Market Basket teach-in takes place on campus

The Keene State College American Democracy Project hosted the Market Basket Teach-In on Thursday, Sept. 11. 

The standing-room-only crowd piled into the Student Center Flag Room to hear a panel of students and faculty discuss the issues surrounding the Market Basket labor dispute.

KSC Management Professor Emily Porschitz facilitated the discussion.

She opened by explaining the uniqueness of the Market Basket case and how it will be important going forward.

“It is certainly a case that the management world will be diving into deeply. It will be a case study for generations to come. It is an epic saga,” Porschitz said.

Porschitz said it is not uncommon for family business to encounter problems because of financial distress, however in the case of Market Basket, the family issues arose while the company was financially stable.

“In this case the family problems came first, there really were not economic problems in the company. It was a very strong company,” Porschitz said.

David Walsh / News Editor

The employee uprising began on June 23 when CEO Arthur T. Demoulas was relieved of his duties.

Porschitz stated, “Three-hundred employees held a rally outside Market Basket’s Chelsea, Mass. store the next day, on June 24. Right away we started to see a big shake up after Arthur T. was fired.”

Customers also joined in the fight, according to Porschitz, “Things came to a stand-still pretty quickly.”

Following the employee strike and customer boycott, Market Basket shareholders finally struck a $1.5 billion deal on Aug. 27 to sell the majority of the shares to Arthur T. Demoulas, reinstating him as the company’s CEO.

“A lot of that money is coming from banks and The Blackstone Group, a private equity firm, that put up over $500 million towards the sale. There is a large amount of debt that Market Basket is carrying that it really hasn’t before,” Porschitz explained.

Patrick Dolenc, professor of economics at KSC, was next to speak.

He explained how the role of a CEO has changed and credited the advent of stock options to the growing discrepancy in pay between CEO and employee.

“Stock options give CEOs the opportunity to take advantage of some blatant manipulation, that might be legal, and sometimes some very shrewd manipulation, that might be entirely legal, of stock prices,” Dolenc said.

The theory behind stock options is that CEOs will make better decisions for the company, since they can make financial gains if stock prices climb.

The stock options give CEOs the opportunity to, “Buy stocks at a guaranteed price. If the stock goes up a lot they can buy stock at a lower price, then turn around and sell it at the higher price and pocket quite a bit of money,” Dolenc explained.

The ability for CEOs to capitalize on company stock has led to large discrepancies in pay between CEOs and the “average worker,” according to Dolenc.

“Right now it’s 272-to-1. If the average worker makes 10,000 dollars, then the CEO would make 2.7 million dollars,” Dolenc said.

He then contrasted this figure with what CEOs in other nations make.

“France is 104-to-1, United Kingdom is 84-to-1 and Japan, the lowest that I looked at, was 67-to-1,” Dolenc added.

Professor Dolenc was followed by former KSC professor and current democratic nominee for District 2 Cheshire County Commissioner, Charles “Chuck” Weed.

Weed spoke about how labor organizations are falling out of fashion across the country.

“The high point of labor organization turns out to be 1954, in which 35 percent of the workers in the country were organized and ever since it has been on the decline. For instance, in 2007 the figure is about 7 percent of private workers are organized,” explained Weed.

He continued, “In 1970 there were 381 strikes by major corporations. In 2010 there were 11 [strikes]. That is a 97 percent reduction in the amount of strikes in the country.”

“There are a couple things that are unique about the movement. How did they get the warehouse workers and the truckers to agree with the consumers that indeed this is a terrible thing for Arthur S. Demoulas to do. Right from the beginning they had a tremendous unity,” Weed stated.

The success of the case is unique because Market Basket employees are not members of an organized labor union.

KSC junior and communications major Katelyn Charron has worked for Market Basket for four years.

Charron said Market Basket was not her first choice of jobs, but recalled others telling her, “You will never be treated so well by an employer. After being there for four years I have come to appreciate what that really means. They really strive to have a high employee and customer satisfaction.”

Charron recalled, “We knew about the conflict, it wasn’t a secret. There was a general consensus in the company that we really wouldn’t go quietly if this happened.”

Charron said, “We were surprised about the customer support and the boycott. Customers would take receipts from other stores and post them on the windows of Market Basket to show that all this money they are spending they could be spending here, but they chose not to.”

KSC senior Hersch Rothmel attended the teach-in and found it to be an interesting conversation.

“It was really good. It gave a really nice overview of the overall context of how the Market Basket came to be and the political realm in which it happened. I think they pointed to the fact that this is going to lead to more conversations about worker organization and CEO accountability for their companies,” Rothmel said.

He continued, “As Professor Dolenc said, there is a large discrepancy between how much CEOs are getting paid and the quality of their work. If we can look at that closer and look at Arthur T. as a model of a responsible CEO, we can start working on this income inequality issue we have going on.”

David Walsh can be reached at dwalsh@keene-equinox.com