by David Macaray / May 4th, 2012
Most states in the union have laws against “gouging.” Broadly
speaking, gouging is defined as the practice of arbitrarily raising
prices on necessary goods, such as milk, bottled water, baby food, baby
formula, bread, etc., in response to civil emergencies (riots, martial
law) or natural disasters (earthquakes, floods, tornadoes).
For example, an anti-gouging law would prohibit the owner of a
neighborhood convenience store, in the wake of a massive earthquake,
from tripling or quadrupling the price of drinking water. This
consumer-protection device is one more instance of a benevolent
government’s vital role in regulating the so-called “free market.” What
could be fairer?
However, there are market fanatics out there who abhor these
anti-gouging laws. One of their arguments is the reliable, time-honored
appeal to the “slippery-slope.” This argument maintains that if we
allow the government to interfere with the sacrosanct Law of Supply and
Demand, if we give it the power to approve or disapprove of a sticker
price, the next step will be rigid restrictions on how much profit we’re
entitled to make, and the next step after that will be transforming us
from the Land of Opportunity into a communist state.
Another argument is that, even in a grave emergency—say, in the
aftermath of a major earthquake, with roads buckled, buildings
collapsed, gas lines and water mains broken—the free market, in its
genius, can be counted upon to automatically make the necessary
“corrections,” because competing stores will adjust their prices
accordingly, in order to attract customers (as if “comparison shopping”
will continue unimpeded).
But this gouging issue transcends retail commerce. The case can be
made that what’s been happening in the collective bargaining process
over the last couple of decades (actually going all the way back to the
Reagan administration) is a form of gouging—not in the statutory sense,
of course, where laws are being broken, but in the sense of businesses
taking unfair advantage of a customer’s distress (with the “customer” in
this case being the American worker).
Management’s embrace of the aggressive, take-it-or-leave-it approach
to contract negotiations is tantamount to a neighborhood store ripping
us off by quadrupling the price of baby food following an earthquake.
To the objections of an outraged consumer, the greedy store owner
replies, “If you don’t want the baby food, don’t buy it.” To the
objections of the labor union representing the employees, the greedy
company replies, “If you don’t like working here—if you’re unhappy
A perfect example of this scorched-earth policy can be seen at the
Caterpillar plant in Joliet, Illinois, where, just a few days ago, on
May 1, more than 700 Caterpillar employees (members of the International
Association of Machinists) went on strike to protest a substandard
contract being forced down their throats.
Why would a healthy company do that? Why would a healthy company
choose to grind a loyal, efficient workforce into the ground? For the
same reason a store owner, in the absence of anti-gouging legislation,
charges $5.00 for a bottle of water that, only a day earlier, had sold
for $1.25. Because they can.
It’s certainly not a question of being able to “afford” a decent
Caterpillar is the world’s largest maker of mining and
construction equipment, diesel engines, and industrial gas turbines.
They are enjoying record profits. In 2011, the company generated more
than $60 billion in revenue, and in the first quarter of 2012 has
already made $1.5 billion in profits. So successful are they, CEO Doug
Oberhelman was granted a 60-percent compensation increase in 2011,
putting him a shade under $17 million.
Again, why is this highly profitable company squeezing their
workers? Why are they playing hardball? Short answer: Because they
can. Because—with jobs scarce, with the economy fragile, with fear
still in the air—they believe they have the workers on the run. And
it’s happening all across the country as more and more corporations are
waking up to the realization that now is the opportune time to gouge the
Those Joliet IAM members have the right idea, and they deserve our
admiration. The only way to induce a stubborn company to bargain in
good faith is by denying them the opportunity to earn that money and
make those profits, and the only way to do that is by employees
withholding their labor. Shut ‘em all down.
This article was posted on Friday, May 4th, 2012 at 8:00am and is filed under Unions
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