In Case You Missed This... 'Ikea Joins The Race To The Bottom' - Salon

[WillyT]

Ikea joins the race to the bottom
We thought the Swedish furniture chain was the anti-Walmart. Turns out we were very wrong
BY DAVID SIROTA
FRIDAY, APR 15, 2011 07:01 ET

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Buried in the Times report is the troubling story of why Ikea opened a plant in the United States in the first place. No, the decision wasn't made to take advantage of superior workforce skills or productivity -- positive attributes that once drove our manufacturing sector and built our middle class. Instead, it was made to exploit our decreasing wage levels and weak worker protections.

Though company factories in Sweden produce the same bookcases as the plant in Virginia, the Times notes that "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 (while) full-time employees in Danville start at $8 an hour with 12 vacation days" -- and that doesn't count the one-third of Danville workers who are paid even less because they are deliberately subcontracted through temp agencies.

Ikea’s exploitation motive evokes memories of General Electric's Jack Welch. He famously said that in an era without strong international unions and with standards-free trade pacts, profit-maximizing companies would end up putting "every plant you own on a barge" and trolling the world for the lowest wages and workplace conditions, knowing they would no longer face tariff costs.

That's what so many formerly American manufacturers did when they picked up and left the United States after NAFTA and the China trade deal reduced tariffs, and what more will likely do if the Obama administration's new Colombia free-trade pact passes Congress. That's what companies are doing by leaving China for the even lower wages of Vietnam and North Korea. And that's what Ikea did in moving Swedish production facilities to Virginia (and probably somewhere else if Danville workers dare demand some respect).

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More: http://www.salon.com/news/politics/war_room/2011/04/15/sirota_ikea

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