The first is a story about Ikea, everyone's favorite cheap furniture maker. I'd had a positive opinion of the company until I read this story and did a little digging. Here's why.
Workers at the Danville IKEA plant say they are forced to work at a frantic pace, participate in mandatory overtime — possibly facing disciplinary action for not showing up — and raises have been eliminated. Six African American employees have filed discrimination complaints, claiming that they were assigned to the least-wanted third shift and forced to work in the lowest-paying departments. Moreover, while making a profit of $2.2 billion in 2009 and a 7 percent sales increase in 2010, the hourly wage in the Virginia IKEA packing department was slashed from $9.75 to $8.00. Attempts at forming a union have also been thwarted by IKEA, as some of the 335 IKEA workers in Virginia signed cards expressing interest in forming a union with the International Association of Machinists and Aerospace Workers. But, in response, IKEA hired the law firm Jackson Lewis — known for keeping unions out of companies — and workers were required to attend meetings where the management highly discouraged union membership.
But some IKEA employees work for even lower wages and have no benefits, as IKEA draws one-third of its workers from temporary-staffing agencies. These conditions have caused Bill Street, who tried to organize IKEA workers with the machinists union, to say that it’s “ironic that Ikea looks on the U.S. and Danville the way that most people in the U.S. look at Mexico.”
The second story touches on one of my favorite topics, rank hypocrisy in the "moral majority"
News & Advance reporter Liz Barry wrote today that Jerry Falwell Jr.‘s Liberty University blocked access to N&A’s website for at least one day last week, and that “Falwell did not elaborate on the reason.” I asked the reporter via e-mail if she had any idea what prompted Falwell’s move. Barry never responded, but I’ve since learned that it was her earlier story that got the paper blocked.
"Liberty University students received approximately $445 million in federal financial aid money last fiscal year, according to U.S. Department of Education data, making LU the top recipient in Virginia."
Salon.com linked to Barry’s story and pointed out the conservative college got more government cash than NPR last year. Romenesko is told that the Lynchburg paper’s aid story gave Liberty “a lot of headaches, to the extent they enlisted their DC public relations firm.”
Ohh, SP500 getting to nasty levels in premarket.
ReplyDeleteI guess the Johnnys' Pants Humidity indicator is breaking to new highs.
Thor,
ReplyDeleteIkea, the Walmart of Swedish imports. How very unSwedish of them.
Companies like Walmart and Ikea know that while operating in America they can exploit their workers as that is what is SOP these days.
Sorry, Thor.
ReplyDeleteIkea is getting my business.
They are the only provider of meatballs in Singapore.
You can get these really wierd tasting meatballs for hotpot or chinese dishes. You cannot get western meatballs anywhere except Ikea. there is no Costco, so you cannot get Costco meatballs, or any clone.
No matter what their union or corporate policies are, they are getting my money for their meatballs.
sorry.
by the way, after shopping a whole bunch of times at Ikea, I never once, in the many hours, saw one employee there working at a frantic pace.
ReplyDeleteJust more media lies to get readers, I'm afraid.
The fact that they hire temps is no big deal. The temp agencies should be thwacked for not providing bennies to their employees.
When you hire a temp, you don't pay the temp, you pay the agency. The agency pays the temp.
True Rock, but maybe the biggest reason the temp model "works" is because most of them don't offer decent (or any) bene's.
ReplyDeleteRock,
ReplyDeleteThe egregious hiring of 1/3 of their labor force from temp agencies is quite revealing, as is their attempts to keep their business non-union.
Your defense of their tactics is quite revealing as well. Your anecdotal evidence just doesn't mean a hill of beans as the harassment of employees is done out of sight of the customers if a company is smart.
And after reading the article more thoroughly, it states that conditions were are the plant, not in retail stores.
ReplyDeleteFor me (as a former HR & recruiting "professional" - I use that term VERY loosely, by the way, for obvious reasons), the main reasons temp agencies exist is to operate as a shadow labor or employment system that can assist in pushing labor costs down for the employers they represent, while they and the employer split the bounty saved by using such tactics.
ReplyDeleteNice articles, Thor. Thanks.
ReplyDeleteRock - hah, fair enough! :-)
ReplyDeleteManny - damn, that's very insightful. We primarily use temps and contractors as a way to try people out before we hire them. Some departments use them heavily because they've had such a hard time finding quality people.
ReplyDeleteManny,
ReplyDeleteTemp agencies are where hopes go to die. Most companies hire temps for spots they want to fill because they want to try it before they buy it.
