Renewing the Nation's Commitment to Labor Law

It turns out that arresting half the workforce at Iowa's Agriprocessors, Inc. for crimes related to their status as undocumented aliens wasn't good for Agriprocessors or, more importantly, for the town of Postville in which the kosher meatpacking plant is located. Agriprocessors has filed for bankruptcy.

The workforce arrests weren't Agriprocessors' only problem. Serious labor law violations, including the employment of underage workers, resulted in thousands of misdemeanor charges against the company, its owner and its top manager. The company's former CEO was arrested last week on federal charges of conspiring to harbor illegal immigrants. Consumers (Jeralyn among them) stopped buying Agriprocessors' products after the plant's working conditions and child labor violations were publicized.

Still, it's difficult for a company to stay in business when half its workforce is suddenly hauled off to jail (not to mention the devastating consequences to the workers and their families). [more ...]

Agriprocessors paid its laborers far less than the prevailing wage for the kind of work they did. If Agriprocessors had been given a chance to phase out undocumented workers (which it could likely have done only by paying fair wages to legal workers), it may have been able to avoid bankruptcy. Paying fair wages might have forced it to charge more for its products, but it apparently had limited competition given the reported shortage of kosher meats that resulted from Agriprocessors' distress. Higher consumer prices are a small price to pay for an adequately paid, safe workforce.

Perhaps Agriprocessors deserved to go out of business. It fiercely resisted unionization, choosing to employ undocumented workers (who, of necessity, work for low wages) rather than paying a fair wage that would have attracted legal workers. Its violation of child labor laws and the abusive work environment it provided were more than sufficient reason for consumers to look elsewhere for kosher foods.

Yet it's clear that the State of Iowa dropped the ball in failing to detect and to remedy the labor law violations long ago. Iowa's labor law regulators and Agriprocessors battled regularly over the company's employment practices. Still, if Iowa's regulators had been more aggressive, Agriprocessors may have cleaned up its act and stayed in business -- helping the economy in a small town that now has to weather the closing of an important local employer. Maybe Agriprocessors' owners were so incorrigible that they just wouldn't comply with the law no matter how much heat the State applied, but it isn't at all clear that state regulators turned the heat up to the temperature needed to make Agriprocessors obey the law. If it's cheaper to pay fines than to comply with regulations, that's what some businesses do.

Now it's probably too late. Not only will legal employees lose their jobs if Agriprocessors does not survive bankruptcy (and it appears from the linked article that it won't), but local businesses that depend on Agriprocessors' employees spending their paychecks locally will also suffer. The loss of a company that brings in $300 million a year will be dearly felt in Postville and surrounding towns.

The lesson to be learned here has less to do with immigration reform than with the need to revitalize labor law. It should not have been so easy for Agriprocessors to resist unionization. It should not have been possible for a major employer to hire child labor. Yet since the Age of Reagan, government has more often seen unions as evil than as a mechanism for assuring justice in the workplace. Labor laws that promote unionization have been weakened, and the enforcement of laws addressing workplace safety and labor standards has been a low priority. A renewed commitment to unionization and to the enforcement of fair labor standards is necessary to prevent more businesses from engaging in the self-destructive greed that toppled Agriprocessors -- greed that will cause suffering in Postville for years to come.

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    Buckeye Egg (5.00 / 2) (#1)
    by Fabian on Thu Nov 06, 2008 at 11:33:29 AM EST
    was Ohio's poster child.  The egg producing mega farm resisted environmental regulations, persistently, consistently.  So much so that they not only paid fine after fine, but the EPA finally revoked their permit and shut down the egg laying operations that way.

    Some businesses and some employers are just simply going to be noncompliant if they think that is in their best interests.  It took two decades to shut down Buckeye Egg and that wasn't via bankruptcy either.  Apparently the operation was profitable right up until their permits were revoked.

    I'm not sure what the solution is for deliberately noncompliant employers.  I wouldn't count on fines or the threat of fines do ensure compliance.  

    After a certain point (5.00 / 2) (#3)
    by joanneleon on Thu Nov 06, 2008 at 11:57:05 AM EST
    if a company repeatedly violates regulations, and chooses to pay the fines rather than comply, I think it should become a criminal offense.  Either that, or the fines have to be a real penalty that hurts the profitability of the organization.  Otherwise, why have regulations at all?

