Kellogg’s Corporation Isn’t the Good Guy in This Story

Dec 27, 2021 | PDA Blog

photo: Sen. Bernie Sanders addresses Kellogg’s workers in Battle Creek, MI

By Tina Shannon & Randy Shannon

PDA is all-in supporting the recent waves of strike activity in the United States. We issued a national call to boycott Kellogg’s cereals to support the striking Kellogg’s workers. We wanted to strengthen the growing boycott and help organize nationally to intensify it.

1,400 workers were on strike for three months, rejecting Kellogg’s take-it-or-leave it contract offer to the Bakery & Confectionary Workers Union (BCTGM). When the union members rejected the contract and stayed out on strike, Kellogg’s announced that it would replace the workers with a scab workforce.

As in the recent United Auto Workers (UAW) strike against John Deere, a key issue for Kellogg’s workers was the two-tier wage system. A basic principle of unionism is “equal pay for equal work.” This means that people doing the same or comparable job should receive the same hourly or salaried pay. 

At the dawn of the neoliberal era during the Reagan Administration, the two-tier wage system became a top priority of “corporate America” as a way to pacify established union workers while stopping the gains they’d made from being continued into future generations.  Employers have already, for many years, openly differentiated lower pay rates for women workers, African-American, and other minority workers. This massive employer discrimination is evident in the national lower average rates of pay for women and minority workers. Wall Street’s new neoliberal policy established discriminatory wages for all new employees.

The two-tier wage is a national corporate policy enforced by Wall Street bankers on the corporations they control, such as John Deere, Kellogg’s, and many others. Its purpose is to serve the neoliberal policy of transferring evermore wealth from the hands of working families into their own. It removes that wealth from the communities which created it, increasing extreme economic inequality. 

Kellogg’s established their two-tier wage system in 2015. In that system 30% of the workforce received lower wages and lower health-care and other benefits than “legacy” workers. This established a lower tier of “transitional” workers who resent the discrimination. They often quit to seek better employment. This system divides the workforce and weakens the union’s ability to protect the workers, making contract negotiations much weaker. 

After six years the Kellogg’s workers were determined to end this policy of open wage theft. That’s why they maintained the strike, rejecting increased benefits for only the “legacy” workers. Under the contract that union workers approved, Kellogg’s maintains the two-tier wage system. But the union workers, by risking their jobs and their livelihood, were able chisel away some of the two-tier system.

The contract increases wages for all workers and includes an annual cost of living increase for all workers. “Transitional” workers will not enjoy improved health care benefits or pensions. However, Kellogg’s agreed to move “transitional” employees with four or more years seniority into the “legacy” tier, and to move 3% of workers into the “legacy” tier each year of the contract. This was the only real concession by Kellogg’s. Their Wall Street bankers had intended to expand the “transitional” workforce and limit the “legacy” workforce, so at least this depredation was prevented. The union was forced to accept these concessions despite their determination to end this discriminatory wage system.

If the drive to organize and unionize is to continue, the ability to unionize incoming workers is essential. Companies know this. The two-tier pay/benefits scheme was designed to make it harder to win the loyalty of those entering the workforce. It also steals wages from our own kids, because after all, they are entering the workforce. This economic and social advantage is why the corporations cling to it. As we can see, this false divide also undermines our generational solidarity. Our kids want union wages and union benefits. Just ask them. We must work to support their claim to a better future.

We progressives must continue to support unions that are striking, risking their jobs and their future to end this evil neoliberal policy. PDA will continue to focus on this widespread attack on the workers, our family members, and friends. We will continue to recognize the negative effect of Kellogg’s, John Deere, Nabisco, and Kaiser Permanente and all corporations that try to divide our generations and our societal cohesion. Kellogg’s settled a contract under pressure from all of us. They didn’t “give” the workers anything. 

US auto manufacturers have abandoned the two-tier wage system because it affects safety and production and because we, with the unionized workers, demanded it. PDA demands that all companies abandon the two-tier wage system and that the minimum wage should be raised to at least $15 per hour. It would help all of us in so many ways.

2 Comments

  1. Tom Gruver

    Why don’t we have two tiered pay systems for our state and federal congressmen, judges, DA’s and anyone who is paid with tax money. No second tier pay until elected for fourth term ???

  2. June Mays

    $15:00 isn’t enough actually but it’s better than the current minimum. It will definitely help families with children and it should be signed into Law. I am 75 and I raised 2 children working at the Post Office for 20 years. I started out @ $2.35 and when I retired my hourly rate was $17:40 per hour in 1984. Moved to Arizona where I went to work for State of Arizona as case manager after 21 years ending pay was what what I left In California at the USPS this is actually part of the high crime rate. People are desperate and need to feed and house their families