Date of publication: October 9, 2009
Source: American Prospect
Author: Nancy Cleeland
» View article online [1]
Food workers increasingly exist in a legal limbo with no protections for wages, benefits, job security, or life and limb. Why are employers like Hershey off the hook?
On the morning of July 8, a temporary worker in Camden, New Jersey, slipped and fell into an 8-foot-deep vat of liquid chocolate, where he was struck by a large mechanical mixer and killed. His name was Vincent Smith II and he was 29 years old. He'd recently moved to Camden from rural Pennsylvania in search of work and soon learned that the only way into the local warehouses and factories was through a temp agency. The chocolate plant was his first assignment. He'd been on the job two weeks.
The batch that Smith was mixing up that day was destined for the Hershey Company, which no longer makes its own chocolate. Since 2002, the iconic brand has gradually outsourced all its production to U.S. contractors and new facilities in Mexico, closing its own factories and eliminating some 3,000 union jobs.
The relationship between Vincent Smith and the Hershey Company was at once clear and tenuous. He was, after all, doing the company's work. On the other hand, he was hired by the Heads Up Staffing Service to report to warehouse owner Lyons & Sons, which provided him to Cocoa Services, Incorporated, the processor doing business with Hershey.
Each step in the chain served to separate Smith from Hershey, erasing responsibility, and making it easier to squeeze costs in a way that did not visibly reflect badly on the Hershey Company. Smith was a day-to-day worker making barely more than minimum wage, with no health insurance, sick time, or promise of future work. His union counterparts at Hershey factories were far more expensive.
***
Hershey was not alone in seeking savings by having others do its work. In fact, it was relatively late to the game. Much of the food-processing sector, like manufacturing in general, has embraced outsourcing as a way to cut costs in the face of global competition. This often includes a combination of subcontractors and temporary employees.
"There was phenomenal growth in the '90s," says Nik Theodore, who directs the Center for Urban Economic Development at the University of Illinois at Chicago and has extensively studied temporary labor agencies. "For certain occupations, like hand packers, temp employees have become a substantial segment of the work force."
In this new world, workers are paid only when needed. There are no more messy layoffs -- merely the end of an assignment. All the risks are shifted to workers. Staffing agencies often tout their services as giving employees flexibility and variety, but Theodore's research shows they are worse off by many measures.
"The agencies generally operate on very thin margins, so one of the first things to go is any kind of safety training," he adds. "And health benefits become a cost that is just too high to bear."
Wages aren't so hot either. Using 2004 Bureau of Labor Statistics data, Theodore and colleagues found that of the top 20 occupations supplied by temp agencies, all but three paid less than direct employers. The three exceptions were in different types of nursing, the result of a chronic shortage of skilled nurses.
In all the rest, the difference between the average national wage and that paid to temps was substantial. On average, temps like Smith working in assembly and fabrication jobs earned about $4.66 less per hour than their permanent counterparts; for every dollar paid to a permanent staffer, a temp received about 50 cents.
With the recession, labor conditions have only worsened. "These days you have a very large work force that basically has to take the job on offer," Theodore says. "You take what's available, even if it's dangerous and even if it's low paid."
Safety is of particular concern in food-processing plants, which often feature slick floors, powerful machinery, and raised platforms. Any one of those features can be deadly. Falls are the second leading cause of death on the job in the U.S., after highway accidents, according to the Bureau of Labor Statistics. Even as the overall occupational death rate has dropped, the toll from falls has been steadily rising for 15 years -- with 847 reported fatalities in 2007.
"In many of these plants you have bits of food flying everywhere, and it gets on the floor," says Jackie Nowell, occupational safety and health director of the United Food and Commercial Workers union (UFCW), which represents workers in beef- and poultry-processing plants, among others. "That makes it very dangerous. Employers struggle with this issue all the time. And it's a very big concern for workers."
