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The Kellogg's strike, tiered agreements and union goals

2021-12-15 | USA

The Kellogg's strike in the US continues after two months despite union attempts to end the strike as soon as possible and threats by the company to fire the strikers. While Biden takes the opportunity to advertise himself once again as the most pro-union president since Roosevelt, the company tries to take the "tiered" agreements signed by the unions to their ultimate consequences and the unions tell workers not to complain about the 12-hour workdays and instead leave things as they were prior to 2015.

The background to the Kellogg's strike

The two-tiered wage system

Gary Jones, UAW leader, automotive union who signed tiered agreements at General Motors.

Gary Jones, UAW leader, automotive union who signed tiered agreements at General Motors.

The Kellogg's workers on strike are those who work in unionized Kellogg's cereal plants. The union "representing" them is the Tobacco Workers and Grain Millers' International Union (BCTGM), which is affiliated with the AFL-CIO.

Kellogg's workers, like many other workers in unionized workplaces, are subject to a two-tier wage system, in which a group of workers hired after a certain date have lower benefits and wages than workers hired before that date. Workers in _the lower category_remain in that category indefinitely, even if they perform the same work as those in the higher category. It is the product of a type of agreement accepted by many unions.

Although the first two-tier wage systems in unionized companies can be traced back to airline negotiations in the 1970s when companies explored new ways to cut labor costs, they were most prominent during concessionary bargaining during the following decade.

In the 1980s, two-tier wage plans covered from representing 2 percent (1981) to 33 percent (1985) of employees under new collective agreements. Plans were often found in industries facing significant global competition or deregulation (e.g., manufacturing and transportation) or in industries such as retailing where turnover was high and the lower tier could quickly expand.

Two decades after the first wave of concession bargaining came a second wave of major concessions. Two-tier wage systems were agreed to in some high-level negotiations- for example, the California grocery workers at Vons, Ralphs and Albertsons in 2004; the major auto parts makers in 2004-2008 (Delphi, Dana, Visteon and American Axle); Caterpillar in 2005; and the Detroit Three (General Motors, Ford and Chrysler) in 2007.

Under the 2007 collective agreements of the Detroit Three, non-core new hires receive second-tier wages equal to 50-60 percent of the current first-tier wage. They also receive a different benefits package which does not have a defined-benefit pension and company liability for health care benefits for retirees.

Two-Tier Wage Settlements and the Legitimacy of American Unions, Gary Chaison

At Kellogg's, workers hired after 2015 are called _transitional workers,_while those hired before 2015 are _legacy workers._Transient workers receive lower wages, have a lower health plan and lack a pension plan.

The union relates that prior to 2015, workers from the very first day they were hired were equally provided with the same benefits and a pension plan although not the same salary. Workers could only receive full salary after four years.

Now, in theory and in a worst-case scenario, once a "legacy" worker retires, the most senior "transitional" worker could move up. However not even this happens anymore.

The work of the unions: dividing the workforce in order to "save the company."

In the 1990s Kellogg's and the union agreed to implement a casual worker program that, in theory, was only intended to serve as a backup for then-current workers. In 2013, however, Kellogg's attempted to reduce labor costs by having the union redefine the concept of a casual worker as:

Any employee hired by Kellogg to perform production or any other bargaining unit work

It sought to ensure that there would be no limit on their right to hire and use casual workers. The proposal also stated that casuals would have to serve a probationary period and would be granted seniority and the same claim rights as permanent employees. However, casuals would continue to be paid lower wages than regular employees and would be excluded from major benefits, including health and other insurance.

The plan was to ensure that the majority of the workforce was made up of these workers who would do the same work as permanent workers but would be cheaper. It was a way of also justifying a generalized worsening of working conditions.

A year after Kellogg's went into lockout in the face of workers' refusal to accept these conditions, the union decided to agree with management on a two-tier wage and benefit system. Yesterday's casual worker became today's transitional worker. As the president of one of the union's sections recounts:

We have backtrack to 2015, is where we took concessions with the company to implement a two-tier wage system. In 2015, cereal sales were declining, so we took concessions in that contract where we implemented the two-tier wage system.

