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Published February 10, 2014, 09:56 AM

Raising wages won't hurt business

Union workers at the Tyson Fresh Meats plant in Dakota City, Neb., will be getting raises. Members of the United Food and Commercial Workers Local 222 voted to accept the deal under a new five-year contract that covers more than 3,500 workers.

By: Dan Murphy, Agweek

Union workers at the Tyson Fresh Meats plant in Dakota City, Neb., will be getting raises. Members of the United Food and Commercial Workers Local 222 voted to accept the deal under a new five-year contract that covers more than 3,500 workers.

Production workers will receive raises of $1.60 per hour over the life of the contract. Starting pay will increase between $13.92 and $14.10 an hour. Top-tier maintenance workers can earn up to $19.95 an hour.

Few people have “no opinion” regarding unions, especially in the meat and poultry industries, with their long and often bitter history of conflict. Despite their minority status among American workers, unions continue to have an impact on labor relations and business productivity, vital issues for anyone concerned about jobs and the economy.

In the Seattle area, for example, the rocky relationship between The Boeing Co. and its primary union, the International Association of Machinists and Aerospace Workers, recently went through a game of high-stakes brinksmanship, with the union threatening a strike and the company threatening to move construction of its new 777X jetliner out of the region altogether.

After a contentious fight played out in the local media, the union membership local voted down the new contract offer, which, to be fair, was loaded with givebacks, including termination of the defined benefit pension plan. But, the union’s international headquarters ordered another vote, and on Jan. 3, workers approved Boeing’s offer by just 600 votes among more than 30,000 machinists eligible to cast a ballot.

The fallout from that struggle is still ongoing, as workers remain disgruntled, politicians are getting hammered and the public is taking sides like it was a presidential election, instead of a collective bargaining vote.

In the vote at the Dakota City plant, in contrast, both sides are singing hosannas. Tyson’s Bruce Pautsch says “the contract will benefit workers and help the company succeed.”

Marvin Harrington, president of UFCW Local 222, says the contract “improves what workers had before without significant concessions.”

Despite the media’s attention to wage rates in these disputes, most of the squabbling over contracts these days isn’t just about money. In the Boeing case, for example, the real sticking point was over pensions and health care costs. Most big corporations are likewise far more focused on controlling the costs of benefits and shedding retirement liabilities than they are about suppressing hourly rates.

Truth is, as automation assumes more of a key role across all of manufacturing, both the machinists and their UFCW brethren are facing a future where the jobs their members currently hold are inevitably going to slowly erode and someday disappear altogether.

But if entry-level, semi-skilled jobs are going the way of AM radio, why not? Why not hand over some cash in a dramatic gesture that doesn’t pose a whole lot of peril for the bottom line and didn’t do so even 20 years ago?

Of course, modern unions could certainly be less confrontational in their bargaining stance and more proactive on issues such as training a 21st century workforce, in-sourcing jobs and embracing new technology to improve productivity.

Corporations, on the other hand, don’t do themselves any favors when they report record earnings — Boeing, for instance, was rated as the top performing stock on the New York Stock Exchange this past year — and then simultaneously demand givebacks from the workforce.

The real bottom line here is that, going forward, labor costs will likely have even less of an impact on profitability for most labor-intensive corporations than at any time since the advent of the steam engine.

Now would be a good time to resurrect Luter’s idea of unilaterally raising wages for a workforce increasingly tasked with working smarter, being ever more productive and helping drive even greater profits to the shareholders.

Management’s certainly not above sharing in those profits, and if a little unprovoked generosity could positively impact labor relations, wouldn’t that be worth it?

Editor’s note: Murphy, is a veteran food industry journalist and commentator.