Plus temps are underpaid, get no benefits so the company wins by getting a hopeful temp, working them hard for much less than a comparable full time employee would command and wins again as they might keep the employee on for six months before hiring them, getting a bargain on salary and no bennies.
Hey, it's the American way! Do everything you can to pay as little as possible for your work force.
I wrote my comment before seeing yours.
ReplyDeleteShort squeeze!
ReplyDeleteDss
ReplyDeleteYour assessment of temps is inaccurate. I have hired many a temp in my career.
First, Temps get a tax bonus. They get to charge off their phone, a room in their home (loosely called office), some of their utilities, their broadband, some or all of their transportation, dual-martini lunches, and of course their SEP and IRAs against their incomes.
Second, they get to pick and choose which assignments they wish to take. Something a permanent employee doesn't get.
Third, they get to show off their skills. The temp has been hired because that skill is not available in the company, and it would take too long to open a permanent requisition, justify, search per EEO requirements, hire and close a permanent employee. Whose permance may be in question depending if your company has a qualification period (as does Intel).
Fourth, it is easier to get a temp into your department (if you're the manager) because to justify a permanent hire in many large (and some small) companies is beyond the capabilities of an MS/MBA.
I think you're off base on this one.
Ever been a temp? I have.
@Dss
ReplyDeleteHit the "post" button too quick.
Ever been a temp? I have. Employees treat you like manure, management treats you like a necessary evil. You get to feel good about the contribution you're making and that no one else can make it like you can.
In this day and age, aren't we all temps?
ReplyDeleteAlternatively, we have several employees who are contractors and do not want to be full time - people who either don't need the benefits (use their spouses), don't want to be tied down, or prefer to work on specific projects and then leave.
ReplyDeleteRock, also, and Manny may be able to confirm this. I think there is a fairly strict legal difference between a contractor and a temp. Our HR people tell me that in California especially, classing an employee as a contractor rather than a temp can get a company in a lot of trouble. Not sure if that's the same in every state.
Yes, Rock, I have been one, too. My daughter is currently a temp as well. My brother-in-law has been a contract employee for about 15 years by choice.
ReplyDeleteI believe you are confusing and interchanging 1099 contract employees with temps who as you say, are paid by the agency. Contract employees are considered self employed and can deduct many expenses.
Being a W-2 temp is another story.
SEP IRA contributions are for the self employed (contract workers), not ordinary temporary workers. Being a temp gives you no special retirement benefits that an ordinary worker would also receive, if they were so lucky to actually be fully employed and could afford to make donations to their IRA's.
Temps do get to "pick and choose" jobs, when they are available, but don't make it sound like there are so many fabulous jobs out there that they can chose from because there isn't. Usually the choice is which one doesn't suck as much as the other.
There are obvious benefits to people who ONLY want to work on a temporary basis, but for those who are seeking full time employment with benefits it may be the only way to get hired these days.
There is a real need for temps in business today, but too many businesses abuse the system in order to maximize profits and that is a fact. Employers have the power in the relationship not the other way around. Profits over people.
greg,
ReplyDeleteSome are more temporary than others, but I do agree.
Let me make it clear, I am criticizing the abuse of the temp system, not the system itself.
ReplyDelete@Dss
ReplyDeleteOk, Ok, I may not have all the details. But I'll tell you this, I knew temp that would love to to to the bunchaemployees lunch, collect an "average" sum per person, and charge his credit card. I mean, it was at least 2X per week.
The last thing is that there may not be fabulous jobs out there, but we'd hire a temp to do the new innovative stuff over a permanent employee because the permanent employee was critical in his/her execution of the position, and there was no way we'd let him/her go to do new stuff when the ship would fall over the edge of the earth if he/she stopped doing his/her job.
I hate EEO.
Rock - how does the economy seem in Singapore? Are you seeing any slowdown or pick up?
ReplyDeleteI have never been to an Ikea store, so have never had their meatballs.
ReplyDeleteI have been to a Costco though, but never had one of their hotdogs.
Hmmmm, I guess I got to get out more often.
Mutt
@greg
ReplyDeleteNo, we aren't. There are tax laws which describe tax benefits for temporary employees that "permanent" employees can not receive.
There are lots and lots of reasons to be a temp. It's a kind of entrepreneurship.
@Mutt
ReplyDeleteI would die for a bag of Costco Italian meatballs.