Worries about safety have driven many organizing campaigns and contract negotiations in food processing. Unions representing workers in the industry invest in health and safety research and advocacy and include safety language in contracts. "There's a great history of it," Nowell says. "I've got old contracts from the '40s that talk about safety committees. It was important that there be a system that workers could go through. They learned to look for hazards and felt comfortable reporting them."
But without job security or the support of a union, temp workers are seldom forthcoming with their concerns, she adds. And when accidents do happen, the victim's interests sometimes languish as blame is passed around. "There has to be a better definition of who's the employer," Nowell says. "There has to be a closing of the loop."
***
The explosion of food-work outsourcing- -- either to foreign operations or third-party domestic suppliers -- has been devastating to membership of UFCW and other unions, making it far more difficult to pursue safety work.
"We lost 1,500 people at Hershey in a two-year period," says Ray Scannell, research and education director for the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union. "A total of 3,000 [Hershey] union workers are gone in the United States and Canada, including the Teamsters and the Steelworkers in California. Kraft and Nabisco are outsourcing and closing factories as we speak."
Once lost, those union jobs are probably gone for good, because temps and contract workers are almost impossible to organize. Under a 2004 ruling by the Bush-era National Labor Relations Board, such workers can join a worksite union only if the employment agency and the worksite employer agree to allow it. The ruling reversed a 2000 Clinton-era decision that gave that power to the workers.
Scannell recounts numerous attempts to break through the requirements without success. "We tried to organize a potato-chip plant in Michigan. The workers came to us and we went to organize it, but there was no employer to organize. Each department was with a different [temp] agency. There was a bakery in L.A., same thing. Packaging, baking, etc., all reported to different agencies. And many of the workers themselves were undocumented. ... How do these workers protect themselves?"
The death of Vincent Smith can be understood as the consequence of a determined effort by corporations to minimize responsibility for the workers who make their products. Without a government response that allows contingent workers to organize, strongly enforces health and safety standards in contract factories, and holds the ultimate employers liable for the behavior of their subcontractors, such workers will continue to be vulnerable.
***
As Smith learned when he arrived in Camden in search of employment, the options are limited for a 29-year-old black man with no college education, especially during the worst recession in half a century. He came to Camden to live with an aunt, hoping the industrial parks that surround this port city on the Delaware River would offer a better shot at a job than he was finding in Northumberland County. "He was just trying to make an honest living," Teresa Smith says of her nephew. "He just wanted to work, and he couldn't find it."
Vincent Smith dreamed of a permanent, full-time job with security and benefits, but his aunt knew what he was up against: She herself had gone through a temp agency to find her current job, on the graveyard shift at another local factory. "That's the only way to get work around here," she says.
Her nephew eventually signed up with Heads Up Staffing, one of more than a dozen labor providers in the area. On his first assignment, he was sent to a sprawling brick warehouse on the eastern edge of Camden where Campbell's Soup was once made. Now the warehouse smelled of chocolate from bags of imported cocoa beans and dried cakes of processed unsweetened chocolate. Camden is a leading port of entry for cocoa products, and the region is dotted with such warehouses and processing plants.
Though the Lyons & Sons warehouse was enormous, the food-processing operation was small. It was staffed by two permanent and four temp-agency workers who moved back and forth between warehouse work and the chocolate-melting tank, according to spokesperson Kevin Feeley, who was hired in the aftermath of the fatality. Feeley added that the temp label was "a bit of a misnomer. Some temps have been there five, six, seven years."
The melting tank was a tiny part of the operation, Feeley says. It involved melting industrial-sized bars of pressed, unsweetened chocolate into liquid for delivery to factories in tankers. It's a procedure that would not exist at an integrated chocolate maker, where the liquid -- known as chocolate liquor, made from the pressed inner kernels of cocoa beans -- would go directly into the mixing and molding process.
The batch that killed Vincent Smith was a special order from Hershey, which delivered the blocks of chocolate to be melted. Because the blocks were unusually small, the normal procedure for melting them had to be altered, Feeley says. They had to be hand-tossed into the vat through an unprotected hole in the floor of the platform, rather than being fed through the usual grinder.
