Mike the Mad Biologist

I’m a bit late to this story, but, if you missed it, the LA Times had a superb article about how IKEA treats and pays workers at its U.S. facilities much worse than at its Swedish factories:

Workers complain of eliminated raises, a frenzied pace and mandatory overtime. Several said it’s common to find out on Friday evening that they’ll have to pull a weekend shift, with disciplinary action for those who can’t or don’t show up….

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 days — 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.

And the explanation given for the difference should make your blood boil (italics mine):

Swedwood’s Steen said the company is reducing the number of temps, but she acknowledged the pay gap between factories in Europe and the U.S. “That is related to the standard of living and general conditions in the different countries,” Steen 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.

Where the hell are the America Firsters when you need them?

And the Commonwealth of Virginia and local governments paid $12 million to bring IKEA’s factory into a region where the average wage is around sixteen dollars per hour. (The $12 million would cover two years of wages at the current salary). I’m sure that’s what they were expecting (in Sweden, IKEA workers are paid a minimum of nineteen dollars an hour). Not eight dollars an hour, sometimes with no benefits. To boot, IKEA is also being charged with discrimination against African-American employees.

Don’t shop at IKEA until they raise wages and stop busting unions. Then tell your representative to support EFCA (card check) legislation (anybody remember that Obama campaign promise?) and the repeal of Taft-Hartley.

Comments

#1 Bob O'H
April 19, 2011

Why not boycott a country that has such awful labour laws instead? Europeans have a higher minimum wage and more holidays because our governments give us greater protection, not because companies are intrinsically nicer over here. Ikea, just like any other company, is keeping costs low (they’re as amoral as any other company).

Are American companies any better?
#2 Min
April 19, 2011

“Swedwood’s Steen said the company is reducing the number of temps, but she acknowledged the pay gap between factories in Europe and the U.S. “That is related to the standard of living and general conditions in the different countries,” Steen said.”

Banana Republic. Not just a store anymore.
#3 Constance Reader
April 19, 2011

Sigh. And yet again, another commentator blogs about this story while failing to note the two most important paragraphs in the original story.

The first ignored paragraph is the one that quotes more than one IKEA executive in Sweden which plainly states that they had no idea what was going on in Danville that that it unambiguously violates written company policy.

The second ignored pragraph is the last one of the story in which states that the plant managers in Danville are, for the most part, American born and educated, not Sweedish/career IKEA.

This is not an IKEA problem, it is an American management style problem.
#4 Fred
April 19, 2011

@3

Those Ikea executives would never, ever lie. I’m certain that plant managers weren’t given bonuses based on production levels vs costs. Nope, that would never happen.
#5 sng
April 19, 2011

Constance,

The word “written” does not appear in that article and there is one Swedish spokesperson quoted in that story. Care to produce the quotes you claim are there?
#6 Vene
April 19, 2011

There is a problem here, the reality of the situation is that many factories are just as bad or worse. My company processes food and we distribute throughout Minnesota to restaurants, schools, hospitals, and the like. We are treated like shit. I see the benefits they give their workers and find myself jealous. They also pay their lowest paid workers more than what we do. I’m with Constance Reader, the problem isn’t IKEA, it’s us.
#7 Wow
April 20, 2011

The problem isn’t IKEA. Just like the problem wasn’t BP. The problem is the USA’s laws on how corporations must act and the almost religious belief that corporations MUST MAXIMISE PROFITS as their primary purpose.

IKEA pays what they can get away with. In the USA, that’s 10 days leave and no minimum wage (you can get a job elsewhere if it doesn’t pay enough is what the lubertarians say, and the US Gov agrees). In Sweden, they pay more and have more leave because the Swedish government say they must (IKEA can go build elsewhere if they don’t like the demands).

BP did what safety procedures were needed. The US Government said that the second safety cutoff wasn’t needed and it is an expense so BP didn’t use it. In the North Sea, BP are required for a secondary failsafe and they do it.

The problem isn’t the company but the government.

What is the fault of the company are the scare stories and threats of how they’ll leave if they’re asked to do the decent thing.

So, blame IKEA for saying that they’ll leave if they didn’t get $12mil. Blame the state for giving it to them and not demanding a fair wage.
#8 Phillip IV
April 20, 2011

I don’t quite follow the logic of calling for an boycott of IKEA specifically, if they don’t behave any worse than American companies in the same sector. There would be some logic in calling for a boycott of any furniture company which doesn’t pay its American workers a minimum of $19/hour, but then you’d have to sleep on the floor.

Compare the wages and perks at any GM or Ford plant in the U.S. to those at their European plants, and you’ll pretty much find the same pattern, same for nearly any multinational.

Expecting companies to pick up the moral slack for an American electorate chronically unable to elect a Congress that would enact a few meaningful labor laws seems rather illusionary, and I don’t quite understand why IKEA should be singled out for that.
#9 Ohgre
April 20, 2011

“When in Rome…”. I’m sorry but large American companies are recognised the world over as exploitative. It should be no surprise that americans running an american company in america are exploitative.

You need better, stronger legislation, stronger politicians. Boycotting Ikea will change nothing.

Of course, maybe your attitude is just “Those may be amoral exploitative companies, but they’re OUR amoral exploitative companies! IKEA isn’t!”.

There’s quite a reek of xenophobia emanating from this post.
#10 Christopher Wing
April 20, 2011

Methinks I hear the sound of an empire crumbling. I’m trying not to get giddy.

Perhaps a few more wars would boost the economy?
#11 orjin krem
April 22, 2011

The second ignored pragraph is the last one of the story in which states that the plant managers in Danville are, for the most part, American born and educated, not Sweedish/career IKEA.
#12 Complex 41
April 22, 2011

BP did what safety procedures were needed. The US Government said that the second safety cutoff wasn’t needed and it is an expense so BP didn’t use it. In the North Sea, BP are required for a secondary failsafe and they do it.