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Daily Video

September 7, 2010

Recession Weakening Labor Unions

The current recession has severely undercut the bargaining power of labor unions and workers’ abilities to strike and gain concessions from company leadership.

In this video, Economics Correspondent Paul Solman visits Rochester, New York, where 300 workers at the Mott’s juice and apple sauce factory called a strike on May 23. The workers are protesting against the parent company, Dr. Pepper – Snapple, which cut wages earlier in the year.

However, the company was able to hire non-unionized temporary workers – so called “scabs” to work the machinery at half the cost of the striking workers. Both sides recognize that the environment is not good for labor negotiations, as the millions of Americans who lost their jobs during the recession are anxious for any kind of work.

However, at the top of the corporate ladder, CEOs are making more than ever. A recent study by the pro-labor Institute for Policy Studies shows CEOs of the 50 firms that have laid off the most workers since the onset of the economic crisis took home 42 percent more than the CEO pay average at S&P 500 firms as a whole.

Quotes

“You have to have people to make the product, just as much as you have to have people to sell the product. So, our earnings should be based on their earnings.” – Shelly Snyder, Mott’s worker

“The Williamson employees have enjoyed wages that exceed 50 percent of the market for a very long time. The best example I can give you is, one of our forklift drivers at the Williamson facility makes $20 an hour. Local market in the Williamson area, a forklift driver will make $9.90 an hour.” – Robert Callan, Senior Vice President, Dr. Pepper Snapple

“I don’t think that’s fair, that a multibillion dollar company can tell us, well, you know what, the economy is tough, you guys have to accept all these cuts, when they were making money hand over fist.” – Thomas Culhane, forklift operator

“There’s no need to — to pay workers more. Workers do not have the collective bargaining power to demand that they get paid more. And, so, as a result, the upper hand at the current time is held by corporations.” – Andrew Sum, economist, Northeastern University

Warm Up Questions

1. What is a labor union?2. How do you think labor unions have been affected by the recession?3. How might the recession affect a union’s ability to strike and win concessions from corporate management?

Discussion Questions

1. What was interesting about this report?2. Do you think labor unions are permanently weakened? Why or why not?3. How important are labor unions? What are the pros and cons of labor unions?4. Research labor union actions of the past (Great Railroad Strike of 1877, American Federation of Labor and Samuel Gompers, The Haymarket Riot, the Pullman Strike) What is the future of labor unions?

Additional Resources

Transcript of this report

Teachers Unions Square Off Over Contract

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