Tufts janitors are at the bargaining table with ABM/One Source, not
Cleaning contractors were born out of drive to cut costs to the bottom line; these contractors provide their clients with a service at the least cost possible. Whenever a contractor offers a price that is above what other contractors are offering, that one company is no longer competitive and therefore loses business. The contractor has essentially no control over what they charge if they wish to stay in business. The industry dictates they charge the lowest amount possible, which means paying the janitors the lowest amount possible, or else the company will go out of business.
As shown through ABM’s recent 2007 10-K filing with the Securities and Exchange Commission, the company only made a 1.8% profit off of their total revenue. Out of all the money that this contractor took in from different cleaning contracts, less than 2% was actually considered profit. This outlines the skeleton nature of ABM. The company operates on a bare-minimum basis; they do not take away huge profits each year from their business. ABM informs their investors of the nature of their operations when they explain in their 10-K financial statement, “low cost of entry to the facility services business has led to strongly competitive markets…These strong competitive pressures could inhibit the Company’s success in bidding for profitable business and its ability to increase prices even as costs rise, thereby reducing margins.” Because they don’t take away big profits each year, they do not have the free capital to offer better compensation to their workers. This money must come from the clients.
The clients are in ultimate control of the whole cleaning process. Economically speaking, this is known as a being a price-setter, which is a market failure. In a truly competitive market, neither the buyer or seller of a service has control over the price of the service; this price is supposed to be set by the industry. Yet clients such as Tufts actually meet with cleaning contractors to decide on an appropriate price for the cleaning services. These meetings are kept separate from the workers’ contract negotiations, creating major obstacles for workers trying to achieve better compensation and benefits. In the case of Tufts, the workers’ compensation package will mostly likely already be decided before ABM and Tufts meet to renegotiate a cleaning price. By causing this disconnect, ABM cannot offer to compensate the workers better, since it does not know if it can get more money from Tufts.
This is why it is imperative to target Tufts. As Tufts is the ultimate decision-maker in how much money goes into the cleaning contract, they are the ones who actually set the janitors’ compensation. The cleaning contractor has no power in asking for more money for their workers; if they do, they will simply be replaced by a less-demanding contractor. These companies serve as scapegoats to deflect responsibility from where it should be properly placed. Yet the community has power in this matter, especially in the case of Tufts. A university that prides itself on its commitment to community (see http://www.tufts.edu/talloiresnetwork/?pid=17 and http://activecitizen.tufts.edu/?pid=1) should be held responsible by its community when it falls short of this commitment.
