Schools and Communities Lose By Outsourcing Lunch Services

Huck/Konopacki Labor Cartoons

Public schools get about $1 billion worth of free surplus fruits, vegetables, meat and cheese from the USDA each year which, instead of preparing into healthy fresh meals, they outsource to large corporate food processors like Aramark and Sodexo. The “logic” of this system is that it is supposed to save schools money on labor costs and economies of scale. In reality, schools do not save money in this scam, according to Lucy Komisar, when the fees charged by the food processors and supply costs are factored in.

Komisar notes that roughly one-fourth of the school nutrition program has been privatized and outsourced, primarily to just a few food giants, like Sodexo, Aramark, Chartwells, Tyson and Pilgrim’s. Of the $1 billion in free surplus foods given to schools each year, close to half is sent out for processing (a 50% increase since 2006) to make things like chicken nuggets, tater tots and pizza. Yet, instead of saving money, schools are paying kickbacks and other fees to these companies and getting little more than junk food in return.

Komisar points to research by Roland Zulio, from the University of Michigan, who found that the amount of money Michigan schools spent on fees and supplies for this service was roughly equal to the amount they saved on labor and food costs, yielding no net savings for the schools. If one adds in the “external” costs, like the particulate air pollution and extra carbon added to the atmosphere caused by trucking these foods long distances, or the unionized local chef jobs lost to outsourced non-union corporate assembly lines, school lunches are a serious rip-off.

In his research, Zulio specifically noted that Chartwells (though this is likely true for the other processors, as well) was able to cut costs by slashing benefits for workers, but that these savings were not passed on to schools. He also discovered a correlation between low test scores and the degree to which school lunches were privatized, speculating that perhaps the excess fat, salt and sugar were impairing student achievement. However, it is also possible that low income schools are relying more heavily on food outsourcing than affluent schools and that the low test scores are due more to students’ socioeconomic backgrounds than their school lunches.

By outsourcing their food, fresh and wholesome ingredients are transformed into foods with the “same nutritional value as junk foods,” according to a report by the Robert Wood Johnson Foundation (RWF). The RWJ report found that over 50% of commodity foods are sent to processors first, where fat, sugar and sodium are added before being sent back to schools. In California, the report notes, over 82% of commodity food funds are spent on meat and cheese whereas only 13% is spent on fruits and vegetables.

While the RWJ report is a little old (2008) and things may have changed slightly in California and the nation as a whole, the fact remains that the bulk of school lunches do get heavily processed and outsourced to food giants like Aramark and Sodexo, making the foods less healthy while providing schools with no economic benefit.

We Want Jobs? Not If We Can’t Feed Ourselves!

Cooks Lining Up For Soup (from Flickr, gamillos)

Liberal politicians and union leaders seem to think that if they could just create more jobs, the economy would suddenly recover and everyone would be happy. Of course those who are unemployed, particularly the long-term unemployed, are desperate for some financial security and relief, and jobs seem like the simplest way to appease them.

While the absence of work is a terrible burden on families, the presence of work is not necessarily their salvation, and shouldn’t be their primary goal. Workers need material security, safer and better working conditions, better living standards, more leisure time and sufficient wealth to enjoy it.

Most jobs do not provide these things. In fact, many jobs do not even provide material security.

According to a recent report in Labor Notes, 28% of cooks live in food-insecure homes. In other words, more than a quarter of the people who prepare our food in restaurants, fast food chains and cafeterias do not earn enough to feed themselves and their families. Campus food workers, for example, had a median wage of only $17,176 in 2010, while many farmworkers are earning the exact same wages they made ten years ago.

There have been organizing drives among food workers at numerous college campuses over the past decade, most notably among employees of Sodexo (See here and here). These efforts still have a long way to go. At Pomona College, for example, 90% of kitchen staffers signed a petition for union recognition in 2010, but the college ignored it. Employees there were being fired for taking sick days and many are still earning less than $12 per hour, even after working there for 20 years.

What is most compelling about the statistic that 28% of all cooks go hungry on a regular basis is that it clearly reveals that food is not a human right, but a commodity that is produced by members of the 99% for the profit of the 1%.

In a sane society, a cook would not only be able to eat on the job and take food home from work for his or her family, but would be paid well enough to eat healthy, organic, locally produced food every day, go out to nice restaurants occasionally, and take time off to relax with family and friends. But they cannot do this because the food belongs to the bosses. The equipment to prepare the food belongs to the bosses. The buildings were the food is produced belong to the bosses. The right to hire and fire and set wages and working hours all belong to the bosses. And if they challenge any of this they will be unemployed quicker than they can say Sodexo.