Rock - I will try and steal you a bag of Costco Italian Meatbalss, before letting you try doing something that extreme :)
ReplyDeleteThey do not have Costco Italina Meatballs in Singapore?
Mutt
Rock - I think the difference we're talking about are the differences between contract employees (1099) and Temps, people who work for a temp agency and are paid by the temp agency, rather than the company itself.
ReplyDeleteYou might not have experienced both of them in your field, but I can assure you that the temps are quite different than the contractors. We view contractors (at least here) as basically employees who are not on our payroll, but who are, for all intents and purposes, employees of the company, sometimes staying years to finish a project. When we hire temps, it's usually always for short term grunt work projects. We will very often use one temp one week, not be happy, and call the agency to tell them to send another. Usually, the temps are also lower quality as they are not nearly as specialized (especially in IT) as the contractors. We would hire a temp to help us with a large move or software/OS upgrades, while we use a contractor to help us build a specific Java applet.
Not sure if that makes much sense or not, but that's how we do things where I work. :-)
@Thor
ReplyDeleteI am seeing quite a lot of mallspace opening up. At one of the best and highest rent malls there is a lot of "there's a new and exciting shop coming here" temporary hoarding.
That's not a misspell. For some reason, here they call "temporary boarding" which is the boarding you put up to hide what's going on behind, "temporary hoarding".
I always thought "temporary hoarding" was my bank account.
I had lunch the other day with the designer of "Peri Peri Chicken" restaurants. He's from Malaysia, and is a friend of my next-door neighbor, the Sultan of Johor.
He said that business has never been better.
http://www.nandos.co.uk/index.cfm
BTW, I had some friends over the other night for PeriPeri chicken, and they said mine was better. Brag brag.
I went to investigate retail property to buy, Rock's rental space will be up this summer and the Great Eastern (my landlord) is known for its propensity to double rent after the first term, so it's wise to be prepared to move. Anyway, property values are holding here, even up. I can buy a 3BR flat, around 1200 SQ FT, for around 1.2 million (new and newer). Looking at the used space, I can get 1800 SQ Ft for around 1,5M.
There is so much opportunity for business here. If I were younger, I'd open a Home Depot, or a Booby's Italian Beef restaurant.
http://chicago.metromix.com/restaurants/barbecue/boobys-charcoal-rib-niles/138307/content
@Thor
ReplyDeleteOr a Costco's and sell meatballs.
Rock,
ReplyDeleteNo, what you would want to open is a Portillo's kind of restaurant. Lines out the door, and their drive through is always packed.
http://www.portillos.com/
Of course, they are privately held and do not have franchises, but they are the best.
Thor I liked this comment as well from the comments:
ReplyDeleteWage-slavery is cheaper than actual slavery. When you actually OWN the workers, you have to pay for their housing, health-care, education, etc.
It's much cheaper when you can pay them "what the market will bear" and tell them to get the hell off of your property because their problems are not your problems.
Or you could open a taco wagon.
ReplyDeleteThose were a main staple where I grew up.
We had a Dairy Queen and Road Runner (Convience???? store)
But if you wanted the best bang for your buck it was the taco wagons.
You could also concider opening a Burger King right next to a Dairy Queen and see what they produce.
Mutt
Had to step out for a bit, but on that topic of temps - it's also a way for U.S. companies to externalize (or even "socialize") their health care bene's costs onto the rest of the community and country as a while. What happens when most of these temps, who don' thave health coverage, don't get preventative care? Well, they go to the emergency room and get the more expensive care there after the fact, and then the bill gets divvied up to by the rest of us, hence the externalization or socialization of the costs. See, the peeps in charge are really OK with socialization, just as long as THEY reap all the benefits. Isn't that plain and clear as day by now, folks?
ReplyDeleteAnd, as a result, our health care costs on the rest of us continue to go up, even on the healthy people. It's a freaking sick joke by now when you really connect the dots. Connect the damn dots, please! ;-)
ReplyDelete@Rock: What you're describing are high paid "consultants". There's a BIG difference between those folks and the bigger, far lower paid temp class that's out there. Trust me, I know. I was in the industry, so I saw it firsthand. Those folks you describe can hardly be described as "temps" in my view. There's a big difference. I'm telling you this as someone who worked IN this industry.
ReplyDelete@Thor: Your analysis (and distinction) is pretty much spot on, although the employment laws do vary from state to state.
ReplyDeleteAnd the terms "contractor" = "consultant", in my view. Or that's how made the distinction when I was in the biz.
