41 Comments - Knome Sane - Friday, May 9, 14 @ 10:22 am: “Should Quinn intervene?” By doing what exactly? - wordslinger - Friday, May 9, 14 @ 10:23 am: What could Quinn do? The company’s leaving. Here comes a state handout…. - Smoggie - Friday, May 9, 14 @ 10:25 am: Absolutely, You see, there are not nearly enough fast food places in the Loop. Our Governor should stop what he’s doing and personally make sure that one particular fast food place remain operational. That seems like a great use of state resources. - Louis G. Atsaves - Friday, May 9, 14 @ 10:28 am: So the old company with recently unionized employees lost a state contract to provide food at the State of Illinois Center (James R. Thompson Center) food court located on the lower level? The new contract was approved by someone. Was it put out to bid? Is the winner a company with non-union employees? More information please! - Spliff - Friday, May 9, 14 @ 10:32 am: should he NO Will he YES - Oswego Willy - Friday, May 9, 14 @ 10:36 am: Yikes, what is the solution? They are making a business decision. ===Yet, as the company plans to leave in the coming weeks, workers will not make it to the wage increase they’ve bargained for.=== Is it now up to the state to force companies to “stay”? - Truthteller - Friday, May 9, 14 @ 10:49 am: Yes. He should direct that any new contractor be required to hire the employees and honor the Sodexo contract. If a company can’t or won’t pay the negotiated rate, then it shouldn’t be allowed to have a contract with the state. Why should the State subsidize the company whose employees might qualify for food stamps or other govt. benefits in the absence of a decent wage? - Wensicia - Friday, May 9, 14 @ 10:55 am: If the company leaves, the contract is voided. Quinn doesn’t have the authority to intervene. - VanillaMan - Friday, May 9, 14 @ 10:58 am: The Governor cannot legislate that restaurants stay open in the Thompson Center if the restaurants aren’t successful. The Governor cannot mandate that the rental space in the Thompson Center remain a restaurant if no one sees it as a business prospect as a restaurant. The Governor cannot demand that whoever contracts to use the space currently occupied by the Great State Fare hire their ex-workers. The Governor cannot mandate that workers with offices in the Thompson Center eat at the Great State Fare. This is a story with no connections to the Governor’s minimum wage proposals. - Nonplussed - Friday, May 9, 14 @ 10:59 am: The Sodexo restaurants in the JRTC food court all suck. Good riddance! - Arizona Bob - Friday, May 9, 14 @ 11:00 am: =is leaving its post at the State of Illinois building= What the heck does that mean? Does Sodexho just contract out it’s workers, does it manage the operation, or does it have what amounts to a “catering” contract? Will the food court be closed, or will it just be taken over by “others”? Time and again we’ve seen this played over with unions who demand more, get it, then see the “golden goose” die. In the 1960s my Dad was a USWA member for Crane company at 43rd and Kedzie. A new owner had just bought the company (Evans)so the unions wanted to show him “who’s the boss”. They demanded raises beyond all reason, and went out on strike when they didn’t get them. My Dad thought they were nuts, but he stuck with the strike. After months of striking, Evans went back to the union and gave them two choices. They could accept raises at a little more than cost of living and he’d keep the foundry and technical operations in Chicago, or he’d give them the raise they requested and he’d move operations to Alabama and Tennessee. They took the higher raise, thinking he wouldn’t dare move away. They were too good and he needed them, or so they thought. First, the foundry left for Alabama. Then engineering and estimating. Eventually 43rd and Kedzie wound up being an empty, demolished wasteland, and 10,000 direct jobs, and likely another 10,000 indirect jobs, were lost to Chicago. It devastated the Brighton Park community The laid off workers whined and complained, but it was always “somebody elses fault”. I wonder if that’s going to be taught in our schools as part of the Sen Mike Hastings mandated “union” curriculum in public schools. This abject lesson of the reality of what unions do provided me with the most important “education” about unions I could possibly receive. - Knome Sane - Friday, May 9, 14 @ 11:09 am: =If a company can’t or won’t pay the negotiated rate, then it shouldn’t be allowed to have a contract with the state.= Let me get this straight: a company that takes over retail space in a state owned property vacated by another company must “accept” the negotiated hourly wage that the new company had no hand in negotiating? Looks like the food court in the JRT building will be vacant for a loooooong time. - Anonymous - Friday, May 9, 14 @ 11:10 am: Quinn should use grant money to give these workers some cash to walk around before the election you know to get his message out. - Big Joe - Friday, May 9, 14 @ 11:13 am: This doesn’t sound like a situation for the Gov. to get involved with. Maybe the workers would like to re-evaluate their salary demands now? Too late. - A guy... - Friday, May 9, 14 @ 11:15 am: Institutionalizing Government food service would be a sure disaster. That’s what some of the posts here suggest. I don’t know any particulars on this, but if the new wage pushed them over the tipping point of making a profit, and that new wage was higher than a minimum wage paid by competitors, this place made a business decision. Is anyone eyeing this as a great business opportunity to replace them and seize upon the opportunity? - Anonymous - Friday, May 9, 14 @ 11:19 am: You mean mla company left and jobs disappeared after minimum wage was increased? Shocking. - zatoichi - Friday, May 9, 14 @ 11:21 am: From minimum wage to $10.65 and the company leaves. Who would have thought that was possible? - Wumpus - Friday, May 9, 14 @ 11:28 am: Quintervention…call the national guard and forbid the company from leaving. Quinntervention should include courting a replacement and asking them to pay a certain rate. Maybe make them state employees - Mason born - Friday, May 9, 14 @ 11:34 am: WOW Really wonder what Quinn is supposed to do. I fear for what he will do. - Steve - Friday, May 9, 14 @ 11:35 am: You mean the demand for labor is a downward sloping curve?? - wordslinger - Friday, May 9, 14 @ 11:42 am: –From minimum wage to $10.65 and the company leaves. Who would have thought that was possible?