Tuesday, August 17, 2010

Race to the Bottom

There's a strike at the Mott's apple juice plant in Rochester, NY. The company wants to cut workers' hourly wages, reduce 401(k) contributions, and increase the workers' share of health insurance costs. That's not uncommon in this economy, when so many companies are doing badly and losing money.

What's different here is that the parent company of Mott's, Dr. Pepper Snapple, is profitable, to the tune of a $555 million profit last year. The company claims that the workers at the Mott's plant are overpaid compared to other workers with similar jobs in the Rochester area and also that "as a public company, Dr Pepper Snapple Group has a fiduciary responsibility to operate in the best interests of all its constituents, recognizing that a profitable business attracts investment, generates jobs and builds communities.”

Dr Pepper Snapple increased its dividend by 67% this year, so we can safely say that they're looking out for their shareholders.

As one of the striking workers says, it's disgusting that they want to cut pay to the people who're doing the work. Note to Mott's: when you're profitable, you should be rewarding your workers, not cutting their pay.

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