At maximum, we agreed to 30% of our union body on that lower tier... In 2015, when this was implemented, they threatened to close a plant on us if we did not ratify the contract. Which was, they were going to close our Memphis Tennessee plant. So, we took the concessions because we didn't want that to happen and that got voted in.

In 2016, this was all negotiated, 10% of our membership was on the lower tier as transitionals. In 2017, 20%, and in 2018 we reached the 30% cap.... Since then, we had a 40% turnover rate in that lower tier... Prior to 2015, nobody ever left Kellogg's... so times are way different. We are having labor shortage in the country....

Fast forward to 2020 when that the 2015-2020 contract expired. The union and the company could not come to terms on a contract.

Kellogg's Workers Are Striking Against a "Two-Tiered" System of Workplace Inequality - In These Times

He then proceeds to say that the union is fighting for the company to give transitional workers a path to the legacy level, but that the company wants to remove any barriers that would prevent it from hiring an increasing number of workers destined to be transitional.

That is, Kellogg's no longer wants to settle for 30% transitional workers in the workforce. It says the company also intends to get rid of the cost-of-living adjustment, which is already barely keeping pace with inflation, retire the more expensive workers and replace them with the cheaper transitional workers.

According to the unions, who openly admit that they made these conditions possible, their own actions were justified because they had no better alternative left ... to save the company they needed to help it lower labor costs. The union's official website explains it this way:

An all-too-common feature of recent labor relations: the two-tier contract.... ‎is‎...a major issue at Kaiser Permanente, which is proposing substantially lower pay for the nurses it will hire in the future; at John Deere, which has proposed to end pensions for its new hires; and across the baked-goods industry.

Such contracts became widespread during the Great Recession, when the decline in company fortunes and the threat or reality of layoffs compelled many unions to accept such two-tier provisions. As the economy eventually came roaring back, the elimination of such two-tier provisions has been one of the unions' primary demands.

Why the Strikes, and What Might They Lead To?

That is, if we heed the unions, we can only fight to eliminate those conditions when companies or the economyrecover. And vice versa, during an economic crisis we must sacrifice our needs to solve the crisis.

The Kellogg's strike

BCTGM rally during the Kellogg's strike

BCTGM rally during the Kellogg's strike

When the last agreement expired, workers went on strike. While Kellogg's intends to remove all barriers that prevent it from hiring more and more transitional workers, that is, to make the workforce as precarious as possible, the workers express the need to eliminate the tier system altogether so that everyone can have pension and health insurance that doesn't eat into their income and savings.

Throughout the months of the Kellogg's strike, the union made no attempt to expand the strike beyond the scope it had envisioned for it. It would only stay within the country's unionized grain plants. Throughout the Kellogg's strike, the union also did nothing to stop the scabs from working.

The unions' proposed new agreement

When the union tried to get workers to settle for a contract it had worked out with Kellogg's by putting it to a union vote, the majority of workers voted against it.

The contract proposed by Kellogg's and the union would not have done away with the two-tier wage and benefit system, in fact, it would have done away with Kellogg's existing limits on hiring precarious workers. Workers at both levels would have received wage increases (including cost-of-living adjustments) that would have been eaten up by inflation because of how low they are. Plus those who would have remained in the lower tier would be left without a pension and would still be paying a bundle for health care.

The big solution proposed by the contract to solve the tier system problem was to make it so that lower-tier workers with at least four years of seniority could move up to the higher tier.

The plan appears to be to reduce labor costs by having the majority of the workforce receive lower wages and benefits and to maintain a high turnover rate. It also involves controlling costs for the _most expensive_workers. Costs that are controlled not only through below-inflation wage increases, but through tops in retirement health benefits.__

The union also decided not to tackle the problem of the very long shifts and forced overtime to which Kellogg's workers are routinely subjected. Throughout the Kellogg's strike we saw workers talk about standard 80-hour work weeks, never having weekends off, having to use their vacation days if they are sick or have to grieve the loss of a loved one, and being forced to work 16 hours of overtime 10 minutes before the end of the shift.

