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A Regional Supermarket Shakeup and America’s Split Corporate Culture

Aug 11 2014
Market Basket was known for doing things differently. Now the community is rallying against company changes.

What started several weeks ago as a small-scale protest by employees from New England’s Market Basket grocery stores is now being seen as “a fight that encapsulates everything that is wrong with corporate America” (BBC).

While Market Basket employees are not the only American workers raising their voices, their goal is not higher wages and better benefits, as was the case in the recent fast food strikes. Instead, they are risking their jobs and potentially the future of Market Basket—which analysts estimate is losing millions of dollars per day—for “a worker and community-oriented corporate culture that goes against the grain.”

The 71 Market Basket stores attract and keep customers for two reasons: their prices tend to be 15-20 percent lower than their rivals, and they offer exceptional customer service—in part because the chain pays above minimum wage and offers both health benefits and bonuses. All workers display their years of employment on nametags. I’ve shopped in many of their stores during the past eight years, and it’s not uncommon for “Marie: 31 years” to simultaneously scan my groceries and offer her opinions on my choices: “Don’t you love this ricotta? I’m so glad we started carrying it.”

So why are Market Basket employees risking their careers? Why are they joining with shoppers to rally by the thousands? On the surface, they are trying to reinstate the previous CEO, Arthur T. Demoulas (recently ousted by his cousin), who found a way to value both his staff and customers while making a profit. But a five-minute conversation with one of those employees will reveal that something much bigger is going on.

According to the Economic Policy Institute, which advocates for working families and fair wages, the average CEO’s pay has increased by 937 percent since 1978, while the average worker’s pay has gone up by 10 percent. Many major corporations now maximize shareholders’ profits and CEOs’ salaries by any means possible, including harsh work environments (i.e. Amazon) and corporate offices located overseas to avoid paying US taxes (Eaton, Enesco, and Rowan). When the new CEOs of Market Basket took the helm in July, one of their first acts was to distribute $250 million to nine family shareholders.

For the past ten years, the gap separating blue-collar workers from their chief executive officers has widened, and the recent recession has built up resentment toward those at the top. At the same time, McDonalds and others have lobbied against minimum-wage increases. According to the Bloomberg, Tyree Johnson, a 20-year employee of McDonalds in the Chicago area would need about “a million hours of work—or more than a century on the clock—to earn the $8.75 million that McDonald’s paid then-CEO Jim Skinner last year.” A few exceptional cases prove it’s possible to bridge that divide. While dozens of college presidents make more than a million a year, the head of a Kentucky university recently took a 25 percent pay cut to give pay increases to the school’s minimum-wage employees.

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