Shifting the balance of power in hotels

July 2019 Hotel

Hotel workers picket in Stamford, Conn. (Photo courtesy Hospitality Workers Local 2170

By ERNIE GOTTA and ERWIN FREED

— STAMFORD, Conn. — Like any capitalist enterprise, hotel companies hate losing profit margins to benefit the workers who make them rich. Industry professionals debate about the type of model they need to make the most profit. Currently, hotels in the Stamford area are running on very lean models.

Sebastian Georgiana, a front desk agent at the newly unionized Sheraton Stamford, said, “For the most part our hotel is run with less and less staff. Supervisors and managers often do our work to save the hotel money. It’s one of the reasons we voted to join the hospitality workers union Local 217. In the non-union hotels the situation is much worse.”

Hotel owners know that in the end there is a zero-sum trade-off between their receiving the biggest pay-offs for their investments and workers’ taking home enough money to live. Even though the managers at every opportunity promote the idea that the hotel is a “family,” they really only care about their profits and do not blush about slashing hours to the bare minimum.

Company strategies

Obscuring the definitions of job classifications is one way that employers squeeze profits out of hotel workers. Lupita Agrado, a 20-year banquet server and union steward at the Hilton Hotel in Stamford, said, “Before we formed the union the kitchen managers pushed cook’s work onto banquet servers, giving fewer hours to cooks and more work for servers. Cooks are paid more hourly than servers, so it benefits the company to schedule fewer cooks and pass that work on to me and my coworkers. Now, as shop stewards, we are working hard to enforce our first contract, but it’s not easy.”

At the Sheraton, workers are now fighting for their first contract, but before voting to join Local 217 workers were often made to staff positions other than their own, regularly taking on two or more different jobs in the same shift. This allowed the bosses to hire fewer people and cut hours for positions like the café. By keeping a skeleton staff that is worked to the bone, they save a lot of money on labor costs, but at the same time the hotel cannot maintain a high level of customer service. Management proves again and again that they prioritize profits over guest satisfaction.

Another strategy to save costs is “flexible scheduling.” At non-union hotels this can take on many different forms including cancelling shifts with little to no notice, cutting the length of shifts, and giving inconsistent and/or irregular hours. All of these methods are helped along by having salaried managers do work that would be in the bargaining unit if the hotel were union.

Speed-ups, “smart staffing,” and Marxism

Capitalists, both individually and as a class, make their profits from the amount of revenue they take in that is greater than what they pay to workers’ wages and benefits. These profits are used to pay debts and interests to stockholders, rents, and, crucially, expand production. The fact that profits are generated by unpaid labor of workers is at the core of Marx’s theory of capitalist exploitation, also known as the labor theory of value.

There is a common confusion about the Marxist theory of capitalist production, which is that surplus value is only generated by creating material items as commodities. Under this view, service work is not “productive” in the Marxist sense because it does not necessarily create a single item, like a coat or a shoe.

However, Karl Marx was very clear that this is not the case, stating in the first volume of “Capital,” “An actor, for example, or even a clown, according to this definition, is a productive laborer if he works in the service of a capitalist (an entrepreneur) to whom he returns more labor than he receives from him in the form of wages …” In hotels, the commodity provided is a room cleaned and functioning to certain industry standards, sometimes with amenities like room service, which can be accessed via exchange of money for a room key.

In general, the capitalists’ revenue is realized with a definite pace, given a particular number of check-ins with more or less the same check-out time. The rate of turnover is relatively constant. The price of individual hotel rooms is decided by competition around a common market-level over the medium term.

Hence there is a more-or-less understood amount of money that falls into the hands of the hotel’s owners over a period of time. This money needs to be divided into various categories, the most important for us being that of the wage rate. While capitalists may choose to neglect maintenance of their means of production, for example, going past the normal amount of time to renovate a property, the main avenue towards “cost savings” available to the bosses is squeezing every bit of labor out of their existing workforce.

Marx pointed to two main ways that capitalists get more work from the same amount of people. These are “absolute” and “relative” surplus value extraction. Increasing absolute surplus value is accomplished by extending the working day. This method will fall into play more often when the hotel or department is understaffed. It is cheaper to pay time-and-a-half for overtime than to pay two workers making the same wage. Increasing relative surplus value is accomplished by giving a worker more work within the same amount of time in a working day. Tactics in this department include the aforementioned cross-training, workplace discipline like banning cell phones on the job, and busy work.

Without its own organizations, labor is totally at the mercy of capital in regards to how the working day is set-up. Due to competition between capitalists and the relative similarity between fixed capital costs in a given industry, the main mechanism that the individual capitalist has to gain an advantage against its competitors is by increasing the rate of exploitation through either absolute or relative surplus value extraction.

A constant fight

There are many more specific tactics the bosses use to extract from their workers as much labor for as little cost as possible, but just from the few outlined above we can already see why employers are terrified of union victories. The whole logic of the profit-system demands they always find new ways to increase their own profits at the expense of working people. Simple and rational practices like enforcing job designations, eliminating management from bargaining unit work, and keeping to regular schedules all put dampers on the dream of being industry leaders in profitability.

Companies still hold onto this dream even after union recognition, and even when a collective bargaining agreement, is won. For this reason, they try to hold off on implementing whatever gains they think they can get away with. If left with only the contract, grievance procedures, and their own ideas about how a hotel should be run, management, taking orders from investors and corporate boards, tries to revert back to non-union conditions. When they think they can get away with it, management will try to use scheduling, seniority, and other means to turn union members against each other.

While the grievance procedure is an important tactic, grieving takes time, effort, and resources, all of which big companies have in greater quantity than worker-funded organizations like trade unions. A worker’s strength also does not exist in the formal relationship between the union and the boss. Filing a grievance also put the ball in management’s court because however strong a case the workers might have—short of arbitration, another long and costly procedure—the decision is ultimately made by the company.

Strength comes from shop floor militancy. What workers have on their side is the ability to apply pressure on management through delegations, workplace actions, shop-floor campaigns like button ups, or a strike.

The legal protections gained by simply winning union recognition are, of course, incredibly important on their own, but legal protections do not bring a good contracts, livable wages, and job security on their own. They simply put the workers and the bosses on a more even level with regards to their “right” to decide how business is conducted.

For workers to shift the balance of power on the shop floor, they have to make the boss realize that it will be more costly if they don’t give in to workers’ demands. Trade-union militants should keep in mind Marx’s famous motto: “Between equal rights, force decides.”