tactics or outright coercion by union supporters to get employees to sign authorization cards.  The new law no longer required employers to bargain with unions based simply on proof of majority support.  Although an employer could voluntarily recognize a union as a collective bargaining representative based on majority support, the employer could now demand an election instead, ostensibly allowing the employees to more freely exercise their statutory right to choose or reject union representation or not.

The reality of what the Taft-Hartley Act truly wrought, and what it means and continues to mean to employees attempting to gain union representation, is illustrated at length in subsequent chapters of this book.  Suffice to say for now, however, that from the 1950s to the present there has been a steady decline in union membership in America as a percentage of the total workforce, mostly in the private sector.

In the public sector, which the National Labor Relations Act (NLRA) does not regulate, unions have actually made gains since the 1950s.  Overall, however, according to the Congressional Research Service, union membership in the United States peaked in 1954, when 34.8% of all U.S. workers belonged to a union.  It has been downhill ever since then.  By 1983, accordingly to the Bureau of Labor Statistics of the U.S. Department of Labor, that percentage had fallen to 20.1%.  By 2013, only 11.3% of workers belonged to a union, and of that 11.3% almost half were in the public sector; only 6.7% of private sector employees were union members as of 2013.

At the same time that union membership has drastically declined, wealth and income disparity, as has been well-chronicled in recent years, has been greatly increasing.  A study by University of California, Berkeley Professor of Economics Emmanuel Saez found that in 1929approximately 25% of the country’s wealth belonged to the wealthiest 1% of households in the U.S. — the highest concentration of wealth in the top 1% in the last one hundred years.  That percentage declined significantly through the 1920s and ‘30s, and from 1940 until 1998, the wealthiest 1% of U.S. households never controlled more than 15% of the nation’s wealth.

However, the amount of wealth controlled by the top 1% has steadily grown throughout the 1990s and 2000s, reaching a peak of 22% of wealth controlled by the top 1% as of 2013, the highest percentage of wealth controlled by that elite since the Great Depression.  While more and more wealth has become concentrated in the 1% wealthiest households, wages and income for the rest of us have stagnated.  Federal Reserve Economic Data shows that the median income for U.S. households in 1984, adjusted for inflation, was $47,866.  It reached a peak in 1999 of $56,900.  However, by 2013 the median household income had fallen to $51,939.  From the start of the George W. Bush presidency to present, median household income has actually fallen by 6.5%.

A November, 2014 article by David Leonhart in the New York Times referred to this trend as “The Great Wage Slowdown”.  It has become a big concern not just for economists and academics but also for business leaders.  The December, 2013 edition of The Atlantic magazine discussed an organization of for-profit companies called “B Lab”, the goals of which are to improve social and economic conditions in society as a whole.  The article quotes several CEOs expressing their concern that capitalism and capitalists have largely lost the sense that they are part of a larger society and that they have an obligation to do things that benefit the country as a whole and not just their own companies.  David Blood, former head of Goldman Sachs Asset Management, is quoted as saying, “Some people say income inequality doesn’t matter.  I disagree.  We are creating a situation in which only the elite of the elite can be successful — and that is not sustainable.”

Unfortunately, much of the corporate world does not appear to be so enlightened.  An event that occurred at a Walmart store in Canton, Ohio in November, 2014 illustrates the more prevailing corporate ethos.  The store manager organized a Thanksgiving canned food drive to collect food for needy individuals who worked at that Walmart store.  Walmart pays such paltry wages to its employees that the store manager himself recognized that some of his employees were not making enough money to provide a Thanksgiving dinner for their families.  Some of the employees at the store found this to be so disgusting and depressing that they took pictures of the bins placed in the store for the food drive and posted the photographs on the internet.

This is what conditions in America have come to today.  Anyone who lives on wages or a salary and who grew up before the 1990s knows that they get less in wages and benefits, adjusted for inflation, than their parents received for doing the same work.  They have to work harder to make comparatively less.  Those of us who grew up in the post-World War II baby boom have a very disquieting feeling that our children may be the first in many generations who do not enjoy a better standard of living than their parents.  Certainly, we are the first generation to see our optimism fade as we enter our sixth and seventh decades of life that our kids will do as well as or better than we have done.

