Bad Calls

I found this story interesting about how the a boys' basketball team from a Jewish day school in Texas will have to forego its earned-berth in the state finals tourney of the Texas Association of Private and Parochial Schools ("TAPP"). The Director of TAPP - an association of religious schools, mind you - did not sound particularly convincing to me when he said, "If the schools are just going to arrange their own schedule, why do we even set a tournament?" But I found the spirit of the team - as described by their coach and a dad - quite refreshing. As the coach said, "We have a pretty mature group of guys . . . They knew this could happen down the road.” According to the dad, "It’s disappointing, . . . I think the kids will be disappointed, too, but the team has this attitude of when there are bad calls, you just move on."

Digging a little further, I see that the Beren Academy's situation stems directly from the fact that the Jewish Sabbath falls on different days from the Christian Sabbath. According to this Houston Chronicle article, "Neither TAPPS nor UIL teams are allowed to play any sports on Sundays, when Christians traditionally worship." (UIL appears to be another Texas-based athletic conference.)

Is this a case of some kind of religious discrimination? The coach/athletic director says no (not altogether convincingly, though): "I don't think it has anything to do with our school being Jewish . . . We were well aware it could come to this. But one thing that gave us hope that our game time might be changed was a Seventh Day Adventist school had games rescheduled in a TAPPS state soccer tournament a few years ago." (Click here for full article.). Even the Anti-Defamation League is exercising diplomacy: "ADL recognizes that many of the private and parochial schools with TAPPS membership are faith-based institutions where religion is an extremely significant part of the education process and the lives of students who attend. . . . We are hopeful the leadership of TAPPS will keep that in mind when making a decision about Beren Academy’s request ....” (full press release here)

I am definitely not a sufficiently informed observer to attempt to draw any conclusions here about basketball and religion in Texas (or anywhere for that matter.)

But I can tell you that I appreciate how the lesson the team draws from this is not to cry foul, but to move on after a bad call.

Big News on Craft Foods

(Yes, Google, that's "craft" with a C, thank you very much.)

First, here's an interesting article on this topic.  Just a couple of weeks after I posted on small, artisan foods, Adam Davidson of Planet Money wrote an article for the New York Times on artisan, craft foods.  "Don't Mock the Artisanal-Pickle Makers," it's called.  Davidson says, "Contrary to popular belief, the revival of craft manufacturing isn’t just a fad for Brooklyn hipsters," and describes how some artisan food craftmen are able to scale up and run a healthy American manufacturing business.  Davidson makes a compelling case that "craft business is showing how American manufacturing can compete in the global economy."  Specifically, craft businesses avoid "direct competition with low-cost commodity producers in low-wage nations" and instead, create "customized products for less price-sensitive customers."  This is a very hopeful article, and I like economic optimism.

Second, my big artisan food news is that my husband and I have decided to try our hand at becoming "artisanal food craftsmen" ourselves!  We have just launched a new company, Flying Granola - as you can learn in my other blog, http://flyinggranola.blogspot.com/ - and hopefully we will be making our debut at a local craft/food fair sometime this spring.  Stay tuned!

And bringing it all together, here's a link to the story of Bear Naked Granola.  Personally I just like to cook, eat, and feed others, but certain other founders of Flying Granola are very inspired by success stories like this.  Success in this case being 0 to 60 - that is, $60 million - in less than six years. 

The Promised Stella D'Oro Strike Post

I am writing this blog entry, in its entirety, for the second time. After Sunday's post on deep practice, making mistakes and correcting them, you may think that I am successfully pushing myself to self-critique and revise. But no, it’s a simple case of a computer glitch losing an hour’s worth of work and – after a bit of rage, glass of wine, and good night’s sleep – forcing me to do the whole thing over again. After that post, however, I can only conclude that this was a sign that I should in fact push myself to rework and revise, and improve upon the prior version. You’ll have to take my word on the improvement part.

I promised a blog on last week’s New Yorker article, Out of the Bronx: Private Equity and the Cookie Factory, by Ian Frazier (subscription required). And as promised, I read the NLRB decision in the labor dispute, available here (.pdf). After the initial blog crash, I found some more sources - a radio interview with the striking employees, for example. (As it turns out, there is also a documentary about the strike, "No Contract, No Cookies," which I'll admit to not having seen. HBO subscription required for this one.)

And I find that the more I learn, the more questions I have.

