"Scratching and Surviving" Less Newsworthy Than Politicians at Labor Protests: Scant Media Coverage of Republic Windows Workers After Sit-In

During the recent protests at Republic Windows and Doors, politicians, the media, the company, and union leaders played political football with the laid-off workers. Their advocacy led Bank of America and J.P. Morgan Chase to pay the wages and benefits that Republic Windows and Doors owed its workers. The company, however, escaped scrutiny by convincing the public that Bank of America unfairly prevented it from paying its employees. Meanwhile, the company's owners moved to Iowa and restarted operations in a cheaper location with nonunionized workers.

Progressives and the Media Have Now Abandoned the Workers
Although progressive advocacy in this situation failed in many respects, perhaps most critically, the Left did not demand that governmental officials strengthen the economic safety net, which the recent economy has strained. Now that the politicians, activists and the workers themselves have vacated the scene, the workers' struggle no longer generates intense political or media attention. Progressives, liberal politicians and the media have now discarded the workers -- just like the bankrupt company did.

Must Strengthen Economic Safety Net Because "Sit-In" Will Not Succeed for Most Workers
But progressive advocacy and media analysis regarding the continued struggles of the laid-off workers could offer more to them and to other distressed workers nationwide than the passionate activity surrounding the sit-in. Contrary to the most enthusiastic progressive arguments, workers across the country will not have many opportunities to replicate the success of the Chicago sit-in.

The Chicago protest succeeded due to a rare confluence of numerous forces: (1) the nation needed to vent anger regarding the bailout and the declining economy, and Bank of America became the obvious target; (2) Bank of America cares about its image and ultimately capitulated to the negative attention, including Governor Blagojevich's decision to ban the bank from doing business with Illinois; (3) the company apparently had powerful political contacts in Chicago who helped keep public criticism on the bank, not the company's illegal actions; (4) local union leaders and the workers themselves had sufficient drive and organization to lobby for justice; and (5) the media found a ratings-generating story and pounced on it.

But in the future banks will respond more swiftly and creatively if companies attempt to shift the blame for their own violations of labor laws. The media will not hold vigils at each imperiled work site; this storyline is now dull. And the involvement of political actors and the stamina of workers will vary with each scenario.

Scattered news accounts have begun to do the necessary work to publicize the broader issues facing workers in the declining economy. Several media outlets, for example, have reported on the problems states are having keeping their unemployment benefits budgets solvent. The increased unemployment filings have depleted their funds, sending them to the federal government for assistance.

Other stories have analyzed the problems that typical workers face when their companies shut down. Although the Chicago workers received unpaid wages due to a rare political opportunity, in the average case, insolvent companies move into bankruptcy, where workers usually do not collect the full amount of money owed to them (if they collect anything at all). Also, many workers do not receive their unpaid wages due to limitations of shut-down legislation.

Where Are They Now?
Some news stories are beginning to detail the struggles of the former employees of Republic Windows and Doors. Here is a snippet from one of those stories:

Workers at Republic Windows beat their bosses to win payouts required by law when their plant shut down. But now, they're facing a reality millions of other Americans share: being unemployed at Christmas.

At Dagaberto Cervantes' home, it's a bittersweet Christmas with few presents under the tree. The former Republic Windows employee received $4,000 in hard-won shutdown benefits, but he doesn't know when he might work again. . . .

After a six day sit-in, the workers won, receiving severance, vacation pay and temporary health care. Still, like so many now, they're jobless. Cervantes is already looking for work. . . .

[But] [u]nemployment in Illinois now stands at 7.3 percent, the highest in 15 years. Since January alone, Illinois has lost 72,000 jobs. . . .

As more workers lose their jobs, perhaps progressives and the media will find their stories as equally (or even more) inspiring as watching self-interested politicians make cameo appearances at a labor sit-in.

[Note: Google services the outside links attached to this post (e.g., Digg, Email this, etc.). Someone hacked Google today, so some of these links take you to spam webpages. I apologize for any inconvenience. Google is on the case!]



Related Readings Around the Web:

What Comes After Factory Workers' Victory for Labor?

WARN Act Falls Short for Job Layoffs

Related Readings on Dissenting Justice:

MADE IN IOWA: Did Company in Chicago Sit-In Illegally Discard Its Workers and Quietly Relocate While Liberals Forced BOA to Pay for the Shady Scheme?

Republic Windows and Doors Received a Bailout from Chicago Before It Bailed Out of Chicago

Laid-Off Republic Windows and Doors Workers: Pawns in Political Football

Factory Closes in Chicago; Workers Invoke Bailout During Protest

What (I Think) Progressives Should Have Done for Workers of Republic Windows and Doors

New Chapter for Republic Windows: Bankruptcy

Dodd's Discriminatory Bailout: "Regime Change" for Main Street, But Not for Wall Street?

_________________________________________________________________
What the media are not saying about the Chicago workers' sit-in:

* MADE IN IOWA: Did Company in Chicago Sit-In Illegally Discard Its Workers and Quietly Relocate While Liberals Forced BOA to Pay for the Shady Scheme?

