Labor Union Keeps Cleveland Plant Open

As of December 2009, German suit manufacturer Hugo Boss announced its intention to close its Cleveland-based plant. While the company is famous for high-fashion men’s garments, the Brooklyn factory in particular only produces two lines of suits. This was one of the reasons cited by Hugo Boss for publicizing the plant’s imminent closure, set to take place in late April 2010. According to the company’s official statement, the Ohio location “is not globally competitive” enough (abc NEWS). Shutting down the factory would cost upwards of 300 jobs.

Following the statement by Hugo Boss, the company entered into negotiations with Workers United, a labor union representing the 300 plus employees of the Cleveland location. But what exactly are labor unions, and what do they do for the workers they represent?

Labor unions began making themselves known during the time of the American Industrial Revolution and are divided into two different types. Those classified as trade unions appropriately represent employees in a certain trade, while industrial unions support groups in certain industries. In either case, labor unions offer mediation between the large corporations and the little guys – the workers (UnionSmart.org).

Trade and industrial unions often use collective bargaining, in which workers will group together in order to negotiate with their employer for higher wages, better working conditions, or other benefits in the work environment. The union’s role is to better the work experience for the employees, yet keep the corporation in business. Oftentimes if the workers’ demands are not met, the union will organize a labor strike in the hopes that it will drive the company to concede, although the threat of a strike can be just as beneficial (UnionSmart.org).

In the case of Hugo Boss, a strike would not have been favorable, seeing as the manufacturer intended to close the Cleveland plant anyway. However, Workers United and Hugo Boss were able to come to an agreement in the days immediately preceding the scheduled closing of the factory to keep it up and running, saving the hundreds of jobs that would have been lost. Additionally, wages will not be cut, and the Ohio-based Hugo Boss will be able to become more globally competitive by reducing other costs and increasing flexibility of manufacturing. The deal was also driven by actor Danny Glover, who urged others in Hollywood not to wear the company’s suits to this year’s Oscars. His support of the workers helped to draw attention to the situation taking place (Manufacturing.net).

While labor unions help to obtain better working conditions and higher wages for the workers they represent, they may also be viewed in a negative light. Some corporations like Wal-Mart have been known to actively oppose unionized labor, and it has become harder for them to operate since the time of the Industrial Revolution.

By Alyssa Parnaby

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Always Low Prices…But What About Cost?

We’ve all seen those commercials – the ones where a tantalizing burger is topped perfectly with crisp lettuce, the bun looks like it just was just baked, and everything is stacked up perfectly. Those are the commercials that make you crave that Big Mac. Yet when you finally pull away from the drive-thru window, the lettuce on your sandwich is wilted, the bun is squished into a pancake, and you have to restack everything before you dare to bite into it.

So what about those other commercials that we’ve all seen? A Wal-Mart associate smiles back at you from your television, beckoning you with the ultimate family image and low prices. Just like that Big Mac, you assume that what you see is what you’ll get at the supercenter, but when you wander through the doors past the Wal-Mart greeter, you wonder how all their employees seem to be in a perpetual bad mood.

The answer is simple, and it lies in the Wal-Mart 2010 Financial Report.

As of the 2010 fiscal year ending on January 31, the 8,416 Wal-Mart stores spread worldwide had racked up net sales just over $405 billion dollars – more than any other corporation. The company’s gross profit margin has been on the rise for at least the last five years, coming in at 24.8%, and net sales also continue to increase.

With astronomical numbers like these, you’d think Wal-Mart’s employees would be thrilled to come to work every day. But instead of enjoying the success of their employer, the majority of Wal-Mart’s associates face wages falling below the poverty line and less-than-adequate healthcare.

The average, full-time Wal-Mart employee, as of 2008, made only $20,774 per year, translating into almost $1,500 under the poverty level. At the opposite end of the scales, CEO Mike Duke pulled in over $12.2. $12.2 million dollars, that is. With increasing profits and record sales, the company could certainly afford to be paying their sales associates adequate wages (Wake Up Wal-Mart).

As if these wages aren’t bad enough, Wal-Mart mentions nothing of its overseas suppliers, which sometimes pay their sweatshop workers mere pennies a day to work in monotonous, unsafe conditions. Does the phrase “Made in China” sound all too familiar? The biggest supplier, not surprisingly, is China, which exported $18 billion in goods to Wal-Mart alone in 2004 (Wal-Mart’s China Inventory). Additionally, the Wal-Mart corporation is “legendary for quite straightforwardly telling [suppliers] what it will pay for their goods (The Wal-Mart You Don’t Know). But with the power it wields, the only thing worse than meeting the company’s demands might be not doing business with it in the first place.

Wal-Mart clearly stands at the top in ruthlessly dictating every aspect of business, right down to the rights of the corporation’s own workers. Countless allegations have been made by Wal-Mart’s employees that they were never compensated for work done on their breaks or other off-the-clock intervals (Wake Up Wal-Mart).

And it doesn’t stop there. On the Health and Wellness Fact Sheet, Wal-Mart’s Website boasts that their healthcare plan has some of the lowest premiums, ranging from $9 to $27 dollars per pay period. However, what they don’t tell you is that the annual out-of-pocket sum is over $5,000 before Wal-Mart begins to pay anything, and for families whose income is generated from the corporation alone, it comes close to one quarter of the earned income. Instead, Wal-Mart employees are turning, or even encouraged, to take advantage of government-funded programs like Medicaid. In 2009 alone, this cost taxpayers slightly less than $45 million dollars (Wake Up Wal-Mart). Should we be spending our hard-earned dollars just so that CEO Mike Duke can enjoy his profits? I think not.

So what does this all amount to? Unfriendly Wal-Mart greeters, cashiers, and sales associates. And who can blame them?

Wal-Mart’s empire revolves around low wages, worker exploitation, outsourcing, and inadequate healthcare so that they can bring you the lowest prices. Always. Ultimately, the decision is yours, but I, for one, refuse to be another enabler.

By Alyssa Parnaby