ReplyDeleteTemps are the lower level peeps that have little to no security or ability to buy their own insurance, and this class of peeps is getting bigger by the day in this country. Of course, companies don't mind fobbing off this cost on the rest of society if it means they can fill their wallets as a result. Connect the damn dots.
Mozzarella di bufala.
ReplyDeleteEven bufflo mozerrella cheese is outsourced!
"New Economy: Italian makes mozzerella in India".
A guy from Naples Italy, buffalo mozzarella heartland, sets up shop in northern India.
htt://www.theglobeandmail.com/report-on-business/grow/new-product-development/italian-makes-mozzarella-in-india/article1985217/
Funny. "wait a minute...These are the same buffalo".
ICan
I thought this was a good look at renting vs. buying at the higher end:
ReplyDeletehttp://www.calculatedriskblog.com/2011/04/renting-vs-buying-at-high-end.html
Buying still not a good deal at the high end unless the buyer can pay mostly cash and has other considerations for buying, IMO.
Manny,
ReplyDeleteThanks for the explanations. The tremendous rise in the use of temps (not contractors) is responsible for some of the problems that people have getting full time employment with bennies.
My daughter was offered a position at the temp agency to be employed at the temp agency for a future managerial position as she was a recruiter previously and they liked the fact that she is articulate, and a hard worker and the owner wanted to retire.
Of course, they wanted to "try" her out before hiring her, at $11 an hour; when she told them that she gets up to $18.00 an hour for the child care jobs she has taken to support herself, they were shocked. (People will pay good money for a college educated capable woman who can drive, to take care of their children)
They upped their offer to $13.00 an hour. Which is the princely sum of $27k a year for her to run their office after training. Which meant recruiting, bookkeeping, every function of running this business. Huge responsibility once trained and they "might" consider a few dollars more per hour when fully trained.
She shocked them again when she told them she had been making $55k as a recruiter as they just could not possibly pay her anything near that.
So you have the owner of the temp agency trying to hire her for $27k a year, no bennies, to run the entire operation after training, with no promise of more money once trained.
Seriously. And they thought she was going to jump at it. She said she would rather continue the childcare until she found a proper job as $11.00 would not pay her bills.
@Denise (et al): To be clear, SOME temp jobs have traditionally been a GREAT for inexperienced and/or unemployed workers to get into the job market again in jobs and companies they may well enjoy and thrive in. It's how I got my start at the old Lotus Development corp a couple of years before IBM bought them in a hostile takeover. Great entry level opportunity at a really good company to work for at the time. However, the temp model has increasingly been abused over time to externalize many would-be costs for the company onto their greater society and community at large. That's unfortunate.
ReplyDeleteUntil the entire cost structure of the U.S. comes down (which Benny, Timmy and the gang are furiously trying to prevent), things will remain out of whack for far too many workers in this country, who increasingly can't afford even the basic necessities. Wages going down in many cases, while prices are not. See the disconnect? I guess there's always cheap and "easy" credit, right?
ReplyDeleteSimon Johnson weighs in.
ReplyDelete"Could Goldman Fail?" Likely not, according to Johnson, as they'd simply be bailed out again. So someone tell me yet AGAIN why these jackals are "worth" so much money when they have an explicit backing of the U.S. government to take any risks they want but still have the comfort of knowing they'd be bailed out yet again if they got into to trouble? Socialism for banksters = fascism not-so-lite.
http://baselinescenario.com/2011/04/14/could-goldman-sachs-fail/
But of course we must NEVER, EVER raise taxes on them either. Nope. Can't do that. That would be "socialism".
ReplyDeleteManny,
ReplyDeleteExactly. I am critical of the abuses of the practise, as there are substantial benefits as well to all of the parties.
Especially burns me as I am writing out checks to the IRS.
ReplyDeleteThink about how many of our businesses and industry exist almost solely because they can externalize big costs onto society. It's quite alarming when you think about it. Yet folks inside those companies insist on being against "socalism". Yeah, against socialism when they don't reap ALL of the benefits. That's what they're really against.
ReplyDeletesocialism. Typing 101, Manny.
ReplyDeleteI'm actually getting kind of excited about this next budget push. SHould be a good fight and I have a feeling, or maybe it's just a hope, that in the end, the extreme wings of both parties are going to come out of the process looking very bad. This plan to guy Medicare is really starting to back-fire.
ReplyDeleteWhich ties into what Manny and Denise have been talking about "Keep your hands off my Government Provided Healthcare!"
