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Ikea's U.S. factory churns out unhappy workers

qweerblue

Registered Member
From looking at 3) and 5) one might conclude that you're assuming that the employees who are paid $8 an hour at Ikea aren't working hard. I don't think that anyone who works as a receptionist expects to be paid $20 an hour, especially when the boss takes a loss for it. At the same time, though, if you want someone competent answering the phones at your office, you probably should be willing to pay more than $8 an hour. There's a lot of room in-between.

I agree with you that hard work should be rewarded and we shouldn't punish those who are willing to take a chance and invest, but a situation such as Costco only making half the profit that Wal-Mart does (I'm just pulling that out of my ass as a rough example, I have no idea what the actual numbers are) so they can pay their employees a good wage is hardly punishment.
Costco is actually one of the most profitable retailers in the US. Here's a snippet from an article I just read:

And [CEO] Sinegal says he's also built a loyal work force. In fact, Costco has the lowest employee turnover rate in retailing. Its turnover is five times lower than its chief rival, Wal-Mart. And Costco pays higher than average wages -- $17 an hour -- 40 percent more than Sam's Club, the warehouse chain owned by Wal-Mart. And it offers better-than-average benefits, including health care coverage to more than 90 percent of its work force.


Costco doesn't have a P.R. department and it doesn't spend a dime on advertising. There's a real business advantage to treating employees well, Sinegal said. "Imagine that you have 120,000 loyal ambassadors out there who are constantly saying good things about Costco. It has to be a significant advantage for you," he explained.


But the most remarkable thing about Sinegal is his salary -- $350,000 a year, a fraction of the millions most large corporate CEOs make. "I figured that if I was making something like 12 times more than the typical person working on the floor, that that was a fair salary," he said.



(he does own a whole bunch of Costco stock, but his salary seems reasonable to me, as does his logic)



Costco CEO Finds Pro-Worker Means Profitability - ABC News
http://www.nytimes.com/2010/05/28/business/28shop.html

Costco's Profit Rises 17% - WSJ.com


Costco's profits have been rising steadily, and in early 2010, it posted a 46% increase in quarterly profits, and, as of December, 2010, their profits had risen another 17%. From what I can figure, their profits are in the billions. They also continue to open warehouses in the US, as opposed to slashing pay and jobs.



So, yes, it is possible to treat workers fairly and equitably while also maintaining the scared profit line for executives and share holders.
 

Jeanie

still nobody's bitch
V.I.P.
And I have a problem with worker exploitation but that's not the issue I addressed. I only initially addressed the $8/hour issue. I don't consider that exploitation if the job that pays $8/hour is a minimum skills entry level job. I don't care what the profit margin is, to me that is irrelevant. What is relevant is what the going rate is for that job.

I know the article stated the median is around $15/hour, but it didn't differentiate the different kinds of jobs that figure entails.
It's not just the low wages that are problematic with the U.S. Ikea plant, there's also the mandatory overtime.
 

CaptainObvious

Embrace the Suck
V.I.P.
Costco is actually one of the most profitable retailers in the US. Here's a snippet from an article I just read:

And [CEO] Sinegal says he's also built a loyal work force. In fact, Costco has the lowest employee turnover rate in retailing. Its turnover is five times lower than its chief rival, Wal-Mart. And Costco pays higher than average wages -- $17 an hour -- 40 percent more than Sam's Club, the warehouse chain owned by Wal-Mart. And it offers better-than-average benefits, including health care coverage to more than 90 percent of its work force.


Costco doesn't have a P.R. department and it doesn't spend a dime on advertising. There's a real business advantage to treating employees well, Sinegal said. "Imagine that you have 120,000 loyal ambassadors out there who are constantly saying good things about Costco. It has to be a significant advantage for you," he explained.


But the most remarkable thing about Sinegal is his salary -- $350,000 a year, a fraction of the millions most large corporate CEOs make. "I figured that if I was making something like 12 times more than the typical person working on the floor, that that was a fair salary," he said.



(he does own a whole bunch of Costco stock, but his salary seems reasonable to me, as does his logic)



Costco CEO Finds Pro-Worker Means Profitability - ABC News
http://www.nytimes.com/2010/05/28/business/28shop.html

Costco's Profit Rises 17% - WSJ.com


Costco's profits have been rising steadily, and in early 2010, it posted a 46% increase in quarterly profits, and, as of December, 2010, their profits had risen another 17%. From what I can figure, their profits are in the billions. They also continue to open warehouses in the US, as opposed to slashing pay and jobs.



