Labor issues add pressure on food traders’ profit margins

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Like employers in other industries, packaged food companies are doing what they can to attract potential workers, adding benefits and increasing wages. Wages in the food manufacturing sector were up 4.6% in July from a year ago, but these increases had little effect on the growing labor gap in the industry. ‘industry. According to the Consumer Brands Association industry group, the consumer packaged goods sector, including food, beverages, personal care and housewares, has 143,000 jobs, but added just 6,000 workers on last month.

“It’s barely crumbling,” said Katie Denis, vice president of research and storytelling at the association. “The employees have the upper hand right now because there are so many vacancies. “

At the same time, demand for products produced in understaffed facilities remained high. Sales of packaged goods have fallen only once in the past 18 months, Denis said. In the second quarter of 2021, sales increased by 8.7% compared to the previous year. That’s “crazy” growth, given the scramble for toilet paper and other packaged goods that dominated the second quarter of 2020, she said.

Many food manufacturing workers feel they have borne the brunt of the pandemic. Some have seen co-workers contract COVID-19 and felt they risked their lives coming to work while their employers were making an income.

“The workers have just had enough,” said David Woods, international secretary-treasurer of BCTGM, the union representing Mondelēz workers who recently went on strike. “Not just here, but I think it’s across the country, and I think it’s growing. The job market is slammed right now.

More than 1,000 workers went on strike at Mondelēz facilities, including a bakery in Chicago’s Marquette Park neighborhood. In the end, they approved a four-year contract retroactive to March that promises a 2.25% increase followed by annual hourly wage increases of 60 cents, signing bonuses of $ 5,000 and a doubled 401 (k) contribution.

As large as the increases are, the union’s biggest success has been to block the cost cuts the company sought to impose, Woods said. Mondelēz backed down from demands for cuts to generous health care coverage and premium pay for work on weekends.

Mondelēz issued a statement on the new contract, saying it was a “significant step forward for the company and its employees”. He added that it would be well positioned to increase capacity as it anticipates further volume growth.

The union has other major food companies in its sights. BCTGM represents workers at facilities operated by ADM, Conagra, Kellogg and other packaged food giants.

“We have a lot of contracts to open right now, and it’s the same fight. Companies are chasing the same things, ”Woods said. “They want to make workers work longer and pay them less. . . The workers will say enough is enough.

Workers have reached their breaking point, said Laura Garza, director of the Workers ‘Center at Arise Chicago, the nonprofit for workers’ rights that helps non-union workers at El Milagro. Garza says 85 of the company’s employees have contracted COVID and five have died. Workers want to be valued, she said. They know that collective action has power, especially since El Milagro tortillas remain rare in Chicago grocery stores.

El Milagro, who did not respond to requests for comment, did not agree to meet with the workers. El Milagro employee and Spanish-speaking Irma Gonzalez said through a translator that the company needs to encourage longevity and pay more to its longtime employees.

“Without enough staff to meet production targets, you are going to see shortages of products like tortillas,” she said. “If we are to address the shortage, this is the place to start.

The challenge in this new era of union bargaining is that unions and workers don’t play too much, LeRoy told the U of I.

“It’s a generational inflection point,” he said. “It requires a new way of thinking for management, and unions are going to have to rethink how to harness their power. “


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