    Hillary had some serious fines (5.00 / 1) (#5)
    by nycstray on Thu Nov 06, 2008 at 12:01:19 PM EST
    in her proposal to increase food/product safety. And I believe also criminal was much more severe.

    Bankruptcy doesn't mean (5.00 / 2) (#6)
    by joanneleon on Thu Nov 06, 2008 at 12:08:49 PM EST
    the company is gone forever.  It just means that these owners are probably gone.  The best case is for the company to be sold to better employers.

    That being said, the problem is a lot bigger, as we all know.  There are other companies out there doing the same thing, and as long as there are enough of them, companies who comply with the law won't be able to compete.  Then there is the question of whether any company can compete in this country, given the situation with our trade agreements and competition in the global market.

    The bottom line is, IMHO, that this is one of those times when we need to be more protectionist, especially in the food industry.  It makes absolutely no sense to bring in food from halfway across the globe.  It makes all the sense in the world to get your food products from the closest and best source.

    I don't think I'm alone when I say I don't want food produced in China, for instance.  First, we have the means to produce our own food.  Second, clearly we don't have the means (or the will?) to inspect food products coming in from other countries.  Third, I want to promote more industry in this country for a lot of reasons, and all of them are related to the well being of the people of this country.  

    as long as (5.00 / 1) (#11)
    by cpinva on Thu Nov 06, 2008 at 12:59:17 PM EST
    we allow products and services into this country, produced in countries operating on a thug level, then the answer is yes.

    or will some savvy businessman just set up a big kosher food operation in Mexico and undercut the whole market.

    there's nothing inherently wrong with free trade, as long as everyone's playing on a level field. they aren't. i feel certain someone in iowa thought it best to not aggressively enforce the labor laws on this company, for fear it would relocate its operations elsewhere.

    time and again we see states/localities make profers to companies, in hopes they'll move to that state/locality. why should labor law enforcement be any different?

    It sounds like (none / 0) (#4)
    by Steve M on Thu Nov 06, 2008 at 12:00:26 PM EST
    you stopped reading somewhere in the second paragraph, or you would have seen sentences like "Perhaps Agriprocessors deserved to go out of business."

    Perhaps you've (none / 0) (#8)
    by liminal on Thu Nov 06, 2008 at 12:23:50 PM EST
    never lived in a small town, or a company town, or the rust belt, or a rural area dominated by a single industry/company.  Maybe you've never felt the need to stay close to home for economic reasons (housing costs are much lower when you can subdivide otherwise marginal rural land as housing for an extended family), or family reasons (parents, grandparents, extended family).  

    There are plenty of reasons that workers would "choose to work for an immoral company."  To put food on the table.  To take care of their kids.  To take care of their parents.  To pay the mortgage - and there are many places where there are no other options.  

    T Chris makes an excellent point, in that our failure to enforce labor laws hurts local economies in the long run: the failure of Agriprocessors, which is directly tied to its criminal decision to repeatedly ignore labor laws, will hurt an awful lot of small, local businesses, and will destroy that town.  

     National business organizations convince small businesspeople that their interests are the same as these giant corporate entities, and that deregulation is a net positive for everyone, even though that is demonstrably not the case.  

    When states allow giant companies like Agriprocessors to ignoring environmental and labor protections, there are negative consequences to the business community, both local and regional. Enforcing responsible labor regulations is part and parcel of ensuring a stable, durable economy.  

    I found this article to be interesting (none / 0) (#9)
    by joanneleon on Thu Nov 06, 2008 at 12:29:08 PM EST

    Pennsylvania AFL-CIO's Massive Mobilization of Union Voters Puts PA in Win Column for Barack Obama

     "Working families are the real winners in this election," Pennsylvania AFL-CIO Secretary Treasurer Richard Bloomingdale said. "The Pennsylvania Labor Movement was unified on every level from: International Unions, local union leaders, Central Labor Councils, Area Labor Federations, Pennsylvania Alliance for Retired Americans and Working America helping secure victory for Obama, Biden and down ballot candidates," he said.


