High Unemployment Means Lower Wages for the Employed

The true nature of the great recession is beginning to show in ways that until very recently were pretty well hidden.

Probably the most obvious example so far of how the very rich are using this economic downturn to consolidate their power is the strike by 305 hourly workers at the Mott’s apple juice plant in upstate New York.

Those who are benefiting from the rotten economy are the wealthiest 20 percent of the American people, who hold upward of 85 percent of the country’s wealth.

For those who are manipulating the situation, you probably can look to the richest 1 percent of Americans, who, among their tiny number, hold more than one third of the private wealth in the United States. They’re the ones with the real power, the ones who hold the deeds to key politicians and mortgages on the Republican and Democratic parties.

The New York Times presented recently a clear picture of the Mott’s situation. (Also see The Nation’s recent story “Rotten Apples, Core Values“.)

In a nutshell: The workers went on strike more than three months ago when Mott’s parent company demanded they take pay cuts of $1.50 an hour, accept a freeze on pensions and give in to other reductions in benefits.

In insisting on the pay and benefits reductions, Mott’s, owned by Dr Pepper Snapple Group, a beverage conglomerate, makes no claim of hardship, economic or otherwise.

Quite the contrary: the company is bragging about record earnings. It proudly reported earnings of $555 million in 2009, a big upward swing from the $312 million loss of 2008. Results for the first half of this year showed further improvement, including from Mott’s, which also showed a substantial gain in its over-all share of the juice market.

The company is unusually forthright in its explanation of its demands. It is trying to push its employees to lower rungs on the economic ladder simply because it thinks it can get away with it. That’s it, pure and simple. Poorer employees mean richer shareholders and executives.

New York Times writer Steven Greenhouse quoted Mott’s spokesman Chris Barnes as saying the wage cuts and benefit reductions can be done because they will bring the Mott’s plant in upstate New York in line with “local industry standards.”

In plain English: Unemployment is high because of the recession, and desperate people are taking whatever jobs they can get, even if the pay is low. So Mott’s figures it can force its employees to work for less and thus enhance its already soaring profits.

Left unsaid, but clearly in a big cartoon bubble over the company management’s head is this: “If you don’t want to work for less, we’ll find a way to get rid of you and hire others who will take much less.”

A number of people on Wall Street have defended the drink producer’s position on the grounds of “fiduciary responsibility” — the claim that a corporation’s responsibilities are solely to produce the greatest possible profit for its shareholders (and executives, though they don’t say that).

Fiduciary responsibility, in case you were wondering, does not extend to such things as worker safety or concern for the environment.

We’re going to see more of this very soon from corporations that are doing very nicely in this recession-cum-depression.

American corporations continue to feed their captive media the false story about wanting nothing more than to “create jobs” while, in fact, they do everything they can come up with to reduce employment in this country. Now that there is a very big, long-term, if not permanent, unemployed population in the United States, it is inevitable that the next move is to force those who have jobs to accept less and less for their labor.

Jim Fuller



