Times They Are A-Changin’

Now this feels really surreal.


Ikea is running into problems at their Virginia factory with union troubles, wage issues, and discrimination charges. What is crazy is the low wages as opposed to the wage rates and benefits in Sweden. The U.S. is cast as a third world country in this relationship. YIKES!!!

From Steve Benen at The Washington Monthly

WE’RE NOT SUPPOSED TO OFFER THE LOW-WAGE WORKFORCE FOR FOREIGN COMPANIES…. Ikea’s labor dispute in Southern Virginia should be a bigger story.

When home furnishing giant Ikea selected this fraying blue-collar city to build its first U.S. factory, residents couldn’t believe their good fortune.

Beloved by consumers worldwide for its stylish and affordable furniture, the Swedish firm had also constructed a reputation as a good employer and solid corporate citizen. State and local officials offered $12 million in incentives. Residents thrilled at the prospect of a respected foreign company bringing jobs to this former textile region after watching so many flee overseas.

But three years after the massive facility opened here, excitement has waned. Ikea is the target of racial discrimination complaints, a heated union-organizing battle and turnover from disgruntled employees.

It’s quite an ordeal. Workers are forced to work overtime, often with little notice, and those who don’t go along face disciplinary action. Workers have been ordered to attend meeting at which management “discourages” them from forming a union, and Ikea has hired a law firm known for its anti-union efforts.

This is apparently front-page news in Sweden, where Ikea is a celebrated and iconic brand, and where the company is known for progressive labor practices. Indeed, most of the Ikea labor force in Sweden is already unionized.

So, what’s the problem?

Laborers in Swedwood plants in Sweden produce bookcases and tables similar to those manufactured in Danville. The big difference is that the Europeans enjoy a minimum wage of about $19 an hour and a government-mandated five weeks of paid vacation. Full-time employees in Danville start at $8 an hour with 12 vacation day — eight of them on dates determined by the company.

What’s more, as many as one-third of the workers at the Danville plant have been drawn from local temporary-staffing agencies. These workers receive even lower wages and no benefits, employees said. […]

Bill Street, who has tried to organize the Danville workers for the machinists union, said Ikea was taking advantage of the weaker protections afforded to U.S. workers.

“It’s ironic that Ikea looks on the U.S. and Danville the way that most people in the U.S. look at Mexico,” Street said.

Yep, thanks to anti-worker policies in the U.S., we’re offering the low-wage workforce for foreign companies to exploit and mistreat.

As Mark Kleiman put it, “It’s an old, old story: the customers of a company renowned for decent treatment of its workers in its prosperous home country are shocked to learn of its ruthless exploitation of workers in a less-prosperous country where the laws make it harder for workers to defend themselves. All that’s new is that the first-world country is Sweden and the third-world country is rural Virginia.”

—Steve Benen 3:35 PM Permalink | Trackbacks | Comments (18)


2 thoughts on “Times They Are A-Changin’

  1. I have thought of writing a simple blog about how water always travels downhill.

    That is the metaphor used by conservative economists–as far as I understand economics.

    How has Europe kept the water from running downhill?

    I have lived on next to nothing for a decade, but I assume that a couple raising two kids needs at least one parent earning 40G and the other earning at least 30G to survive. It depends upon the locality, available rents, cost of medical care and the need for medical care, the price of food and clothing….

    Eight bucks an hour is a joke!

    The world has changed over the past two decades and yet the opposite of what we need as far as societal change has taken place in this country.

    The repubs would like all government workers to make the minimum wage with no bennies, no health insurance, no pension, no Social Security…

    And in China, the oligarchy pays about two or three bucks and hour.

    Figure in transportation costs and the capitalist feels he cannot pay workers a ‘fair pay’.

    I get lost on this stuff! I just know that the dems are not doing enough and repubs just make the situation worse for our middle class!

    1. You’re right Dick. $8 is indeed a joke. I wish I knew how some economists figure this. We definitely have a wage problem where existing wage rates don’t allow for even a single person to make ends meet. We have millions of families in this country who live on the edge. If one parent loses his or her job or gets sick its all over. And you can forget about saving for retirement or anything like that. College costs have gotten crazy too.

      Then there is the jobs problem where those same economists are solidly behind moving jobs to wherever is the cheapest labor market. This entire recipe is messed up. No doubt.

      When a product is produced how is it they figure the value input of people to making the product varies by geography? Under whatever production regimen exists for making a given product it takes the same amount of material and same amount of labor resource no matter what. Quite obviously they are fine with treating people like crap if they can get away with it.

      On top of this they jerk governments around all over the place in a tax jurisdictional sense. Government officials don’t seem to get the fact that they are being played for fools in this regard and that in the collective the entire global workforce suffers as a consequence. I can only surmise that government officials absolutely don’t care as long as they get theirs and whatever happens to their citizens is OK. The global marketplace and global trade is a sham all the way. The structural inequalities of this are undoubtedly the ugliest social injustice in all of history.

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