Wednesday, June 5, 2013

Moral capitalism

During my career I worked in union plants and non-union plants. At one point I was transferred to manage a plant in Alabama as the previous manager was fired for poor performance. When I arrived the morale was low and both employees and supervisors felt they had been mistreated. I instigated a number of changes based on the premise that if people are treated with dignity and respect they will not want a union and if they are not treated that way they deserve a union. During this time and the months before I arrived union organizers were at the plant gates on a regular basis getting signatures and six months after I arrived we had an election. The union lost by a vote of 132 to 92. They lost mostly because it is difficult to unionize in the south because of cultural mores but also because I was able to show some concern for the employees. I was allowed by the National Labor Relations Board to speak to the employees with the caveat that I not threaten or promise. I told them it was their job to run the plant and my job to get as many benefits as I could. I told them that there were no guarantees but every time I went to the home office I went with request to make their work place a better place. I bring this up at this time because there is a push to unionize some restaurant chains, in particular, Panera Bread. The owners say they cannot compete if they are unionized, not just because of higher wages and benefits but because of union work rules. I know that the fast food business is competitive as there are many chains slowly going out of business at this time. Names like Benningtons, Big Boy and Ponderosa are fast disappearing. The books on a chain like McDonalds show one-third for materials, one-third for labor and one-third for expenses. If a Big Mac cost $3 then $1 is for labor. If the company wanted to increase the pay of employees from $8 per hour to $16 per hour they would double the labor cost and the cost of a Big Mac would rise to $4. Now if you add in the cost of benefits that would increase the cost of a Big Mac to $4.60. Now I rarely eat out but my guess is that people who eat at McDonalds would notice if the price went from $3 to $4.60. Many of McDonalds customers are blue collar workers but would they pay the extra to help out these employees. I see the same dilemma at places like Wal-Mart where blue collar people do most of their shopping. If consumers feel that people should be paid a living wage and received benefits like healthcare and pensions then they should be willing to pay more for those products. The questions is , will they?

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