Warehouses: The New American Sweatshop

Wal-Mart Warehouse in Chile

Warehouse work, hidden by its very nature from the view of the general public, is increasingly a low wage job. Dave Jamieson, a reporter for the Huffington Post recently wrote an excellent piece on working conditions inside U.S. warehouses http://www.huffingtonpost.com/2011/12/20/new-blue-collar-temp-warehouses_n_1158490.html. While his discoveries about piece rate systems and subcontracting are not new, he shows how the industry has significantly changed in the last decade. The article reminded me a lot of my early work on the garment industry in Los Angeles, where mostly Asian and Latina workers toiled in sweatshops. It has become clear that warehouse work for corporations such as Wal-Mart, Target, and Amazon are examples of the new American sweatshop.

Like garment workers, warehouse workers endure unsafe working conditions, poor air quality, many repetitive motion injuries, and are largely non-union. Big box retailers like Wal-Mart have found a way to change the industry. A decade ago most warehouse workers were directly employed by the retailer or manufacturer, wages were higher and benefits were significant. Today, most big-box retailers subcontract the work out to Logistics firms, in this case Schneider, who then subcontract to staffing agencies who supply the workers. This system is very beneficial to the big-box stores because they are “not responsible” for the employees supplied by the staffing agencies.

The article cites Mark Meinster of the United Electrical Workers (UE) who states, “As late as the mid ’90s, you saw many warehouse jobs that paid a living wage.” Meinster continues: “In Chicago, we define that as $15.87 an hour. Now, we’re finding that the average wage is somewhere around $9 an hour. Only 4 percent of the workers get sick days. Many are on government assistance. Sixty-two percent earn below the federal poverty line.”

In some Southern California warehouses wages have fallen below minimum wage with no job stability or benefits. Furthermore, many of these warehouses hire workers from multiple staffing agencies, which makes it nearly impossible to unionize.

This model of subcontracting is not only occurring in the United States. Wal-Mart has also exported it to Chile. In November, Wal-Mart announced that they were going to subcontract their new warehouse in Chile to DHL. DHL has in turn subcontracted with three staffing agencies. Readers might remember from my earlier post http://oowsection.org/2011/11/15/labor-at-wal-mart-chile/#more-561, that in September, warehouse workers won a 30% wage increase with Wal-Mart in Chile. At the same time Wal-Mart was planning on undercutting them with the new warehouse. Now, warehouse workers in Chile who work for Wal-Mart directly have decent wages and good benefits, but the same is not true in the new warehouse. In the long run, Wal-Mart’s goal is clearly to break the union. Fortunately the union has a fight back plan.

Warehouse jobs have the possibility of being solid working class jobs with good wages and benefits, but retailers are rapidly changing the industry and exporting the sweatshop model globally. For more on the logistics industry see Edna Bonacich and Jake B. Wilson’s recent book Getting the Goods: Ports, Labor, and the Logistics Revolution.

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