News & Commentary

April 9, 2023

Will Ebeler

Will Ebeler is a student at Harvard Law School.

In this weekend’s news and commentary, Barnes & Noble Education workers start a unionizing campaign; Congressional Democrats raise new concerns about last year’s Warner Bros. Discovery merger; workers at a Ford plant in Mexico reach a tentative deal; and a 2019 plan to improve labor practices at cocoa farms struggles to achieve its goals.

On Thursday, employees at a Barnes & Noble Education Inc. store in New Jersey announced a unionizing campaign. The workers at the Rutgers University bookstore—one of 785 campus bookstores run by the spin-off of Barnes & Noble Inc.—planned to submit an election petition to the NLRB. Organizers say that most of the roughly 70 employees at the store support unionizing. They hope to join the Retail, Wholesale and Department Store Union and achieve improvements in pay, job security, and work hours.

On Friday, four Congressional Democrats asked the Department of Justice to review last year’s Warner Bros. Discovery merger. Senator Elizabeth Warren and Representatives Joaquin Castro, Pramila Jayapal, and David Cicilline asked DOJ “to investigate the state of competition in affected labor and consumer markets following the consummation of this merger.” After the merger, the company laid off thousands of employees; the four lawmakers raised concerns that it led to reduced opportunities for artists, particularly Latino artists. In the wake of the merger, the company canceled or downsized several high-profile shows, several of which featured Latino stars. Although it would be unusual for DOJ to unwind an already-completed merger, the lawmakers pointed to “somewhat unprecedented” actions by WarnerBros. Discovery, including its decision to cancel the movie “Batgirl” after shooting had already been completed. The LA times described such a decision as “exceedingly rare.” The lawmakers noted that even if the WarnerBros. Discovery merger isn’t revisited, DOJ should consider the merger as an example of the risks of some deals.

On Tuesday, a union representing workers at a Ford plant in Chihuahua, Mexico reached a tentative agreement with the company to raise wages by 8.2% this year. The National Union of Ford Motor Company Workers represents the 2,000 workers at the plant. The union had been pushing for wage increases above inflation; in February, the inflation rate in Mexico was 7.6%. The agreement will now go to a vote.

Finally, a Reuters article last week highlighted the struggles to address labor abuses in the cocoa-growing industry. Abuses in the industry have been well-documented. In 2019, Ivory Coast and Ghana—which together produce two-thirds of the world’s cocoa—reached an agreement with the chocolate industry to try to improve labor conditions. The plan involved setting a $400-per-metric-tonne living-wage premium over global cocoa prices. The premium, called a Living Income Differential (LID), would have two benefits: it would increase the prices paid to cocoa farmers. And it would increase the countries’ tax intake enough to build up rainy day funds that could then be used to guarantee farmers a living income even when global prices fell.

However, the program has seen several struggles. The COVID pandemic cratered global demand, which led to a drop in cocoa prices before the countries could build up enough funds to guarantee a living wage. Another failure has been that commodity trading houses, which purchase cocoa to sell to major chocolate producers, have negotiated around the premium. Both countries have a separate “country premium” they charge to purchasers; after the LID was implemented, the purchasers began negotiating down the country premium. Cocoa traders have said that chocolate-makers don’t pay enough to cover both premiums. These struggles mean that Ivory Coast farmers have only been paid the target price once since the program began in 2019.

Antonie Fountain, the director of a group seeking fair prices for farmers, suggested that for the scheme to succeed, global cocoa supply needs to be controlled. For decades, cocoa supply has often outpaced demand for chocolate, which has kept prices low. For individual farmers, the only way they can make a living is by increasing their production. And individual countries like Ivory Coast and Ghana face risks for constraining production because there are increasing investments in other countries.

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