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April 2014, Volume 20, Number 2

Meat and Migrants

The Animal Slaughtering and Processing industry (NAICS 3116) employed an average 482,350 workers in 4,000 establishments in 2012. Total wages were $16.1 billion, or an average $645 a week. California had 21,000 workers in 300 establishments in NAICS 3116 in 2012. They earned a total $750 million or $690 a week.

Meatpacking plants have shifted from urban areas near consumers of meat to rural areas near the animals that they process on their "dis-assembly lines.' Until the 1980s, when most meatpacking plants were in cities, meatpacking wages were similar to those of the other manufacturers with whom meatpackers competed for workers.

Moving from cities to rural areas often resulted in lower wages, with entry-level wages typically $11 to $12 an hour in 2014. Many of the plants have several thousand employees and operate on two shifts, and many of the employees are immigrants. In many meatpacking plants, employee networks provide additional workers, as current workers refer their friends and relatives to fill vacant jobs. However, some meatpackers use recruiters to find workers until such networks are in place.

Meatpacking workers live in local communities, where their presence can lead to tensions. Many rural towns have a limited supply of rental housing, so that an influx of hundreds of immigrant workers can lead to overcrowding in garage conversions and mobile homes. Some communities have voted against subsidies to open new or reopen meatpacking plants because of these effects, while others have embraced newcomers.

Fremont, Nebraska, about 30 miles northwest of Omaha, is an example of a meatpacking city whose voters have reacted against immigrant workers in nearby meatpacking plants. Almost 60 percent of Fremont voters in February 2014 approved retaining an ordinance that prohibits landlords from renting to unauthorized foreigners and requires renters to apply for permits from the police. Renters receive rental permits by declaring that they are in the US legally.

The vote to keep the ordinance in 2014 was slightly higher than the vote to enact it in 2010.

Cargill Meat Solutions of Wichita, Kansas in January 2014 agreed to pay $2.2 million in back wages to 3,000 applicants for jobs at three meat packing plants who were not hired. The Department of Labor's Office of Federal Contract Compliance Programs alleged that Cargill hired 30 percent of male and 22 percent of female applicants for jobs in a turkey-processing plant, suggesting discrimination against women. Cargill called DOL's allegations "unfounded and without merit" and said it was settling to avoid prolonged litigation.

Cargill Meat Solutions closed a beef processing plant in Plainview, Texas in 2013, noting that a drought in the Texas Panhandle that reduced the supply of cattle made four beef-processing plants at least one too many. The United Food and Commercial Workers submitted a petition to the Department of Labor in March 2014 requesting Trade Adjustment Assistance for the 2,000 workers who lost their jobs, citing data that meat imports rose as packers imported meat to compensate for lack of US beef. DOL provided $2.1 million in a National Emergency Grant in June 2013 to help displaced Plainview workers.

The pork industry is consolidating. China's WH Group (formerly Shuanghui International Holdings) bought Smithfield Foods in 2013 for $4.7 billion. Smithfield processes 16 million hogs a year, and its Tar Heel, North Carolina plant is one of the world's largest, processing 32,000 hogs a day. The United Food and Commercial Workers Union won an election at Tar Heel in December 2008 by a 52-48 percent margin.

Almost 60 percent of the 100 million metric tons of pork consumed each year is bought in China, compared with 10 percent in the US. The US produces pork much cheaper than China because of cheaper feed and economies of scale, and WH Group hopes to take US pork production techniques to China. WH employs 120,000 people, including 40,000 in the United States.

Poultry. USDA is expected to propose regulatory changes in April 2014 that would allow poultry slaughterhouses to increase the speed of their lines from 140 to 175 chickens a minute and reduce the number of USDA poultry inspectors from four to one, with employees assuming more responsibility for detecting and removing suspect carcasses. The industry supports faster line speeds, but worker advocates in March 2014 persuaded 68 members of Congress to sign a letter expressing concerns about worker safety with faster line speeds. The industry counters that, in the 20 plants that have been running at 175 birds per minute in a pilot test, injury rates have declined.

Pilgrim's Pride was bought in 2009 by JBS for $800 million after a debt-fueled expansion left it vulnerable. JBS invested in labor-saving mechanization to increase production and profits at the second-largest US poultry processor. Pilgrim's eliminated 5,500 of its almost 37,000 jobs between 2010 and 2014, and now has 37 plants in the US and Mexico. Pilgrim's exports chicken from the US to 100 countries, including Mexico, which took about 20 percent of total US chicken exports of 3.2 billion tons in 2013.

The New York Times on March 9, 2014 published an expose of Henry's Turkey Service based in Goldthwaite, Texas. Henry's sent men with intellectual disabilities to work at a West Liberty Foods turkey processing plant in Atalissa, Iowa 100 miles south of Waterloo. (www.nytimes.com/interactive/2014/03/09/us/the-boys-in-the-bunkhouse.html?hp&_r=0)

In April 2013, Henry's was ordered by a jury to pay $240 million in damages in a suit brought by the Equal Employment Opportunity Commission, an award later reduced to $1.6 million, the maximum EEOC fine for employers with less than 101 employees.

Henry's was ordered in April 2011 to pay $1.8 million in back wages and liquidated damages for minimum wage and overtime violations. A federal court found that some of Henry's men were employed 40 hours a week and paid $65 a month. Henry's argued that West Liberty was the workers' employer because it issued checks to the workers, but the court found that Henry's issued W-2 statements to the workers, received their wages and Social Security benefits, and provided them with supportive services.

Under the Fair Labor Standards Act, employers can pay employees with disabilities less than the federal minimum wage. President Obama's executive order to raise the minimum wage to $10.10 an hour for workers employed under certain federal contracts ends this subminimum wage exception for the disabled for employers with federal contracts.


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