     The final push over the past four days included more than 30,000 union volunteers in Pennsylvania: visiting over 200,000 union households; making over 320,000 phone calls; and distributing over 750,000 worksite leaflets; urging union voters to get to the polls in support of Obama, Biden and worker friendly candidates down the ticket. Another key component in the final four days were the efforts of the Working America, the AFL-CIO's community affiliate which deployed 150 full time canvassers in 12 targeted Pennsylvania counties knocking on 10,000 doors a day.
    MarketWatch Link

    I wonder if those who purchased (none / 0) (#10)
    by sarcastic unnamed one on Thu Nov 06, 2008 at 12:31:44 PM EST
    AgriP's kosher foods will be happy paying the higher prices the other US kosher food producers have to charge due to using legal labor, or will some savvy businessman just set up a big kosher food operation in Mexico and undercut the whole market.

    Right (none / 0) (#13)
    by Steve M on Thu Nov 06, 2008 at 01:19:59 PM EST
    That's the heart of the matter, isn't it?  Does globalization mean we have to just give up on basic values like preventing child labor, or is there a way to enforce those values without seeing all the jobs go overseas?  It seems to me that avoiding the race to the bottom is easier said than done.

    Maybe if we didn't.... (none / 0) (#12)
    by kdog on Thu Nov 06, 2008 at 01:06:37 PM EST
    force employers to be immigration cops, with the accompanying extra costs, they wouldn't have to cut so many corners in regards to safety and child labor.

    Workers must bear some responsibility too...if your employer is employing children or creating an unsafe work enviroment or paying sub-standard wages, it is the duty of the workers to get the grievances addressed or strike.  I know that is not easy, with bills always hanging over people's heads...but it is their duty none the less.  Or they can choose to continue to accept any scraps they are offered.

    Cops? (none / 0) (#14)
    by Fabian on Thu Nov 06, 2008 at 01:22:14 PM EST
    Some employers are the exact opposite of cops!  When an employer deliberately seeks out undocumented workers specifically because they are the easiest to exploit, the least demanding, the cheapest labor - that's not enforcing the laws.  That's not obeying the laws.  That's breaking the law for profit.

    Not the opposite... (none / 0) (#15)
    by kdog on Thu Nov 06, 2008 at 01:30:12 PM EST
    I'd call those employers "dirty cops", but still cops.  I don't agree with it...let employers be employers, workers be workers...and let the state do their own policing of immigration laws.  I don't think you should have to give two forms of ID to get a job "on the books", all you should need is the ability to do the work.

    Similar to banks being forced to be money laundering cops by reporting all transactions over 10k, or being forbidden from processing their customer's transactions with online bookmakers.  I don't agree with that sh*t either.  We are a nation of informants.


    I believe (5.00 / 1) (#17)
    by Steve M on Thu Nov 06, 2008 at 01:42:41 PM EST
    that having your employer check your ID on day one is about the least intrusive way of enforcing the immigration laws, actually.  Now, let's say I'm unable to produce proof of citizenship, are they required to report me to the authorities?  I don't think that's the case.  I think they're just precluded from hiring me.

    Given that we have immigration laws in the first place - and maybe you don't believe that we should, which is fine - at least we should try to enforce them in the least intrusive manner.  The alternative would be something like putting no burden on employers, but having the immigration cops make a whole bunch of surprise visits and check everyone's papers.  That would be ugly.


    I hear ya... (none / 0) (#19)
    by kdog on Thu Nov 06, 2008 at 01:54:30 PM EST
    and I am basically an open borders guy, for the record.

    I really don't care where the person in the cubicle over or my neighbors came from and how they got here...they found a niche and are living in it and that's fine with me.

    So my preference would be to not have immmigration agents runing around trying to collar people who have broken no law outside of immigration law, period.  Live and let live.  And I certainly don't want every employer in the land being a de-facto ICE deputy...they already have a job to do, filling their workforce.


    How exactly do you want (none / 0) (#16)
    by Fabian on Thu Nov 06, 2008 at 01:39:03 PM EST
    to gather all this information?