– Give me a break. Sodexo is one of the biggest corporations in the world. They had revenues of $18.4 billion last year. They and SEIU have been knocking heads all over the country for years. - Anon. - Friday, May 9, 14 @ 11:55 am: No, especially if he can tie Sodexo to Rauner somehow. Or at least claim they’re connected, and make Rauner deny it. - Ghost - Friday, May 9, 14 @ 11:56 am: Arizona Bob you left out the part of the story where the head of the company took home a 40 million bonus that year on top of his regular salary, the next tier of managers recieved 10 million in bonuses, and the next tier 5 million…. the total cost of the raises if accetpted would have been 10 million…. so the company kept the employees at poverty level raises so that the money could be gathered into the hands of a very small group. The united States continues to see its middle class shring and its poverty level work force rise, at the same time that the total amount of money in the economy increases. Since the 1950s the US middle class wages are shrinking, and middkle class wages in other countries are rising. How dare the union suggest that worker should gather together and try to increase their standard of living, while the nations wealth continues to accumulate in an ever decreasing pool of people. The united states is in a race to the bottom, we are convinced that what makes a single person ultra welathy at the expense of everyone else is a good system; and yet our country declines over all. Those dang unions keep trying to stop the US from becoming the sweatshops for china…clearly we are better off by increasing the number of people in poverty so that a handful of people can have multiple homes throughout the world…. after all those people earned that money by working to get every penny they can… wait… isnt that what unions are doing? so a single person seeking to maximize there income in thetune of millions of dollars by tough negotiations and working deals for their benefit is good and should be supported becuase that is just business…. but a group of people trying to do the same thing is bad because only one person should be tough at negotaitions? - Steve - Friday, May 9, 14 @ 12:02 pm: Gee, I guess some workers aren’t going to experience the “benefits” of higher purchasing power from politicians determining wages. Just a reminder: in the market for labor WAGES ARE DETERMINED BY MARGINAL PRODUCTIVITY. I guess some capitalists don’t feel $10.35 an hour is a good rate of return for them. But, anyone out there that does go ahead and hire these workers. What’s stopping you??? If they are worth it: you pay. - Anon - Friday, May 9, 14 @ 12:04 pm: Transfer these workers to the cafeteria at the Obama Presidential Library, bump their pay to $15 an hour, provide them with pensions and include a guarantee in the appropriations legislation, if not the state constitution, so that the state will cover any gap between labor costs and revenue. That would be a win-win-win for Quinn, the workers and the soon-to-be ex-president. - Anonymous - Friday, May 9, 14 @ 12:21 pm: ==Sodexo is one of the biggest corporations in the world. They had revenues of $18.4 billion last year.== And what were there expenses and profit margin? A business who keeps open a location whose wages go up 20 percent and profit is slashed…is a business that won’t last long. - wordslinger - Friday, May 9, 14 @ 12:28 pm: –And what were there expenses and profit margin?– Do you have some information that Sodexo is closing in the Thompson because of the contract they agreed to? Are wages the only factor in business. Not like there’s some competition in the neighborhood. - Arizona Bob - Friday, May 9, 14 @ 12:29 pm: Ghost, things were different in the 60s. Executive salaries weren’t nearly as excessive as they are today. Back then, the CEOs had most of their wealth tied up in the company, and weren’t just passing though. This guy Evans put his money where his mouth was and had a vital interest in the company’s success. After they left Chicago, they became extremely prosperous, and the workers shared in the success. As with my Dad, the employees were given the opportunity to buy into the company at less than market rates. He wanted them to be stakeholders in the company’s success, and not just parasites to suck out all they could and leave. Even back then, the trades there were paid above average at Crane, and there was a bond of good faith between labor and management until that strike, that was at least partially a result of what US Steel did on the SE side. My Dad worked there for 40 years. After the war, they offered his job back to him, took a concern in his advancement, and let him move from being a gofer to a top mechanical estimator. Crane was always part of the community and the organization was like a “family” until union greed made it all go away. Unions can be a good thing, but this experience showed me that when the union “dark side” takes over, everbody loses. - Anonymous - Friday, May 9, 14 @ 12:31 pm: ==Are wages the only factor in business.