Anxiety running high among b-schoolers, but apparently not much studying either.
ReplyDeletehttp://www.nytimes.com/2011/04/17/education/edlife/edl-17business-t.html?_r=1&src=ISMR_HP_LO_MST_FB
Michael Burry of "Big Short" fame weighs in. Very interesting.
ReplyDeletehttp://www.zerohedge.com/article/michael-burry-toxic-twins-fiat-currency-and-activist-fed-set-route-long-term-ruin
Watch the entire video if you can. Pretty good stuff there.
ReplyDeleteEarnings don't seem to be all that strong so far. Google missed too?
ReplyDeletewhat's the thinking on:
ReplyDelete"25,000 out of 70,000 Illinois State Employees are on Workers' Comp
The cost of doing business in Illinois is staggering. Such is the nature of a bottom-feeding government and union-driven model that adds inefficiencies everywhere you look and also in places you don't.
For example, over 35% of Illinois state employees are on workers' comp. That statistic would be bad enough in isolation, but Illinois also has the highest costs in the nation, by far.
Please consider Workers' comp reform is too important to state business climate not to address, soon
If you need a local example to illustrate in real dollar terms just what it means to have the second highest workers' comp costs in America - behind only Alaska, by the governor's own admission - look no further than Morton-based CORE Construction Group Ltd., which operates nine companies in five states.
Marc Collins, associate risk manager for CORE, compared five years' worth of claims between the local construction firm Otto Baum Company and Sun Valley Masonry, another of their holdings in Phoenix, Ariz. The two companies are of similar size, with about the same number of employees. What he discovered was that local claims averaged $32,807 each over that time frame, compared to $6,212 in Arizona.
Caterpillar - which obviously deals in much bigger numbers - has an even more dramatic story. In 2008, "the total incurred cost of the injuries at the Illinois plant was seven times higher than the cost of the injuries at the Indiana plant." The jobs are essentially the same...."
http://globaleconomicanalysis.blogspot.com/2011/04/25000-out-of-70000-illinois-state.html
??
also, IKEA has abusing people, things, for a loong time..
check out their history, as RAN tells it..
http://search.yippy.com/search?input-form=clusty-simple&v%3Asources=webplus&v%3Aproject=clusty&query=Rainforest+Action+Network+IKEA
AAIP
Gold all time high in fiat U$D 1480. Few $ off now.
ReplyDeleteICan
Well hello the Hoffer ;-)
ReplyDeleteAAIP,
ReplyDeleteMish, as usual, doesn't give a link to where he got that statistic, he is just quoting someone else without any supporting credible links and his credibility is zero in my book due to his extreme anti-union bias.
Interesting link about Ikea. Doesn't surprise me. Thanks.
What a day - One hour, and forty seven minutes. That's how long it took to drive 13 miles today. I'm starting to rethink my Ford Flex purchase :-(
ReplyDeleteThor - I started driving my Charger full time this week (Hopefully this wont last too long)
ReplyDeleteI only put premium in it, put $60 Monday night to get to 3/4 tank and I only have 1/4 left.
I drive the same 5 mile stretch of road at least 2 sometimes 3 times a day, there are more stop lights then anything.
I could not imagine being behind the wheel for almost 2 hours just to go 13 miles, riding a bike would be faster.
Sorry buddy.
Mutt
Thor,
ReplyDeleteThat is just awful. :-(
MEF - I was working on a project this week and came across some anomalies.
ReplyDeleteI am doing some research for power lines around one a nuclear reactor - Long story short, there are buildings that should be there, that aren't, transmission poles that are gone and data that just does not match up.
If it was just one or two anomolies, I would not think to much of it as some of these lines where built in the 40-50's, but there have been enuff strange things to make me scratch my head.
Anyway, that caused me to think of you a little, I hope all is well with you and yours.
Mutt
Mutt & Denise - I never thought I'd see the day when I'd say this, but after 7 years, I'm actually used to the traffic. It's just a part of life. You adjust - for instance, no one is ever expected to be on time to most things, certainly never at work. So many people come from so many directions with so many different traffic issues every day, that there's just no way all of us are going to be on time every day. On the plus side, if you need to run a quick errand before work, no one questions is when you're half an hour late.
ReplyDeletespent some time chatting with my neighbors boyfriend, he's down from Sacramento and is a commercial real estate broker. He said that things have really started to pick up there since January.
ReplyDelete