Saturday, 21 May 2011

Lax labour laws in the US turning it into a sweatshop for European manufacturers

Olive: America, the world’s sweatshop -
And similar anti-worker/anti-union movements (promoted by corporations and conservative governments) are happening here too in Canada.


Sweden’s Ikea was revealed in April to be operating a manufacturing
plant in Danville, Va., that is a toxic brew of charges of racial
discrimination, routine worker maltreatment, and brutally successful
efforts to bust union-organizing drives.

Sodexo, which operates the cafeteria
at this newspaper and my Mom’s nursing home, has threatened and fired
workers who tried to unionize, as HRW found from studying official
decisions by U.S. labour-law authorities, along with worker interviews
and employee court testimony.

At its newish California chain of
grocery outlets, U.K. supermarket giant Tesco has muzzled workers trying
to discuss organizing a union. The Netherlands-based Gamma Holding has
hired permanent replacement workers to put strikers out of a job — in
contravention of international labour standards, but not of U.S. law.

And Deutsche Bank turns out to be one
of LosAngeles’s biggest slumlords. After foreclosing on some 2,000 L.A.
homes, Deutsche Bank continued collecting rent while allowing the
premises to rot and become gang-infested to such an extent that dead
bodies are not infrequently found there. “Nothing, in other words, that
would be allowed to happen . . . in Frankfurt, the neat-as-a-pin German
city that is home to Deutsche Bank,” Meyerson writes.

The hypocrisy here stinks to the
heavens. In Europe, minimum wages average $19 an hour. Governments
mandate five-week paid vacations. Norway just introduced paid
paternity leave.
And most European multinationals not only are unionized, but union reps
fall just short of a majority on many European corporate boards.

Many top European firms have joined “the race to the bottom” in employee costs.

But China is no longer the
“off-shoring” jurisdiction of choice. With annual wage gains now
averaging 15 per cent to 20 per cent, combined with stagnant wages in
North America, China will lose its labour-cost advantage over North
America in just four years time, according to a report this month by the
Boston Consulting Group.

From Hamburg to Lyon to Stockholm,
the question is why aren’t we serving the North American market from
lower-cost facilities there? Which means that “guilt-free shopping” will
soon mean avoiding “Made in USA” labels on products made by workers
denied a decent living wage.

The Euro-exploiters are especially
drawn to the U.S. South, which for three decades have lured employers
with so-called “right to work” laws. That’s an Orwellian term for
government-sanctioned hostility to workers’ rights, including the right
to organize.

In small-town Virginia, Ikea gets
away with paying workers to make the components of its trademark
bookcases just $8 an hour, and granting only 12 paid vacation days.

In North American culture, jobs are
dispensable. In Peoria, Ill., Caterpillar laid off 25,000 workers on one
day in 2009. Try that in France or Italy and you’re inviting a national
general strike.

U.S. officialdom has for years
hectored other nations to upgrade their labour-rights standards. But as
the HRW report shows, the issue is retrograde
U.S. labour standards.

The irony here is that employee
denigration does not work. German manufacturing pay averages 50 per cent
higher than that of the U.S. Yet Germany enjoys a massive trade
surplus. And America suffers a ruinous trade deficit, for all its
disdain of European-style full-employment practices.

My local Staples manager complains he
can’t keep employees “because we don’t pay much. I can’t blame them for
leaving.” High turnover hikes training costs and annoys customers
dealing with staff who lack product knowledge.

This a social-justice issue, no
mistake. But really it’s the hard-headed business strategy of a Henry
Ford, who paid above-average wages to spur consumption.

It’s the reason today that Costco,
with its outsized employee benefits, outperforms Wal-Mart. (Costco
shares have increased 133 per cent over the past decade, to Wal-Mart’s
measly gain of just 6 per cent.)

And it’s among the reasons that
Eaton’s is dead. In the midst of the 1985 strike at that Canadian
retailer, I asked then-CEO Fredrik Eaton why his family chose to break a
nascent union, rather than deal respectfully with employees on the
picket lines who had me almost in tears describing their loyalty to the
then 116-year-old firm.

“People here have no need of unions,”
said the fourth-generation Eaton owner-CEO, who declined to elaborate.
Fourteen years later Eaton’s filed for bankruptcy.

I’m not saying maltreated employees
were the chief factor in the demise of Eaton’s. But the casual regard
for employee relations at Eaton’s was indicative of management’s
ineptitude generally.

When you’re next at Ikea, ask the
workers serving you — a surly lot, I’ve always found — what the pay is
like before imagining that you are engaged in “guilt-free shopping.”

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