== The only one? No. By far the largest one? Yes. - wordslinger - Friday, May 9, 14 @ 12:46 pm: –According to IBIS World’s cost benchmark, employee expense makes up ~24% of total sales in the United States for fast food restaurants.– - Grandson of Man - Friday, May 9, 14 @ 12:58 pm: “Unions can be a good thing, but this experience showed me that when the union “dark side” takes over, everybody loses.” I’d like to commend you on your excellent post about your dad. Any organization that gains too much power can have the potential to do great harm. These days, the wealth is going directly to the top, so we have that imbalance, which is also a dark side. Unions as a whole help redistribute that wealth to workers making less money, but as you say, there has to be balance. Still, today the unionization rate is historically low, and income inequality is historically high. I wouldn’t say there’s an exact one-to-one correlation between unions and income distribution, but evidence proves that unions are important in getting many workers better wages and benefits. I don’t see what is the point of Quinn intervening once the company leaves, but if it can be done in a way to score political points with unions, why not? After all, Rauner is doing the schmaltz with his “I’m a little country, she’s a little rock ‘n’ roll” commercials with his wife, which offer no policies or substance. Quinn will need the unions to come out for him in a big way. - Louis G. Atsaves - Friday, May 9, 14 @ 12:59 pm: I see everyone is busy changing the subject. Lots of open leases in that building. Lots of state agencies taking over space that was once leased to private companies. The building hours aren’t very conducive to clothing stores, restaurants that want to stay open until 9:00 p.m. or do weekends. Did the rents go up for the food court? Did the leases expire? Did the service contract end or get put out for new bidding? Wages were mandated to increase under a union contract so either (1) the company bailed from the site, or (2) someone else came in with a lower bid anticipating they would be non-union and thus, pay lower wages? Again, more information is needed here. I’m just asking questions here. Not speculating. - wordslinger - Friday, May 9, 14 @ 1:03 pm: –Did the rents go up for the food court? Did the leases expire? Did the service contract end or get put out for new bidding?– I was wondering the same thing. Plus, what’s the attraction of the “Great State Fare” when you’re surrounded by international fast-food brands? I’ve never gotten anything there. - Demoralized - Friday, May 9, 14 @ 1:09 pm: @Steve: This was a negotiated wage contract that was signed by both sides (at least that’s what I get from the story) so apparently they thought it was worth it. - countyline - Friday, May 9, 14 @ 1:22 pm: -The only one? No. By far the largest one? Yes.- Exactly. Labor is the single largest expense in nearly every organization, public and private. - wordslinger - Friday, May 9, 14 @ 1:36 pm: –Labor is the single largest expense in nearly every organization, public and private.– Except when it’s not. In the fast-food industry, not surprisingly, food and drink is 33% of costs, labor 24%. Profit margins are generally 10%. https://www.franchisehelp.com/industry-reports/fast-food-industry-report/ - Anonymous - Friday, May 9, 14 @ 1:52 pm: ==Profit margins are generally 10%.== Rarely are fast food and retail profit margins at or above 10%. Your own link even states that: “profit margins are often south of 10%.” A good average for a healthy PM for fast food and retailers is more like 6%. That’s with the current minimum wage. And you think you’ll be able to increase labor cost by 20% with the same number of employees and stay in business? Good luck. - Neglected stepchild - Friday, May 9, 14 @ 2:08 pm: Here’s what Quinn should do: not meddle in the private sector. A boob like him who has never made a payroll, let alone hold a real job, has no business involving himself in this. - Arthur Andersen - Friday, May 9, 14 @ 2:20 pm: Louis raises a couple good questions about the facts here which I’m also wondering. I recall that there was some recent action, maybe in court, between the State and the developer of the JRTC retail space. Don’t know if the turnover of the food court operator is related to that or coincidental. A bit of history about that space and the building may also be helpful. There was originally nearly 100,000 square feet of retail space planned on the concourse, ground and second floors. The space was “master-leased” to a developer who in turn rented the space to the various tenants. The retail mall has not been successful. When the building’s ice-making a/c system failed early on, the chocolates melted at Fannie Mae. No tenants were interested in the second floor. Operating hours and security restrictions added over time did not help. I’ve lost track of what’s going on up there currently. - Anonymous - Friday, May 9, 14 @ 2:27 pm: ====Profit margins are generally 10%.== Except when it’s not. Sodexo’s profit margin appears to be less than 3% http://finance.yahoo.com/q/ks?s=SDXAY - Just The Way It Is One - Friday, May 9, 14 @ 4:30 pm: The Guv should at least say something in avid SUPPORT of the Workers, asking the Company to reconsider its’ own choice to depart–which IS Management’s right after all (to the dismay of not only these 29 folks, but hundreds of other hard-working employees in Companies or Firms in EVERY State every DAY, sometimes in no small part due to the Rauners of the World buying and selling them off!), and maybe offering to meet with Sodexo’s top Officials, at least so PQ doesn’t make it seem like he doesn’t care about it at all…. Sorry, comments for this post are now closed.