This is the economic and societal background in which Rosaura Mendoza, a single mother like Crystal Lee Sutton, working for a large company and struggling to make ends meet, approached the Teamsters union in 2012 about representing her and her co-workers at Marquez Brothers International, Inc.  Rosaura — known as Rosie to most of her friends — was born and raised in Hanford, California.  Her parents both came to the U.S. from Mexico and they worked in seasonal jobs in California’s agricultural industry.

Rosie started working at Marquez Brothers in 2000, two years out of Hanford High School.  Hanford is a small, hard-scrabble town with high unemployment and few decent paying jobs.  The Marquez Brothers International, Inc. facility in Hanford processes and manufactures cheese, sour cream, and yogurt products.  It operates under the rubric of “Marquez Brothers”, which consists of 16 affiliated companies that manufacture, market and sell food products under the El Mexicano label.  Collectively, Marquez Brothers is the largest distributer of Mexican food products in the United States.  Their products are ubiquitous in the western states.

More than half the employees at the non-union Hanford facility were paid an average hourly wage rate in 2012 of $9.47 — not much more than the California minimum wage.  The normal work schedules for the Hanford employees were between 50 and 72 hours per week.  Marquez paid little for the medical benefits it offered its workers.  As a result, less than 10% of the employees could afford to take medical benefits.  Similarly, the company 401(k) plan did not require any mandatory employer contribution.  Employees could contribute from their own pockets if they wanted to, but again, because the employees were paid so little almost none of them contributed to the 401(k) plan.  Realistically, they had no retirement benefit at all.

Paradoxically, the Marquez facility in Hanford is in the middle of a highly unionized cluster of dairy manufacturing companies within a 40 mile radius.  The country’s biggest producers of processed dairy products all have big manufacturing plants in the area around Hanford.

Many of these dairy manufacturing operations in and around Tulare County were organized by the Teamsters in the 1940s and ‘50s.  They remain Teamsters-represented to this day.  After a short time period with a break-in wage rate, the hourly wages at these facilities start at about $20 per hour and move up quickly from there, with highly skilled mechanics and machine operators making $25 per hour and more.  These employees receive generous benefit packages, with excellent medical benefits (mostly at low cost to the employee), an outstanding company-paid pension plan, 10-11 paid holidays a year, and up to five weeks of vacation for more senior employees.

Leprino Foods, the biggest manufacturer of mozzarella cheese in the United States, which sells its cheese to large pizza chains like Papa John’s, has two plants in Lemoore, California about eight miles from Hanford, and one of those plants has had Teamsters representation for many years.  Although the relationship between Leprino and the Teamsters largely has been amicable over the years — both the employees and the company prospering — the company opened its other Lemoore facility as a non-union operation in the early 1980s.  In order to keep the newer plant non-union the company gives the employees at that facility a comparable wage and benefit package to what it provides to its unionized workers.  The non-union employees thus have little incentive to seek union representation, and although the Teamsters that represent the employees at many of the other plants in the area would prefer Leprino to be 100% union, they recognize that by paying similar wages and benefits to the non-union workers the company is at least helping to maintain area standards.

Those area standards, however, were not being met by Marquez Brothers in 2012.  Not even close.  Although they made and sold the same types of dairy products that the unionized dairy companies made, and the prices of Marquez Brothers products on the supermarket shelves were comparable to the prices charged for products made by union companies, they paid less than half in most cases of what their counterparts paid to their employees.  By putting most or all of the cost of medical and retirement benefits on their employees they kept their expenses for employee benefits to a bare minimum.