This is not to say that workers should roll over and accept these conditions. A strong trade union can help to improve wages and decrease food insecurity for workers. However, trade unions cannot end workers’ dependency and subservience to their bosses, nor do they wish to. Their entire existence is predicated on the subservient relationship between workers and bosses. They act as the intermediary or advocate for the workers in an attempt to mitigate this relationship and make it as painless as possible for their members. They accept the premise that the boss is entitled to own and control every aspect of the workplace and become wealthy by paying their members less than the value of the goods and services they produce.

While the pain can be mitigated, workers will never truly be free, nor will they ever earn the true value of their labor, as long as the workplace remains in the control of bosses. Workers will continue to be forced to accept compromises, including declining wages and increasing work, just so they have any income at all. They will always face the dilemma of accepting abuses and degradations or risk being fired. Even when they earn enough to eat every day, they can rarely (if ever) eat as well as the 1%.

Thus, it is insufficient to demand jobs or even better jobs. We must also fight for a world without bosses and wage slavery, in which everyone has material security and access to the good things in life, leisure time, and the opportunity to contribute to society under their own volition and not under the boot of the 1%.

SEIU Cuts Secret Deal With Sodexo

The cafeteria concession giant Sodexo is infamous for union busting, paying low wages and abusing its workers throughout the world. In the U.S., the company has 120,000 employees, only 18,000 of whom belong to unions.

The SEIU is infamous for selling out its members and orchestrating petty turf wars with other unions. It has also been engaged in a long-running campaign against Sodexo to increase union representation and resist the company’s sweat shop conditions.

Sodexo sued SEIU under RICO (the Racketeering Influenced and Corrupt Organizations law originally written to bust organized crime), threatening the union and its top officials with millions of dollars in penalties, a risk none of the big unions are willing to take, even if it means abandoning workers to the whims of the bosses.

Thus, the SEIU cut a deal, a secret deal which they are calling amicable, which simply means they agreed to it willingly. What it means for Sodexo’s workers, and the future of organizing at the company, remain to be seen.

To read more, see Labor Notes: “SEIU Settles Sodexo’s Racketeering Suit, with Organizing Gains Uncertain.”

Modern School Anniversary: No Capitalist Left Behind (Still)

One year ago today, I launched the Modern School blog with a piece titled No Capitalist Left Behind. A lot has happened in that year. The attacks on teachers, unions and public sector workers have escalated and school budgets have shrunk. But No Child Left Behind remains the law of the land, albeit with the possibility of waivers for those states willing to drink the Obama Koolaid. 

One thing that has not changed is the desire by business leaders to come up with clever new ways to profit off the public education system. This was really the thesis of No Capitalist Left Behind. And while some of the specifics have changed, much of what I wrote a year ago today still applies.

So, in honor of the one-year anniversary of Modern School, I present to you again, No Capitalist Left Behind:

On August 2, 2010, the California Board of Education approved Common Core Standards (CCS), aligning our standards with 33 other states. The vote barely beat a deadline to adopt CCS or lose federal “Race to the Top” (RTTT) funds worth $700 million. On the surface it seemed like a smart move: reform education and win much needed funds. In reality, the plan weakened education in California, as we already had some of the toughest standards in the nation. Furthermore, implementation of CCS is expected to cost taxpayers $1.6 billion for new textbooks, according to EdSource, an independent, non-partisan education research group.

So why would the Board of Education commit tax payers to $1.6 billion in order to dumb down our schools? The math makes no sense for kids or taxpayers, but it does make sense for the big education publishing houses that have been lobbying hard for the adoption of CCS across the country. While CCS currently only covers math and reading, these two subjects account for over 70% of the textbook market. According to The Education Business Blog, the Common Core will drive text book sales in coming years. “Common Core Standards (CCS) will have a profound impact on the instructional materials market. The big players like Pearson and McGraw-Hill are on-board as endorsing partners. . .” Pearson had a 46% jump in profits in 2009 ($648 million) due in part to the adoption of CCS by other states.