* Republic Windows and Doors Received a Bailout from Chicago Before It Bailed Out of Chicago

* Laid-Off Republic Windows and Doors Workers: Pawns in Political Football]
_________________________________________________________________


Regime Change in Detroit?

Senator Christopher Dodd, who chairs the Senate Banking Committee, has argued that Richard Wagoner, the CEO of General Motors, should resign before the troubled automobile manufacturer receives federal financial assistance. And this morning, he has broadened those comments to implicate all automakers: "'[I]t's not my job to hire and fire, but what I suggest is, you need to have new teams in place here . . . if you're going to convince the American public' that the financial relief plan is necessary and justified" (italics added). Dodd also believes that Chrysler and GM will probably have to merge so that both companies can survive. My question for Dodd: Why did you fail to demand "regime change" among Wall Street recipients of federal aid?

President-Elect Barack Obama was less direct when he addressed the issue. During an appearance on Meet the Press, Obama said that the issue of mandatory changes in leadership "may not be the same for all companies." At press conference following the show, however, Obama offered an additional perspective on the issue:

If the management team "that’s currently in place doesn’t understand the urgency
of the situation and is not willing to make the tough choices and adapt to these
new circumstances, then they should go. . .If, on the other hand, they are
willing, able and show themselves committed to making those important changes,
then that raises a different situation . . . .”

Although Obama refused to define what "changes" he envisions or to take a position regarding a specific company or executive, his statements together with Dodd's comments show a new toughness among Democrats towards potential recipients of federal "bailout" assistance. During the general election campaign, members of Congress engaged in bipartisan rhetorical grandstanding and promised to place numerous conditions in the bailout package. The final statute, however, gives very broad discretion to the Secretary of the Treasury (see my analysis here). Now, Democrats have indicated that they might require company executives to step aside as a condition of receiving federal money. That's very tough talk.

Why No Regime Change on Wall Street?

But I am trying to understand why replacing corporate management has only recently become a possible prerequisite to the receipt of federal assistance. The various financial institutions that have received federal assistance face poor economic conditions because they recklessly decided to engage in risky -- but lucrative -- mortgage lending, bundle those mortgages and sell them as securities, or invest in securitized mortgage assets. Citigroup, the recent recipient of the largest financial bailout to date, engaged in all of these practices through its various divisions. Flawed managerial decisions led to these bad investments and to the present erosion of available credit. If Congress wants "heads to roll" before assisting companies, this same logic should apply evenly to all economic sectors.

In many ways, however, the auto industry could be less culpable for its financial woes than the banks were for their own problems. Auto companies lend money to purchasers and probably made poor choices during the recent "easy credit" run. They can also invest in risky mortgage-backed securities. But most of their trouble today results from not having sufficient money to conduct prospective business, rather than from the unraveling of prior investments. They do not have access to credit precisely because the bank crisis has caused credit to tighten. Prospective car purchasers also face difficulty securing loans, which exacerbates the situation (see this article in Forbes on the subject and on a potential remedy). Irrational exuberance in the housing market caused most of this problem. The greatest blame lies with financial institutions, mortgage brokers, realtors, home builders, state and federal regulators, and home buyers. The auto industry does not deserve tougher restrictions than Wall Street.

Then Why Treat Wall Street and Main Street Differently?

The Election is Over
Perhaps the Democrats feel safe taking a tougher position with companies seeking federal assistance now that the election has taken place. Even though most voters disagreed with the banking bailout, they also felt that not supporting the legislation could harm the economy. The House Republicans received a fair amount of criticism for blocking the initial plan. Democrats probably wanted to avoid similar complaints.

Financial Institutions Give Much More Money to Political Candidates Than Automakers
Another, more ominous explanation for the disparate treatment of automakers relative to banks could involve campaign financing. According to research completed by the Center for Responsive Politics, Dodd, who chairs the Senate Banking Committee, tops the donor recipient list of several banking institutions. Furthermore, members of Congress who supported the bailout received far more money in campaign donations from financial institutions than legislators who voted against the bill. In the House, legislators who supported the bailout received 51% more in campaign contributions from banks, and in the Senate they received twice as much (see here and here).

Automakers also contribute to candidates, but they do not donate nearly the same amount as banks. According to data compiled by the Center for Responsive Politics, automakers split their donations among the two major parties during the recent election cycle, but they contributed only a fraction of the money that financial institutions gave (The Center for Responsive Politics website has a tool that permits readers to research campaign donations by industry.). Keep in mind that donations come from individual employees and their political action committees. Auto workers will have less money to donate on average than Wall Street bankers. Car dealers donated more money than automakers, but most of it to Republicans. Furthermore, their donations do not compete with those of financial institutions. Given the role of money in politics, it is difficult to deny some degree of industry capture with respect to regulated entities and regulators.

Update: I have not found any major media coverage of this particular dimension of Dodd's comments, but I did find this entry by Deb Cupples on the Buck Naked Politics blog. Blogs can provide a wonderful alternative to popular news sources.