So they’re getting a raise on the plant floor at the Hormel Foods Corporation.

Wednesday, September 15, 1999

So they’re getting a raise on the plant floor at the Hormel Foods Corporation. What I wouldn’t give to have been a fly on the wall at some of those negotiations – then again, from what I read in the papers, everything was rosy, both sides are happy and it is the best contract in the meatpacking industry today.

Let’s look at that a little more closely.

The previous contract, ratified in 1995, put the base rate (the rate a new worker will reach after 18 months) at $12 an hour.

Under the new contract, the base rate will climb to $12.35 in the beginning of 2000, and will eventually reach $13 over the four-year period of the contract.

That’s a raise of $1 per hour in four years.

Compared to the last 20 years, that’s quite an achievement.

According to an excerpt published in the City Pages on Aug. 14, the base rate at Hormel was $10.69 an hour in 1978.

In 1990, it was $10.70 an hour.

A penny in 12 years, and $1.30 in the following nine years, now another $1 in four years … I wonder if there’s some bizarrely figured, unwritten half-life on raises that’s finally operating in the meatpackers’ favor.

Then again, it could simply be the amount of profit the meatpacking industry – Hormel very much included judging by the last quarter’s results – has been making since the hog market went to Hades and the family farm slipped one step closer to extinction. Amazing how the price of that delicious thick-sliced Hormel bacon didn’t drop when farmers were getting $13 a hundred-weight instead of the needed-to-make-a-minimal-profit of $30 or $40 per hundred-weight.

Or it could be the fact that Austin has something close to a 1 or 2 percent unemployment rate. According to Development Corporation of Austin CEO George Brophy, local industry is short about 200 workers right now. Desperate times call for desperate measures.

I know a third-year teacher who moved here in 1976 got $9,600 a year. Today new teachers in the Austin public school system start at $22,000 or more. Teachers wages are more than double what they were 20 years ago.

I’m not picking on Hormel individually, I’m picking on the capitalist notion as a whole as it’s developed in the United States.

No one would deny that having Hormel here has been of benefit to Austin. Without the Hormel Foods Corp. and the Hormel Foundation we wouldn’t have such an impressive high school to boast of or our wonderful library. Nor would we have the quality of golf country club or YMCA or a million other nice things to be found in and around Austin.

However, no matter how much giving money to worthy causes improves the standard in Austin, raising wages will make a lot more people much happier – even those who don’t work at the plant.

Why? It’s fun to spend your own money and, besides, we might end up with a more stable population.

Higher wages mean some people born and raised in Austin might just stay here and work at the plant. Higher wages might also mean the people who have moved here to work at Hormel will stay in town, buy a home instead of rent, send their children to our schools and become a part of the community rather than moving on to the next job that pays a little more.

Jana Peterson’s column appears Wednesdays