CCS is just the tip of the iceberg in terms of corporate educational plunder. In nearly ten years, No Child Left Behind (NCLB) has funneled approximately $250 billion to textbook and test publishers, says Jerry Herman, director of Stifel, Nicolaus & Co. Inc., a St. Louis-based investment firm. In addition to publishers, many other private, for-profit businesses have used NCLB to take tax dollars earmarked for public education. For example, every school that fails to make Adequate Yearly Progress (AYP) for three years in a row must offer Supplemental Educational Services (SES), such as tutoring and after school support programs. Most schools lack the funding to provide these services directly and subcontract out to private SES providers, a taxpayer giveaway worth $2 billion a year to tutoring companies, according to Corey Murray, of eSchool News. In the mad scramble to take advantage of this federal handout, education researcher Gerald Bracey reported that Newton Learning, a Supplemental Services provider, recruited students by offering free VISA gift cards. Platform Learning, which handed out free Walkmans, saw their enrollment jump from 12,000, in 2003-2004, to 50,000, in 2004-2005.

After four years of failure under No Child Left Behind, schools must restructure by replacing teachers, implementing new curricula, appointing outside experts, or converting to a charter school. Many charter schools (including nonprofit charter schools) subcontract to for-profit Educational Management Organizations (EMOs). In 2001-2002, when NCLB began, there were only 36 EMOs operating in the U.S., managing 368 schools. By 2008-2009, there were 95 EMOs, managing 733 schools. EMOs operate using public school funding, but they spend considerably less on instruction and student services than traditional public schools and keep the difference as profit. Imagine Schools, Inc. the nation’s largest for-profit EMO, spends only 40-45% of its revenues on classroom instruction, including teacher salaries, according to Policy Matters Ohio. They also earn money by flipping real estate and charging high rents to their schools. In general, charter schools perform no better than traditional public schools and tend to be far more segregated. They also tend operate with less local oversight than traditional public schools hire non-unionized teachers.

Advocates of NCLB believe that its strict regimen of testing and sanctions increases accountability and forces schools to improve, and see no harm if some businesses make a profit in the process. Some supporters argue that it is precisely the competition for profits by the education industry that creates the better quality education. The problem is that NCLB has not improved education. Instead, it has set schools up for failure. Failure is built into NCLB’s design. Under NCLB rules, all subgroups (e.g., gender, ethnicity, socioeconomic status, special education status, English Language status) must meet their group’s Adequate Yearly Progress goals. If one subgroup fails, the entire school is deemed a failure and faces sanctions, even if other subgroups improve. AYP is also a moving target. If scores go up at one school, but improve even more at another, the first school may be still be punished. As a result, NCLB has created a growing market of failing schools and districts, a virtual gravy train for textbook publishers, private tutoring services, and EMOs. According to the Public Policy Forum, nearly every school in California will be failing by 2014. Even Minnesota, one of the country’s top scoring states, is expecting 80% of its schools to fail by 2014.

Rather than abolishing or reforming NCLB, the Obama administration has embraced it and hastened the transfer of wealth from tax payers to business through Race to the Top, which requires states to adopt Common Core Standards, ease restrictions on charter schools and adopt merit pay for teachers in order to be eligible for limited federal grants. With most states struggling under staggering deficits, this is like tossing crumbs into a crowd of starving people. Governors and many teachers unions are tripping over each other to meet the demands of RTTT in hopes of winning one of the limited competitive grants, despite the devastating costs to kids, taxpayers and teachers. Indeed, all states that have won RTTT grants have had some support and collaboration by their unions. While the California Teachers Association has consistently opposed merit pay and RTTT, they did jump onboard the Common Core bandwagon.

Arne Duncan, Obama’s Education Secretary and architect of Race to the Top, has called himself a “portfolio manager” of schools. When he was CEO of Chicago Public Schools he claimed, "We're trying to blur the lines between the public and the private." Not surprisingly, the district failed to meet its AYP from 2004 to 2008, though he did manage to convert many underperforming schools into profitable charter schools through an initiative called Renaissance 2010, which was supported by the Commercial Club of Chicago, representing many of the city’s biggest businesses. Most of the new charter schools eliminated the teachers union. (Duncan has accused unions of hindering business-led reform.) Many were run as military academies and most of these were located in low income neighborhoods. Expulsion rates also skyrocketed with Duncan at the helm.

The California legislature has cut $17 billion from education over the past two years, while the state has failed to win any RTTT grants. Parents and community groups that want to help their struggling schools by having bake sales may be out of luck, as many school districts have signed contracts with food management companies giving them monopoly control over food concessions and banning any type of competitive food sales, including bake sales and all food-based fundraising by students. Twenty-five percent of all public schools nation-wide have out-sourced their cafeteria concessions to food management giants like Aramark, Sodexo and Compass. Sodexo, alone, earns profits of over one billion dollars per year, though some of this comes from their hospital, hotel and military catering services. Some districts even guarantee profits to these companies, promising to pay the difference if food sales do not meet expectations. There are about 29 million children nation-wide who participate in the National School Lunch Program, at a total cost to tax-payers of $6 billion per year. An audit by the USDA in 2007 found that the National School Lunch Program was paying hundreds of thousands of dollars more than it should because these companies kept “kickbacks” from the vendors, many of whom are commodity food giants themselves (e.g., Tyson, Kelloggs, Coke).