Let me begin with a brief synopsis. Stella D'Oro began as a family-owned business in Bronx, and during that era, the employees became represented by the Bakery, Confecionary, Tobacco Workers and Grain Millers International, Local 50. At some point the family sold the business to Nabisco, which in turn sold to Kraft, which, in 2006, sold to a private equity fund, Brynwood Partners. Brynwood purchased in the middle of the term of a collective bargaining agreement, and the labor dispute arose during neogtiations for a successor contract. During those negotiations, Brynwood told the Union and employees that it needed wage and benefit concessions because the business was not profitable and, without concessions, it would have no alternative but to close down. After months of negotiating without agreement, on August 14, 2008, the employees decided to go on strike. They offered to return more than seven months later, on May 1, 2009, but Stella refused to take them back. Two months later, on June 30, 2009, an NLRB administrative law judge found for the Union (on the NLRB General Counsel's complaint), holding that Stella had violated federal labor law and was required to take the employees back to work.

This fleeting victory ends the success part of the story, for the employees. The bad part came just three months later, when Brynwood announced on September 8 that it had sold the business to another corporate bakery, Lance, Inc. Exactly one month later, the Stella plant in the Bronx closed for good. Lance moved the Stella product line to one of its factories in Ohio, and the 130-plus employees in the Bronx received a severance of one week's pay for each year of service, and set off to look for new work.

Actually, there was one more success. On August 27, 2010, the National Labor Relations Board affirmed the decision of the administrative law judge. Of course, by this point another legal feather in the cap wasn't good for very much. The legal battles, and victories, do not touch on Brynwood's decision to sell Stella, or Lance's decision to move the work to Ohio, and they can't bring the work back to the Bronx. In fact, (unless I'm missing something, a lawyerly caveat) the best that the employees can hope for as a result of the Board's decision (which is currently on appeal to the Second Circuit) is backpay giving them the wages they should have earned from the date of their offer to return from the strike on May 1, 2009, until the time when the employer shut down the business five months later.  That is, five-month's wages is the all that is still at stake here, as far as I can tell.

The New Yorker article seems to contemplate whether the decision to strike was a good one.  Frazier notes that two years later, "most" of the employees have either retired or "are still looking for new jobs."  (The employees on the radio show reported that about 25 of their coworkers, out of 130, had found new jobs.)  He goes on to muse that the Stella D'Oro strike seems "similar" to Occupy Wall Street (of which strike leader Mike Filippou is a supporter, he tells us) because both are "not about specific demands but about inequality."

This caught my attention, and I'm wondering if Frazier is correct, or if he is idealizing the Stella strike.  Or is it possible that there was a hint of idealism among the strikers themselves?  And if there was, is that a bad thing?

Hearing about the events, with the benefit of hindsight, it is nearly impossible to avoid concluding that the strike was the wrong choice - and I am trying to avoid viewing this entirely through the 20/20 lense of hindsight. I am reminded of the guiding image in the excellent new book by Joe McCartin (my former professor, I'm proud to report), Collision Course: Ronald Reagan, the Air Traffic Controllers and the Strike that Changed America. McCartin uses this image of a "collision course" to describe the unfortunate trajectories of the union's and employer's positions, showing how the conflict between the union and the Reagan administration ultimately led, first to a massive strike, and then, to breaking the union and a loss for the labor movement as a whole.  Though I am admittedly simplifying, this image comes to mind here.

Here, the employees were justifiably angered and motivated by what they viewed as the private equity firm's greed.  I was struck listening to employees Filippou and George Kassai  in the WNYC interview by how they so proudly discuss their years of commitment to the company and its product, and accuse the company of making inferior cookies after its cost cutting. In the negotiations, Filippou appeared to understand Brynwood's calculus: he remarked that the employees knew that the employer could just close the facility, sell the brand and real estate, and make a profit in the process, or it could obtain the concessions it was requesting and then still sell the company, but at an even greater profit.  355 NLRB No. 158 at 21.  The employees clearly understood that Brynwood could sell the company at any time, but as I understand it, this paradoxically seemed to fuel their motivation to fight the company.

While the employer's perceived greed, the principle of fighting "inequality" (a la Occupy Wall Street), seemed to motivate the employees through the eight-month strike, the truth of this perception was ultimately their undoing. Filippou was correct that Brynwood could sell at any time and, indeed they did.

So what were the employees to do? Is the takeaway from the Stella story that every time employees go up against a private equity fund, the employees have to capitulate to whatever demands the employers makes of them?