So, yes, it is possible to treat workers fairly and equitably while also maintaining the scared profit line for executives and share holders.
So in other words, the market has rewarded Costco for being good stewards of wealth, right? While if the accusations against Ikea are proven true, ie the discrimination claims and word gets around about how unfair they are, their bad decisions would result in losses, right?
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It's not just the low wages that are problematic with the U.S. Ikea plant, there's also the mandatory overtime.
The $8/hour I took as true because that can be easily proved. As far as mandatory overtime that isn't and is just an accusation. So I didn't comment on it.
 
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qweerblue

Registered Member
1) First off I made no comments about any of the business practices regarding the accusations against Ikea in the article. I have no idea whether any of the alleged racism exists but if it does, that is handled by the court system. Discrimination claims are made every day. Some have merit, some don't. Some result in favorable jury verdicts, some don't.

2) The market does punish those who are bad stewards of wealth and does reward those who are not. Of course there are exceptions, most notably when the government creates an artificial demand, but my comment was made in the general sense.

3) I don't see the logic of paying people beyond their skill set. While starting a business is to service customers, the goal is to make profit. If I open up my own law office I don't see the logic of paying someone to answer the phone $20/hour and me, being the owner of said office, takes a loss. That kind of rationale seems rather silly to me.

4) I wouldn't necessarily consider those who make maybe $50,000 to $100,000 lucky. In most instances there is much more to it that luck. And I disagree we have no power to influence the market in any way.

5) I don't know of anyone who believes in unfettered capitalism although I'm sure those people exist. I don't have a problem with regulation to some extent and for certain things and I'm willing to bet the vast majority of people agree. What I do believe in is rewarding those who work hard, or obtain a skill, or take a chance and invest. I don't believe those who do so should be punished to reward those who do not. I've delivered pizza, I've swept floors, I've bussed tables, and I've even cleaned bathrooms. I made a decision I would not do so for the rest of my life. If there was an Ikea plant here and I worked there for $8/hour I would have done so in futherance of something else. But maybe that's just me.
Part of me, as always, understands and respects your rationale, CO, but part of me, a very big, vocal part of me, still feels as if it is insanity to continue defending a system that is so markedly unbalanced and tilted to favor those who already have power and influence over the least among us. And I really will never understand how it is that we have all accepted that the whims of "the market" dictate our lives. The vast majority of us are so far removed from the actual points of power, from Wall Street, from shareholders, that I really don't understand how it is that you can suggest that we, that is, normal, every-day, citizens, have any influence over the framework that governs our lives. The notion that we "vote with our dollars", so to speak, that we can simply avoid supporting companies that behave badly and this will somehow force them to re-evaluate and re-align their priorities, feels like a fairy-tale to me.

It seems as if the blame is always, or at least quite often, laid at the feet of the government, or on the backs of workers and consumers, yet CEOs and executives get lifted off the hook with arguments that elevate the "free market" to some kind of magical entity that, if only allowed to barrel along unfettered, or mostly unfettered, would lead to the pot of gold at the end of the rainbow for everyone. I abhor the inherent ugliness of a system that, at its core, is built on the notion that increasing profits while constantly reducing the bottom line--wages, benefits, etc--is the best system for the majority. Those arguments are then used to rationalize low-pay, sub-standard, if any benefits, and worker insecurity.
 

Jeanie

still nobody's bitch
V.I.P.
So in other words, the market has rewarded Costco for being good stewards of wealth, right? While if the accusations against Ikea are proven true, ie the discrimination claims and word gets around about how unfair they are, their bad decisions would result in losses, right?
Unfortunately, no, probably not. It certainly hasn't been the case for Wal-Mart. People still shop there because they can spend billions on their asinine "Save Money Live Better" advertising campaign, and people are stupid enough to fall for it because they have a smiley face as their logo.
 