    If the people who generate the data don't gather it, then who exactly will and how?  I mean, I suppose we could just tell Uncle Sam that we don't want to and it's up to the authorities to do it.  How would the authorities do it?  How would they gain access to the data?  

    Without data, there is no way to tell who is complying with the law or not?  Not just immigration law, but taxes and everything else.  Without data, without evidence, you can't prosecute.  Without prosecution, you can't enforce laws.


    Works for me:).... (none / 0) (#18)
    by kdog on Thu Nov 06, 2008 at 01:48:32 PM EST
    I'd do away with the payroll deduction form of taxation while we're at it...taxes should be paid, not taken.

    But absent my pipe dreams, the IRS or ICE can audit a company if they have evidence immigration or tax laws are being broken.  They should not expect employers to do their jobs for them, especially without the perks of badges and guns.

    In a free society, the job of law enforcement is supposed to be very difficult...we could catch more criminals if we did away with the rights against self-incrimination and unreasonable search and seizure too.


    Kosher meat (none / 0) (#20)
    by dman1800 on Thu Nov 06, 2008 at 02:45:11 PM EST
    I want to be clear that I am not an apologist for Agriprocessors.  We stopped purchasing their products six months ago, and would have stopped earlier if I could have convinced my wife to do so.

    Prior to the raid, they had about 60 percent of the market for kosher beef and about 40 percent of the market for kosher poultry.  This happened partly because their prices were lower than their competitors, which they were able to do because their labor costs were lower.  Another reason was because they were willing to ship their products to places which their competitors did not think were worth serving.

    Subsequent to the raid, Agriprocessors never got back to full production.  Consequently, there were shortages of product in various parts of the country.

    Now, the plant is out of production, at least for a while.  It is probably not possible for the other plants to increase their production in order to fully replace the lost capacity.  Therefore, we may expect shortages of kosher meat and poultry until the Iowa and Nebraska plants formerly operated by Agriprocessors reopen or someon opens another plant.

    100% (none / 0) (#22)
    by Abdul Abulbul Amir on Fri Nov 07, 2008 at 08:06:05 AM EST
    Prior to the raid, they had about 60 percent of the market for kosher beef and about 40 percent of the market for kosher poultry.

    And 100% for kosher pork.


    some regional coverage (none / 0) (#21)
    by DFLer on Thu Nov 06, 2008 at 04:25:09 PM EST
    The state assessed 10 million in fines

    From the Eastern Iowa Gazette (Cedar Rapids)

    Iowa Labor Commissioner Dave Neil announced the fine against the Postville kosher meat packer on Wednesday for violations that occurred in 2006, 2007 and the first half of 2008. They included charges that Agriprocessors failed to pay the final paychecks of 42 workers arrested in an immigration raid and unlawfully deducted $192,597 from workers' paychecks for frocks they wore on the job.

    "Once again, Agriprocessors has demonstrated a complete disregard for Iowa law," Neil said. "This continued course of violations is a black mark on Iowa's business community."

    The fines are unrelated to 9,000 child labor violations that Agriprocessors was charged with by the Iowa Attorney General's Office last month.

     The CEO arrested and hauled off to jail in handcuffs. Among the charges was hiring illegal workers and aiding in identity theft "FOR PROFIT" !

    More from the Gazette:

    After a week in which the Agriprocessors kosher meat processing plant in Postville was hit with nearly $10 million in state penalties; its former CEO Sholom Rubashkin was arrested on charges of conspiring to hire illegal immigrants; and the meatpacker was sued by a St. Louis bank saying it had defaulted on a $35 million loan, Postville residents were waiting for the next chapter.

    Despite the uncertain future of the plant and the jobs there, there were no signs Saturday of any Agriprocessors employees getting ready to leave Postville. Omer Mohammed, who came to Postville from Nashville, said, "It isn't easy to go home."

    Another woman, who declined to be identified, said she had moved to Postville from Indianapolis but has paid so much money in rent and other expenses that she can't afford to return home.

    "They sell you a dream, but they don't come through on their promises," she said.

    The woman said the employment agency that hired her was charging her $100 a week rent on a room she shares with three others, in a house that held a total of 13 tenants. A house in Postville typically rents for about $500 a month.