The federal government gives $6 billion a year to schools for the free lunch program and they provide 1 billion pounds of surplus food to schools through the federal commodity food program. This includes flour, raw meat, fresh and frozen fruits and vegetables and dairy products. Because school budgets are so low, many districts can no longer afford to hire cooks to prepare this food. The feds have provided schools with a way out of this bind known as Commodity Processing, which allows schools to divert their government cheese to processed food manufacturers who produce pizzas, hamburgers, chicken nuggets and fish sticks to resell back to the schools. According to the USDA, thirty percent of federal commodity food is diverted in this way.

Those who were counting on Michelle Obama’s Let’s Move! campaign to replace corporate junk food in schools with locally produced, sustainable, healthy foods will be disappointed to learn that she has partnered with many of the nation’s largest producers of processed foods. Let’s Move! recently got a letter of support from the Grocery Manufacturers Association (GMA), which represents more than 300 commodity processed food manufacturers. The Healthy Weight Commitment Foundation (members include Kellogg, Pepsico, Mars, Nestle, Hershey, Sara Lee, Unilever and Coca-cola) has also signed on as a supporter. The First Lady has argued that it would be impossible to feed America’s children without the help of processed food giants. Her views may have been influenced by her term on the board of directors of Tree House Foods, which produces jams, jellies, pickles, salad dressings, pie fillings and other processed foods for the food service industry. In exchange for her two years of service, the First Lady earned over $140,000 in stock options and close to $100,000 in salary.

Most of the important developments in education policy over the past twelve years have had the effect of transferring tax dollars away from public schools and into the pockets of private, for-profit corporations, yet there is no evidence that schools have improved in the process. A class-based achievement gap persists. Growing numbers of schools are failing under No Child Left Behind. The quality and safety of school lunches has deteriorated. Indeed, two years ago a supplier for the federal lunch program was discovered selling meat from “downer” cows. Teachers are losing benefits and pay as more and more get pushed into nonunionized charter schools. Nurses, librarians and other essential support personnel are being eliminated to help make up for budget shortfalls, while increasing portions of our dwindling education budget get skimmed off the top to cover the profits of the private education industry.

Sodexo Wins Sweetheart Contract with Northwestern University Food Service Workers

The French cafeteria and food concession giant, Sodexo, infamous for abusing workers here and abroad, has just reached a contractual agreement with food service workers at Northwestern University's dining halls and Norris University Center food court. The new contract includes reduced and free health care and a minimum $10 wage, according to the Daily North Western.

The university said it was pleased with the contract, which should be no surprise, considering that a minimum wage of $10 per hour is a poverty wage, not much higher than the national minimum wage of $7.25, and about as low as any employer could hope to legally achieve. Though Northwestern is not a party to the agreement, which is between Sodexo and their employees, the university contracts their food services to Sodexo and benefits from the low wages since lower wages allow Sodexo to offer cheaper services to the university.

According to the new contract, wages will be incrementally increased over four years, eventually reaching a “living wage” of $10 per hour for all workers currently making less than this. The health benefits are expected to significantly reduce the costs of health care for employees, which increase their take home pay.

The biggest gains will be for the lowest paid employees. This has angered some of the higher paid employees, who feel the new contract doesn’t do much for them. The final vote was 118-18 in favor of the new contract, with several workers abstaining and several others not being given long enough breaks to vote.

Ultimately, if $10 per hour is an improvement for workers, the new contract could be seen as a step forward. However, contrary to the glowing statements from union officials, this can hardly be seen as a “significant victory,” as $10 per hour is nowhere near sufficient for a family of four or even a single individual to live comfortably and securely in this society. It is not even close to the union’s initial demand of $13.23, which the Living Wage Committee calculated as the living wage for Sodexo workers at Northwestern. If anything, $10 per hour should be seen as a significant concession to the bosses.

Considering that Sodexo CEOs are earning 7 figure salaries and the company grosses billions of dollars each year, $10 per hour seems like a pretty low salary. On the other hand, how else could the company earn so much without squeezing its employees as tightly as possible?