On June 9, blue-chip Hyatt stockholders anxiously anticipating dividend announcements that would, perhaps, justify a nice evening on the town – maybe in one of the city’s acclaimed five-star restaurants – assembled inside the plush Hyatt Regency McCormick Place in Chicago. Protesting outside, were hotel workers who had their own concerns about how to put food on the table. Hyatt employees average less than $30,000 a year in most of the country.
Stockholders, on the other hand, had good reason to expect a nice, big slice of the pie. Hyatt shares have ballooned 50 percent since the formerly privately owned company went public in late 2009. In that deal, Pritzker family owners alone netted close to $1 billion. The cash register has been ringing ever since.
The hotel union, UNITE-HERE, reports, “as recently as March 2010, Hyatt had $1.3 billion cash on hand – on average, nearly five times as much as any other hotel company.” National hotel industry profits overall are also rebounding upwards.
The union’s Local 2 in San Francisco, for example, reports revenue growth for city hotels “projected to be 4 percent for the remainder of 2010, 12 percent in 2011 and 14 percent in 2012.” “We haven’t seen these dramatic double-digit numbers since the 1970s,” emphasized Local 2 press coordinator Riddhi Mehta.
Everyone seems to be cashing in – except employees. As a result, 400 UNITE-HERE Local 2 members in San Francisco walked off the job at the Hyatt Regency on June 8 for a three-date strike, launching an employee-endorsed boycott of the hotel.
On the picket line, union representative Tina Chen summed up the feelings of the workers “who know well that the company is making loads of money. A one-year contract we offered them last year would have kept our current health insurance, maintained our pensions and provided a modest wage increase, while still only increasing labor costs by 1.5 percent. Why do they try to squeeze us?”
This is the question that just won’t go away. Support for hotel workers is growing nationally as contracts expire in major cities like San Francisco, Chicago, Los Angeles, Vancouver and Honolulu where coordinated actions against the Hyatt were to take place the week of June 9.
Among the protesters in Chicago were 100 religious leaders who were stopped at metal detectors as they attempted to peacefully enter the stockholders’ meeting. As they vowed not to leave before speaking with a Hyatt representative, Hyatt Human Resources chief Robb Webb finally did show up.
“I applaud your interest and I applaud the concern,” Webb piously began. When questioned about the abrupt firing of 100 housekeepers in Boston (who were replaced with cheaper, outsourced labor), he reassured the clergy that it was “not consistent with the values of the company. We’re not proud about how that was handled.” However, he also reported that the difficult “business decision” was final and the workers would not be rehired. (All Webb quotes by Chicago Breaking Business reporter Julie Wernau.)
Trifecta of Power, Money and Greed
The Hyatt Hotel Corporation boasts a portfolio of 434 properties in 45 countries. It is a formidable entity as is its major shareholder, the billionaire Pritzker family of Chicago. The Pritzkers are not only extremely wealthy – having been listed on Forbes’ “America’s Richest Families” since it originated in 1982 – but they are also quite good at buying influence.
Penny Pritzker conveniently became national finance chair of the Obama presidential campaign shortly after family business interests suffered a major public embarrassment. Superior Bank, a lender chaired by Pritzker, collapsed in 2001, causing millions in losses to the government and depositors.
For years, Superior reported profits and paid its owners dividends of nearly $200 million “without regard to the deteriorating” condition of the bank, according to a 2002 report by the Federal Deposit Insurance Corporation (FDIC).
Cozying up to Obama was one of a series of calculated moves to repair the family’s damaged personal reputation and to cultivate a “Mad Men,” carefully crafted image of social concern. For example, the Pritzker Foundation recently made a $10 million, tax-deductible donation to Stanford University “to create a scholarship fund dedicated to supporting Chicago students with the greatest financial need.”
There is evidence that this apparent generosity is self-serving pretense – or public relations “investment.” Simultaneously, the Pritzkers continually cut staff and increase workloads at their hotels. As a result, the Hyatt had the highest reported rate of injury in 2009 for housekeepers in an academic study of 50 major hotels as reported by the progressive blog Firedoglake.
Despite this long record of financial malfeasance and labor hostility, President Obama continues to cast Pritzker in the unlikely role as advocate for American working families as well as financial adviser to the Obama presidential campaign. Predictably, “penny-pinching” Pritzker joined with other billionaires on the Economic Recovery Advisory Board to oppose the Employee Free Choice Act – legislation which would allow millions of workers to select a union free from well-documented patterns of employer harassment.
No Easy Settlement Expected
The Pritzkers value their treasured personal bank accounts, but also power. They seek the power to limit employee expectations now and into the future, a power that assures owners a growing share of corporate revenues at the expense of workers, over the long term.
On the other hand, a fair agreement at the Hyatt would allow Local 2 to keep the best contract in the industry intact while setting standards for other hotels with expired contracts as well.
“Power never takes a back step – only in the face of more power,” argued Malcolm X. This is one such contest, between two very determined forces, one with the solid support of the workers and a growing list of community allies, the other with the entrenched influence of wealth.
Facing down the Pritzkers, hotel workers in five cities made a show of force last week against the third-largest hotel chain in the country. These actions mark an important, strategic escalation.
Clearly, this will not be the last strike, protest and boycott if hotels continue stalling negotiations. More nationally coordinated actions will certainly develop as contracts for around 50,000 hotel workers expire soon in major cities across the country.
The towering San Francisco Hyatt Regency sits on the edge of the famed bay waterfront where police and long shore strikers battled during the 1934 victorious general strike. Today, there is a plaque nearby honoring martyred picketers Nicolas Bordoise and Howard Sperry, who were felled.
Working-class cafes and lunch spots have long ago been replaced by elite shops and fancy bistros shaded by magnificent, imported, palm trees lining the entire length of the city’s grand waterfront traffic lanes overlooking the bay.
While times and San Francisco’s character change, the hotel workers’ actions today hearken back to the very best traditions of this historic district and herald dramatic showdowns that lie ahead in this great city and across the country.