So it is 2:00 a.m. and I can’t sleep, again! And I’m lying in bed thinking to myself about the St. Louis Justice for Janitors Campaign and how this struggle ties into the inner contradictions of capitalism.
I’m thinking about the Contract Cleaners Association (CCA), an association of eight different cleaning companies, and how they have bound themselves together to keep the wages of 3,000 janitors down. The Service Employees International Union (SEIU) Local 50 has been negotiating with CCA since November 16, 2001 for a $1 an hour, annual increase. CCA says its final offer is 25 cents an hour, annually.
Here in St. Louis, CCA plays a dominant role in the custodial and janitorial business. They are the price-setters. They have come together to control the market on custodial and janitorial work. Sort of like how OPEC controls the oil market.
The cleaning companies that make up CCA are mutually interdependent also. In capitalist society this means if a member of the association raises janitors’ wages no one else in the association will follow. The other association members will wait and watch. The margin of profit for the one company will decreases as the standard of living of its employees’ increases. There is a dialectical relationship here. And as this margin of profit decreases the remaining association members scurry to appropriate the share of the market it can no longer maintain.
Even if other companies in the association wanted to increase the standard of living of the janitors by granting wage increases, health care benefits and comprehensive pension plans they would be compelled not to. They would face the possibility of losing their share of the market and eventually be run out of the business by the remaining members of the association.
Cleaning companies bid for contracts. The number of contracts they get is their market share. And the lowest contract price gets the bid. Thus the largest market share. The purpose of CCA is to keep the contract minimum artificially low, which means keeping wages artificially low, and to eliminate competitors.
But there is some competition. It makes up an insignificant share of the market though.
Recently SEIU Local 50 announced a “historic” agreement with 10 independent cleaning companies, covering several hundred janitors. These cleaning companies have agreed to wage increases of 70 and 75 cents an hour, annually.
According to Local 50, building owners would need to increase operating expenses by 5 percent to provide all janitors with contract wages and health benefits. The average rental cost for a 100,000 square foot building in St. Louis is $15.92 per square foot. Increased operating expenses translate into 1.6 cents per square foot for building owners.
In the short term, the 10 independent cleaning companies may be willing and able to cover the additional costs, which means a cut in profits.
In the long run though, the opposite is true. The 10 cleaning companies will become more sensitive to the relevant market and increase their share of profits by cutting into the living standards of the janitors, thereby increasing their market share, or CCA will eventually gain back the portion of the market it has lost.
All gains under capitalism are temporary. The contradictions become even more clear in this period of economic crisis. Capitalism is to blame for poverty wages. No system based on greed can provide for the needs of the many. The barbarity is obvious! Socialism is the answer!
Tony Pecinovsky is a frequent contributor to the PWW from St. Louis, Mo. He can be reached at email@example.com