But the union unabashedly stated that they're not complaining about this...the only reason it mentions the above in interviews is to point out thesacrifices the workers make for the company and the country and declare that they deserve the American dream.

How could it be otherwise, the BCTGM was the same union that ended both the Nabisco strike and the Frito-Lays strike earlier this year, without resolving either the issue of forced overtime or the tiered wage system. In other words, not only did it ensure that the conditions of the workers it represented at both Kellogg's and Nabisco would continue to deteriorate, but that the workers would remain divided and therefore unable to fight back against those attacks that unite them.

The effect is demoralizing and will surely lead to the signing of another union agreement as hostile to workers' most basic needs as the latest proposal. But why is the union allowing all this to happen -- aren't they supposed to be standing up for workers and their needs?

The unions and their goals

Workers at Kellogg's strike denouncing 12-hour workdays during the pandemic.

Workers at Kellogg's strike denouncing 12-hour workdays during the pandemic.

When the union makes concessions to bring back company profitability, when it strikes agreements with companies on how best to lower labor costs, when it tells us not to bother fighting when the company is losing profitability, it reveals in many different ways what its real purpose is.

When it tells us not to complain about brutal hours and yet talks in another context about the need for us to work fewer hours and have a four-day workweek, it shows that union talk about the need for fewer hours is not really about defending our need to be healthy and to spend time with our loved ones.

In reality, all union talk about working hours is misleading. The union subordinates working time, like wages, to their profitability for capital. That's why it is perfectly consistent when it proposes to cut working hours and when it endorses companies' attempts to force us to work overtime so that they don't have to hire anyone else.

This is not a matter of any particular union or country. We see it all over the world, in all sectors and for a very long time.

On the one hand, unions are organizations that sell labor power. Their "business" consists of discussing the price and duration of our working time, company by company and sector by sector. The assumption is that if they get better conditions and prices they will unionize more workers and get closer to the goal of representing the workers as a whole in negotiations. Their goal is to be a monopoly equivalent to the steel or energy monopoly which sits down to negotiate prices and quantities with a series of customers... to whose good performance, like any industrial supplier, they are committed.

Thus, by their own admission, unions and business are indistinguishable in their primary goals: to maintain the profitability of the capital invested in the company and, more generally, in the country. Even during the period when unions promoted pensions and social benefits, it was with the intention of [pacifying workers they considered essential to winning World War II and the Cold War](https://www.google.com/books/edition/The_Monthly_Review_Railroad_Retirement_B/Gc9IAQAAIAAJ? hl=en&gbpv=1&dq=pensions+workers+essential+war+effort&pg=RA1-PA197&printsec=frontcover), such as railroad workers or auto workers.

The point is that capitalism in general has long since been unable to maintain an adequate level of capital accumulation, which is the basis of the system, without eroding workers' conditions ever more furiously. So the unions become managers of cuts and casualization. How could Biden, who is ultimately politically responsible for national capital's "good business as usual," not support them now more than ever?

The problem is that, as we see at Kellogg's strike and in all companies and countries, "good business" is increasingly antagonistic to the satisfaction of workers' needs, which are otherwise universal needs: to work shorter hours, at more humane rates, and to be able to pay for the basic necessities needed for a physically and mentally healthy life.

But trade unions cannot give up on safeguarding the profitability of a business which in the end is their customer. To channel the struggle in order to impose our most basic needs through the unions is to try to save oneself from a shipwreck by clinging to the anchor of the sinking ship. Neither the unions nor their methods will defend us anymore... and they won't in the future. It's time for other means and other ways.

Read also: Lessons from the end of the metalworkers' strike in Cádiz, Spain, last month.