This New York Times article looking at labor and private equity suggests - thankfully - that employees have had better outcomes in other cases.  As best as I can tell from the Union website, the U.S. Foods strike profiled in the article resulted in a new contract in December 2011. These employees were fighting none other than the king of private equity firms, Kohlberg Kravis Roberts. The Times article also mentions a victory by employees when Hugo Boss "reversed a decision to close a factory in Ohio after succumbing to an aggressive union-led campaign."  The union, Workers United, gives credit for bringing Hugo back to the bargaining table to the findings of a NLRB regional investigation; the business press remarks that Ohio's pension fund threatened to pull the €110 millon it had invested with the private equity owner. I'll refrain from drawing conclusions from my two sentences of research, but this certainly suggests that the battle of labor against private equity must be, at the very least, fought on many fronts. 

Rather than conclude with some sense of undeserved authority, let me instead share the questions that remain in my mind: what lessons can the labor movement (such as it is) take from the Stella battle? Do the Stella employees in fact regret their decision to go on strike? What would they have done differently? Was there any way to predict, at the time, the course of events that would unfold? Do private equity-owned-employers require a different calculus than typical employers for the employees and unions that try to stand up to them?

How the Lower East Side Began Shrinking...52 Years Ago Today

East Village blog EV Grieve, has an interesting post today highlighting a 52-year old New York Times Article that they claim contains the first mention (according to the research of someone named "Pinhead") of the "East Village." Apparently this area, between Houston and 14th Street, 3rd Ave. and the East River, came into existance as the 3rd Avenue El came down and the Village exapanded east (the "Village atmosphere" came to this area in "tiny, scattered islands of Bohemia" according to my favorite sentence).

For myself and other Lower East Siders, our particular angle on this - oh, and how different we are from the East Villagers! - is to note that this new term apparently changed an area that had been part of our territory to this newly-named area. The article refers to the area as the "Lower East Side" - and then goes on to say that it is now referred to as the "East Village."

And who named it "East Village"? I'll give you two guesses. . . .and it was not the bohemians themselves.

That's right, it was the "rental agents", as always. (The same people who now want to call the area north of the East Village "NoEVil" - no joke.) Apparently 50 years ago, people thought that the "Lower East Side" was "a slum area without comfort or prestige." (The horror!)

And there you have it. Realtors, money, gentrification: the East Village was born, and the Lower East Side shrunk.

why i'm here, part 2, and how you, dear reader, can help

One of my motivations for writing a blog was to practice. To practice writing, to practice thinking analytically, to practice everything that goes into thinking about economics, society, law. The idea that these are things that require practice was planted in my mind by a book I read a few years ago, The Talent Code, by Daniel Coyle. Coyle makes the argument that what we think of as "talent" is actually the result of "deep practice". The first premise is that talent is not innate, but the product of many, many hours of practice. (An example that sticks in my mind, I believe from his book thought I don't have it in front of me, is that while we think of Tiger Woods as a golfing prodigy, he learned the game at such a young age - two - that by the time he became the youngest winner of a major, he had already been playing seriously for twenty years. These numbers are from wikipedia.)

The next point Coyle makes, as set forth in the first chapter, which you can read here, is that acheiving this kind of success requires "deep practice." Deep practice, he writes, "is built on a paradox: struggling in certain targeted way -- operating at the edge of your ability, where you make mistakes -- makes you smarter. . . . Experiences where you're forced to slow down, make errors, and correct them . . . end up making you swift and graceful without your realizing it." (p. 18). (The book, and website, go on to theorize that deep practice actually changes the structure of the brain, theories which are important and fascinating but I won't go into here.)

In that sense, I can say that this blog is a kind of "deep practice." If I have any glimmer of hope of one day writing about, say, economics and society, it won't be sufficient to simply read and think about economics and society. Listening to Planet Money and reading The New Yorker may give me some benefit, but it is not deep enough practice. Only by forcing myself to articulate my thoughts and make sure they sound coherent (and remotely interesting) will I be engaged in anything resembling the type of deep practice that Coyle says is necessary to achieve success.

To that end, each of these blog posts requires finding the delicate balance between achieving the most practiced, revised, reworked, close-to-perfect post I can create, and achieving, well, a Blog, composed of published posts. For each post I am going to try to push myself to "the edge of my ability", where I might make mistakes and have to think through difficult arguments or transitions or analyses. But eventually I'm going to hit that "Publish" button, and after that time, Dear Reader, I am going to need you to give me feedback on how I might finetune my writing and thinking the next time around.

And on that note, I'm hitting "Publish"....