CaptainObvious

Embrace the Suck
V.I.P.
Unfortunately, no, probably not. It certainly hasn't been the case for Wal-Mart. People still shop there because they can spend billions on their asinine "Save Money Live Better" advertising campaign, and people are stupid enough to fall for it because they have a smiley face as their logo.
Things aren't cheaper at Wal-Mart? They don't provide goods at cheaper prices at places that wouldn't ordinarily have such easy access to those goods?

Businesses go out of business all the time Jeanie. Most often times because they are unable to compete. You may not like how Wal-Mart conducts their business and that's fine. I do see some positive things about what they do and that's why they've stayed in business.
 

Jeanie

still nobody's bitch
V.I.P.
Things aren't cheaper at Wal-Mart? They don't provide goods at cheaper prices at places that wouldn't ordinarily have such easy access to those goods?

Businesses go out of business all the time Jeanie. Most often times because they are unable to compete. You may not like how Wal-Mart conducts their business and that's fine. I do see some positive things about what they do and that's why they've stayed in business.
I didn't say that Wal-Mart doesn't have low prices. They may or may not be lower than other retailers; in Michigan we are lucky enough to have Meijer to compete with Wal-Mart. What I am saying is that there is more to "living better" than saving 5 cents on a can of tuna. But people can't see past the price at the bottom of the receipt.
 

SmilinSilhouette

Registered Member
This makes no sense at all. The whole point of Ikea is that it's inexpensive, at least that's why I shop there. So if they can pay Swedish factory workers $19 an hour and still sell their stuff here at such low prices, why do they have to pay American workers $8 an hour? I don't understand.
You are comparing the minimum wage in Sweden with a starting wage for entry level unskilled positions. Maybe that is one of the many factors that was considered when they decided to move some production here.
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Did you read the article? It stated that Ikea opened a manufacturing facility in the U.S. in order to save on shipping costs. It didn't say anything about cheaper production and operation costs.
Yes, I did. I found it pretty one-sided. Do you believe this is the sole reason or could there be a multitude of factors that led to their decision?
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It's not just the low wages that are problematic with the U.S. Ikea plant, there's also the mandatory overtime.
Obviously there is no such thing as mandatory overtime unless they have slave labor. Once again, it is the choice of the employee to show up and continue their agreement with the employer.
------
I didn't say that Wal-Mart doesn't have low prices. They may or may not be lower than other retailers; in Michigan we are lucky enough to have Meijer to compete with Wal-Mart. What I am saying is that there is more to "living better" than saving 5 cents on a can of tuna. But people can't see past the price at the bottom of the receipt.
What is the difference between Meijer and Wal-Mart? Don't they both do the same thing? When Meijer is demonized by the media and the political left will they suddenly become an evil big business as well?
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@ all: Will you choose to not buy from IKEA based on this article?
 
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Jeanie

still nobody's bitch
V.I.P.
What is the difference between Meijer and Wal-Mart? Don't they both do the same thing? When Meijer is demonized by the media and the political left will they suddenly become an evil big business as well?
------
@ all: Will you choose to not buy from IKEA based on this article?


For starters, Meijer isn't the largest importer of Chinese goods to the U.S. Wal-Mart is. I'm not saying Meijer is perfect, just less evil. I can probably find more goods made in the U.S. at Meijer than I can at Wal-Mart. That's one of my many problems with Wal-Mart, not just their mistreatment of workers, but that their low prices come at the cost of the loss of U.S.-based manufacturing jobs.
 

shelgarr

Registered Member
@ all: Will you choose to not buy from IKEA based on this article?
Nope won't affect my decision. (however, I quit shopping there a several years ago because the product line doesn't suit me).

I'm just grateful Ikea is making a go of it here. If the LATimes ruins that for them...pushes them into practices that they cannot absorb....shame on The Times. This inflammatory article though isn't about minimum wage, or executive salaries or how adjusting those two figures is the solution. There's some disgruntled employees (would like to know how many quit from behing unhappy versus how many stay) and some reporter dug deep enough to cause omnipotent conclusions. Well, there are unhappy employees everywhere!!! On the other hand, Ikea might be making some anti-employee-friendly decisions. It happen once to me, and to my husband. Worker and company all the sudden become incompatible. BFD. Negotiate an envionment you like, or get out. To suggest that forcing a higher minimum wage, or a lower executive salary, or a union, or lawsuits about exploitation, or a lessened profit margin is counter productive.
 
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