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Two firms join 'race to the bottom'

Date Posted: July 5 2002

Somehow, tens of thousands of employers across Michigan and the nation manage to make a fair profit for themselves, while paying their workers a collectively bargained wage.

In our cutthroat global economy, there are successful, profitable U.S. companies who are responsible partners with their community, respect their employees, and exhibit a corporate conscience.

And then there are companies like Wal Mart and Tyson Foods. Both companies were in the news last week, and the reports of their abominable corporate behavior might give all union members reason to appreciate their employers:

'Profits recession' brings move for pork plant

Tyson Foods abruptly closed its Holly Ridge, North Carolina pork processing plant in June, putting nearly 500 employees out of work. TheWall Street Journal said the closing of the plant was "an incredible blow" to the town with a population of less than 700, with almost no other employers in a 20-mile radius.

Many of the laid-off workers lack a high school diploma. Some don't speak English. More than half of the jobless workers are women or men supporting a family by themselves. Many workers had brothers, sisters and other relatives working at the plant - making the workplace like an extended family.

"This closing presents many unbelievable challenges," said Mark Wuntke, the rapid response coordinator for the area.

Why was the plant closed? If you're assuming it was because the facility wasn't making money, you would be wrong. It was profitable. Is the pork industry doing poorly? No, it's "in pretty good shape," the Journal said.

Tyson Foods, the world's largest processor of beef, chicken and pork, said it wanted to shift production of the 34-year-old plant to more modern facilities in the Midwest. The company said it isn't sure how much money it will save, but stock prices often get a boost after a company makes such a move.

We will leave it to the Journal to make sense of the move:

"What is happening in Holly Ridge is symptomatic of the newly intensified cost-cutting culture that is sweeping across corporate America. Factory executives, traumatized by the deepest profits recession in post-World War II history, are finding ways to save every penny possible - even when there aren't any immediate signs of trouble and even when the consequences can bring financial harm to an entire town."

Workers allege Wal Mart wanted a piece of their time - off the clock

Charles Kernaghan, executive director of the National Labor Committee, said "Wal-Mart is driving the race to the bottom" by multinational corporations roaming the globe for lower labor costs. Wal Mart is also building on its legend as a lousy domestic employer.

The New York Times reported last month that the nation's largest retailer is the subject of class-action and individual lawsuits from workers in 28 states, who allege that Wal Mart has cheated employees out of millions of dollars in lost wages.

Forty current and former Wal-Mart workers interviewed by the Times over the last four months say Wal-Mart violated federal law by forcing or pressuring employees to work hours that were not recorded or paid. Although Wal-Mart's policies officially forbid such work, current and former workers and managers said an intense focus on cost cutting had created an unofficial policy that encouraged managers to request or require off-the-clock work from their employees to avoid paying overtime.

Verette Richardson worked for a Kansas City Wal Mart from 1995-2000. According to the Times, after finishing her 10 p.m. to 8 a.m. shift, Richardson clocked out and was heading to her car when a Wal-Mart manager ordered her to turn around and straighten up the store's apparel department.

She said she was eager to stay on her boss' good side, and she spent the next hour working unpaid, tidying racks of slacks and blouses and picking up hangers and clothes that had fallen to the floor. Other times after clocking out, she was ordered to round up shopping carts in the parking lot.

Some days, as soon as she walked in a manager told her to rush to a cash register and start ringing up purchases, without clocking in. Sometimes, she said, she worked for three hours before clocking in.

"They wanted us to do a lot of work for no pay," said Richardson. "A company that makes billions of dollars doesn't have to do that."

In addition, former employees at stores in California, Louisiana, New York, Ohio, Oregon and Washington told the Times that many evenings when their stores closed, managers locked the front door and prevented workers - even those who had clocked out - from leaving until everyone finished straightening the store.

Jon Lehman, a retired Wal Mart store manager from Kentucky, said Wal-Mart warned managers repeatedly against going over budget or paying overtime.

"You got to hit the payroll budget they set for you, but if you're over, they discipline you," Lehman said in an interview. "People get demoted all the time for that. I've seen it happen numerous times to friends of mine. I've also seen store managers demoted for paying overtime."

Wal Mart's alleged stinginess with overtime payments comes at a time when it enjoyed more than $200 billion in sales last year. Most hourly Wal-Mart workers earn less than $8.50 an hour, which amounts to $17,680 a year for a full-time worker.

"You have Wal-Mart, this mammoth retailer, lowering living standards worldwide by busting union efforts, intimidating workers, driving down wages and disobeying worker protection laws," said UFCW President Douglas Dority. "We must make Wal-Mart respect workers and obey the law, or the company will lower living standards for all workers."