Rosie Mendoza had worked for Marquez Brothers for 12 years as of May, 2012.  She and her co-workers knew what the employees just down the road at Leprino Foods were getting.  They had a good idea of what employees at other dairy manufacturing facilities in the area — both union and non-union — were getting, and it was far more than what Marquez Brothers was providing to its employees.  They resented the fact that this extremely successful company was sharing so little of its earnings with its employees.  They resented that they had to work many more hours than a standard 40 hour work week in order to get enough money to scrape by.  And they resented the fact that the founder of the company was of Mexican heritage — as they were — but he did not seem to care about them.

The 200 or so employees at Marquez Brothers in Hanford were 98% of Mexican heritage.  Ironically, one of the founders of Marquez Brothers, Gustavo Marquez, was a Mexican immigrant who became the proverbial self-made American man.  He started out selling tacos from a street stand in Jose, California.  From there, he rose to prominence as the head of an empire, making, distributing and selling Mexican-style food products.

All that Rosie and her co-workers wanted was a fair wage, decent benefits, and a reasonable work week and working conditions.   Rosie had reached the conclusion after 10 years with Marquez Brothers that the employees would not get these things on their own.  They needed help.  Like Crystal Lee Sutton almost 40 years earlier, she reached out to a union to represent her and her co-workers and negotiate a fair labor agreement with their employer.  What follows is the story of Rosie, her fellow employees, and representatives of the Teamsters to get that agreement with Marquez Brothers.  By telling their story this book also attempts to raise consciousness of the positive role that unions have played and can continue to play in our society, although without legal reforms their role will continue to diminish, to the detriment of the middle class and working poor of the United States.

A majority of Americans appear to have a negative view of unions.  Many express unequivocal disdain of unions.  Critical news reports in recent years concerning the pensions and medical benefits received by public sector union employees and the involvement of their unions in the political arena have fed a perception that employees in the public sector sometimes receive sweetheart deals at taxpayer expense.

Of course, this ignores the fact these benefits were often negotiated as a trade-off for higher wages than those that private sector counterparts make, and it ignores that public officials have sometimes been negligent in not setting aside money to fund these benefits into the future.  It is even more bothersome that although conservatives greatly criticize unions in this regard, the fact that corporations use lobbyists and campaign contributions to achieve legislation and government contracts that benefit them goes unmentioned.

In the private sector, although strikes are a rare occurrence, union officials are often perceived as being heavy-handed or even thuggish in their dealings with employers.  However, in the vast majority of cases if an employer is fair and tries to work with its union representatives to achieve a degree of economic balance there is no need for union officials to become strident.  But when an employer is greedy and refuses to be fair, union officials have little recourse but to engage in tactics that will try to force the employer to be reasonable.

If we had laws mandating arbitration of disputes over wages and benefits — as some states have for their public employees — such matters could be resolved without the need for heavy-handed tactics.  However, our current system does not require such measures, and income disparity and wage stagnation continue to be growing problems, although they likely would be greatly diminished by increasing the number of people with union representation.  Whenever a large company is involved, there is always going to be pressure from shareholders and corporate directors to keep wage and benefit expenses as low as possible.  At the top level of corporations with many hundreds or thousands of employees, employees are a faceless and nameless commodity, needed for production like the electricity that powers machines and the raw products that are transformed into finished goods.  Some counter-balance is needed to push back against the relentless pressure to keep costs as low as possible.

But with all of the publicity, public policy discussion, and academic hand-wringing over the problems of income disparity and wage stagnation it is puzzling that there is not more acknowledgment that unions could play a very positive role in addressing them.  Other than raising the minimum wage federally and at local levels little else is being discussed to help solve these problems.

The preamble of the National Labor Relations Act states that it is the policy of the United States to eliminate obstructions to commerce caused by labor strife by “encouraging the practice and procedure of collective bargaining” and by “protecting the exercise of workers” of their freedom of association, including the right to organize and designate representatives for the purpose of negotiating with their employers.  Rosaura Mendoza and her co-workers at Marquez Brothers overwhelmingly embraced their right to choose union representation to improve the conditions with their employer.  Their story, and the impact of the Taft-Hartley Act on their ability to pursue their goal and improve their economic standing, follows.