Third World America

Nathaniel Popper has written a tour de force piece for the Los Angeles Times about the US labor practices of Ikea, the iconic Swedish brand now owned by INGKA Holding B.V., a Dutch conglomerate, at their Danville, Virginia manufacturing facility. The long and the short of it is that Ikea is abusing the rights of its American workers because it can whereas in its European manufacturing sites, the company is held to much tighter pro-worker standards set by progressive governments.

The dust-up has garnered little attention in the U.S. But it's front-page news in Sweden, where much of the labor force is unionized and Ikea is a cherished institution. Per-Olaf Sjoo, the head of the Swedish union in Swedwood factories, said he was baffled by the friction in Danville. Ikea's code of conduct, known as IWAY, guarantees workers the right to organize and stipulates that all overtime be voluntary.

"Ikea is a very strong brand and they lean on some kind of good Swedishness in their business profile. That becomes a complication when they act like they do in the United States," said Sjoo. "For us, it's a huge 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 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.

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.

The line that should gnaw at you is "Ikea was taking advantage of the weaker protections afforded U.S. workers." American manufacturing has been in decline for some time now as an assault on unions and as free trade deals allow corporations to globalize their production. These two forces have combined to shed high paying American manufacturing jobs which more than any other factor has led to the decline of the middle class. 

Still despite this war on American manufacturing, it was only last year that we reached a tipping point. After 110 years of the leading global manufacturing output, the United States was at last surpassed by China. China accounted for 19.8 percent of global production in 2010, slightly higher than the 19.4 percent of the United States. But it is not just quantitatively that we have lost our lead. What we have seen in the United States is a general degradation of labor standards and worker rights since Ronald Reagan broke the air traffic controllers strike and their union, PATCO, in 1981.

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