According to Feeley, this is what happened that morning: At 10:30, the workers returned from their morning break. Smith was the first up on the platform, getting ready for the shift and talking with co-workers on the floor. As he chatted, Smith seemed to take a step forward and fell through the opening, the workers told Feeley. "I looked at that hole and was surprised that a man could fit through it," Feeley says.
The liquid below was heated to 120 degrees. Smith floated on its surface. He was probably killed by a blow to the head from a mechanic paddle, city investigators said. Still, co-workers grabbed his arm and clothes and tried repeatedly to pull him out of the vat. But Smith was a large man, and they couldn't get enough leverage. One fellow temp was still holding on to his belt when firefighters arrived 10 minutes later.
A federal Occupational Safety and Health Administration investigation is underway, and production at Cocoa Services has been halted pending discussions with federal, state, and local officials. The city's own investigation found that Lyons & Sons was operating under an expired business license and that Cocoa Services had never informed officials of its melting operation. John Lyons is listed as the president of both businesses. "They were zoned for cocoa-bean storage in 1996," Camden's code-enforcement director, Iraida Afanador, told The Philadelphia Daily News. "My concern is that they are obviously operating a plant."
Teresa Smith says her family has retained an attorney. "We don't want another family to go through what we've had to go through," she says. "We understand that people need work, but we don't want his death to be swept under the carpet."
On the day of the accident, she and other relatives stood outside the gates of the warehouse for hours, barred from entry and confused about which company they should even be talking to. The dead worker's father, Vincent Smith Sr., rambled to television cameras as he tried to absorb the sudden and incomprehensible change in his life. How could his son have been killed this way? "He went to a staffing service and, you know, got the job here and, um, he died," he said.
The Camden warehouse is only two hours east of Hershey, Pennsylvania, but a world away from "the sweetest place on Earth," an image cultivated by the company's paternalistic founder. Milton Hershey built a town with street names like Cocoa and Chocolate and touted his good deeds, including the creation of a fully subsidized school for orphans. The folklore -- along with an amusement park and factory tours -- is now part of the brand. A town brochure greets visitors: "Welcome to Hershey, Pennsylvania, home of the world's largest chocolate factory. This is where HERSHEY makes its famous chocolate." But in fact, little chocolate is made here anymore.
Dennis Bomberger is business manager of Local 464, the Chocolate Workers Union at the original Hershey plant. He notes that, in a back building, about 60 workers at a time would be sorting, roasting, hulling, and grinding cocoa beans, in the process turning them into the rich chocolate "liquor" that would later be combined with sugar and milk for Hershey's Kisses, bars, and other familiar sweets.
"It's empty now," he says of the building. "Well, not completely. They still keep a couple of folks on back there, just to receive the tankers."
Many in the town that Hershey built trace the unwanted change back to the hiring of a new CEO in 2001, when Richard Lenny, a former Kraft Foods executive, became the first outsider to run the insular company. From the beginning, he made clear his intentions to outsource work. Friction with the union spilled over into a 44-day strike in 2002. The union declared victory in that fight, which revolved around wages and health benefits, but it was the beginning of a steady decline in its membership and influence.
Lenny relentlessly outsourced pieces of production, starting with the creation of the chocolate liquor. His plans culminated with the Global Supply Chain Transformation program announced in 2006, which got rid of almost all remaining production.
From the beginning, Lenny had to address the risks of outsourcing all chocolate production to the company's image, but he insisted the savings in labor costs justified the gamble. So far, he has proved his critics wrong. The past fiscal year -- the final year of the outsourcing plan -- saw an increase in sales and earnings.
During a July 23 conference call to discuss second-quarter results, market analysts congratulated the CEO on the better-than-expected profits and on his progress in outsourcing. Although it had happened just two weeks earlier, the death of Vincent Smith was not mentioned in the call.