The Indypendent e-news
The 136 workers who ended their strike against Bronx-based Stella D’oro Biscuit Co. in July could offer a test case of whether the public sector is willing to intervene on behalf of workers.
With the United States facing its greatest rates of unemployment and under-employment in decades — currently 9.4 and 16.3 percent respectfully — the efforts of Stella D’oro workers and neighborhood members will not be enough to save these jobs. What is needed is a coalition that includes neighborhood and labor groups, as well as legal and political activists, that will push the New York City Council and New York State Legislature, to apply eminent domain laws to keep the Stella D’oro factory where it is by having it become a worker-run cooperative.
The Stella D’oro workers, who are represented by Local 50 of the Bakery, Confectionary, Tobacco Workers and Grain Millers Union, have shown themselves to be a coherent and solid group of workers, striking for 11 months to keep their jobs — without a single participant crossing the picket line. On June 30, the National Labor Relations Board ruled that Brynwood Partners, the owners of Stella D’oro, had engaged in unlawful labor practices.
Hard on the heels of this victory, Brynwood Partners announced plans to close the factory by October. The time is ripe, especially in the era of the Obama presidency, to use eminent domain to expropriate with compensation enterprises like Stella D’oro, which are in danger of being sold or moved out of state by their super-profit-seeking owners and managers.
In the United States, eminent domain has been used for many decades to make way for the construction of various public projects, ranging from highways and hospitals to municipal offices, schools and public parks.
In 2005, the Supreme Court expanded the government’s power of eminent domain when it ruled in Kelo v. New London that the city of New London, Conn., could seize private property for reasons of “public purpose.” According to the Court, this was a permissible public use under the takings clause of the Constitution, as the intent was to create jobs and increase tax revenues.
In the preponderance of state constitutions, eminent domain is permitted for “stated public purposes” or a “recognized public purpose.” Compensation is paid at the market value of the factory at the time of expropriation.
In the case of Stella D’oro, the factory would be turned over, with an initial public subsidy, to the employees. Without owners and managers, the workers have the technical skills to run these factories as cooperatives while saving the huge salaries skimmed off the top by former managers.
If eminent domain was applied to keep the Stella D’oro factory in the Bronx, the purchase of the factory would be funded through a combination of state or city compensation (which would be paid over a period of years) along with a temporary public subsidy or low-interest loan guarantee, which would guarantee the factory’s productivity in the initial months of the transition. This financial assistance would, in most cases, be less than the tax concessions, subsidies and other benefits routinely showered on private businesses that maintain or bring jobs into a community. And in the Stella D’oro case, no new land seizure is required and no displacement of homes or other businesses would occur.
Eminent domain is a mechanism of legislative public policy, no different from the power to tax or regulate workplaces to ensure the health and safety of employees and surrounding communities. It must be used creatively. The current crisis of American labor requires new forms of alternative union associations that go beyond collective bargaining.
Why shouldn’t federal recovery and stimulus measures be directed at workers who make products or provide services rather than subsidizing failing investment banks and insurance companies?
Brynwood Partners cannot be free of societal obligations. By outsourcing their functions, they have broken a social contract for which there must be reparations and consequences. Labor has few options, and the use of eminent domain would begin a debate about the obligations and potential of communities, city councils and state legislatures to dent the silence and retreat of American labor before the loss of jobs with livable wages.
Peter Ranis is the author of Class, Democracy and Labor in Contemporary Argentina. He has written extensively about the factory
Comments
You have got to be joking. Seize a factory because it is going to be shut down? Maybe that flies in Argentina, but this is America and we frown on expropriation of corporate assets by the government. There's a word for that . . . what is it? Oh yea, communism. We've all seen how well that works.
If you really want to keep the factory, BUY IT. Fair, arms length purchase. Hate to break it to you but "saving/creating jobs" is not a public purpose. Otherwise, why don't we condemn your house and put in a Wal-Mart?That would create a lot more employment than what we've got there now.
No eminent domain. If you want it, buy it. All corporations are, at their heart, rational economic actors and would be glad to sell you any of their assets for what they are worth, especially in this economy.
You obviously didn't read Peter's article very well. He in fact proposes that the workers buy the plant for a fair market value. Eminent domain is used in his schema only to force the company to sell, which they have so far refused to do out of spite for the union.
Here is the relevant quote:
"The time is ripe, especially in the era of the Obama presidency, to use eminent domain to expropriate WITH COMPENSATION enterprises like Stella D’oro, which are in danger of being sold or moved out of state by their super-profit-seeking owners and managers." (My emphasis)
-Micah
I say why not seize the factory and give the owners the fair market value of a "closed factory." How much does a closed factory costs any way? I imagine less so than a working, fully staffed factory. Catch my drift?
What will workers get out of the recession? We know what the banks got...bailouts.
Workers get...falling wages, unemployment, shrinking benefits (apart from the white malcontents' madness at health care town hells, there is a national health care crisis), foreclosure, debt, mountains of debt.
Obama ought to buy the Bronx factory and shove it in the face of the right wing malcontents. He ought to also drive a hard bargain w/ Brynwood, cause why should we give a damn about them and the insurance industry to boot? Let booth go the way of the dustbin of history.
I'm with anonymous. Seize the joint and run it without capitalists. Creating jobs must absolutely be a public purpose. The bosses won't do it. Only the working class can reshape the economy to run in our interests.
Not a cent to bail out the bankers! Nationalize the entire banking system under the control of capitalismâÂÂs victims, not its agents! Open the capitalistsâ books so we can determine what has been stolen, hidden or squandered at our expense! Make the banks, corporations and the ruling class pay the full price of the crisis!
No to mortgage foreclosures! Reduce present mortgage payments in proportion to the capitalist-caused decline in value!
As the crisis affects not only the financial sector, but spills over into, and is itself in turn caused or reinforced by, simultaneous crises in manufacturing, soaring inflation, and a global climate crisis, we demand workerâÂÂs control of the monopoly corporations in manufacturing and mining, energy, and transportation. We call for the election of committees of workers to run these industries â workers who represent the millions whose pensions have been eliminated or are on the line and whose jobs and healthcare have been disappeared.
Jobs for all at top union wages! Reduce the workweek to 30 hours with no cut in pay to provide jobs for all!
Restore and guarantee all pensions! For a real Social Security system that pays pensions at union wage levels! Eliminate the private health insurers and providers, and merge Medicare and Medicaid into a free, universal, and public health system that covers all needed services without charge!
Bring all the troops home now from Iraq, Afghanistan, and every other country where theyâÂÂre stationed, and spend the trillions for war instead on rebuilding the nationâÂÂs inner cities, schools and hospitals. One hundred percent tax on the war industries!
Finally, the bipartisan support for bailing out the ruling class shows once again that workers need our own political organ: Break with the twin parties of capital! For a Labor Party based on a fighting union movement and all the oppressed and exploited!
http://www.socialistaction.org/pollack43.htm
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