Raids could force meatpackers to raise worker pay
By HENRY C. JACKSON | Associated Press Writer
1:51 PM CST, December 5, 2008

DES MOINES, Iowa - An Immigration raid and legal action have left a northeast Iowa kosher slaughterhouse reeling, but they're not the reason the plant has struggled to remain open.

Instead, a company that once was the nation's largest provider of kosher meat has crumbled largely due to a simple problem: an inability to hire enough workers.

Since 389 employees were arrested in a May Immigration raid, Agriprocessors has tried everything to replenish staff at its Postville plant. It has hired employment firms, recruited homeless people from Texas and even flown in workers from the tiny island nation of Palau. But the plant has never approached its original staffing of about 1,000 people.

It's a problem that could increasingly face meatpackers across the country if Immigration agents continue to conduct mass raids that lead to staffing shortages. Unless the incoming Obama administration stops such raids, companies could be left choosing between two risky alternatives: hire illegal workers and chance a raid or increase salaries to attract and retain legal workers but at cost of higher consumer prices.



"I think it is a big problem, a huge issue for companies," said Lance Compa, a Cornell University professor who has studied workplace Immigration issues.

"What (the companies) are doing now is scrambling. A lot of them are turning to employer agencies to fill their workforce. But if they want a stable workforce, they'll almost certainly need to raise wages and benefits."

The action at Agriprocessors followed December 2006 Immigration raids at Swift & Co. plants in Iowa and six other states that resulted in nearly 1,300 arrests. Swift said those raids cost the Greeley, Colo.-based company as much as $50 million because of delays in returning to full production and ultimately led to a decision to sell out to the Brazilian company JBS S.A.

At Agriprocessors, the fallout has been worse: With staffing level at half of pre-raid levels, the plant drastically cut production and then suspended it completely. After filing for bankruptcy protection, the company has managed to restart its poultry line with a skeleton crew.

As its largest employer has struggled to survive, little Postville, Iowa, has descended into what even city officials have called a humanitarian crisis. Businesses have closed, rental houses became vacant and area churches said they could no longer meet the need for donations of food and clothing.

Although no one knows how many illegal immigrants work in meatpacking, Don Stull, a University of Kansas professor who studies Immigration issues, said academics believe about 25 percent of meatpacking employees across the nation are undocumented.

Industry officials downplay the size and significance of the illegal immigrant workforce, other than to say companies are obligated to hire eligible employees. Janet Riley, a spokeswoman for the American Meat Institute, said hiring legal workers "makes good business sense."

Still, some in the industry acknowledge that it takes hard work -- and at times more money -- to retain a legal and well-trained workforce.

Gary Mickelson, a spokesman for Tyson Foods, said the company has had to pay a premium to stay at the forefront of employee verification efforts and ensure workers are in the country legally. He added that Tyson's commitment to worker verification predated large-scale Immigration raids common for the last couple years.

"There are additional costs involved in going beyond what is required by the federal government to verify the documents of the people we hire," he said. "We want to make sure we remain in compliance with the law."

Fighting turnover, Mickelson said, has also led the company to "continually explore ways to improve worker recruitment and retention."

The meatpacking industry has long relied heavily on immigrant labor, as people new to the country filled jobs that required almost no education, minimal language skills and little training. But some blame wage reductions and a decline in union membership for changing the industry in the past several decades.

"There was a time when meatpacking plant jobs paid well, when there was no difficulty at all in obtaining native born workers " said Stull, the Kansas professor. "Beginning in the 1960s, that changed. The wages were driven down and plants were moved to states where being a union member wasn't required."

When adjusted for inflation, meatpacking wages have plummeted since the 1960s, according to the U.S. Bureau of Labor Statistics. Slaughterhouse jobs paid an average of $2.60 an hour in 1960, which when adjusted for inflation would be about $19 in current dollars.

Slaughterhouses paid an average of $11.81 an hour in 2007, according to the U.S. Bureau of Labor Statistics.

The decline in wages has been especially steep since around 1980, when the $8.49 average hourly wage would now be worth $22.31 when adjusted for inflation.

Riley, with the American Meat Institute, said wage levels were largely a result of the market.

"The market sets the wages," she said. "Like all employers, meat industry employers pay what is required to attract workers."

However, Compa, the Cornell professor, argued that the situation in Postville was an extreme example of a problem facing the industry -- a reliance on undocumented workers. Few companies likely rely on illegal workers for nearly half of their workforce as was the case with Agriprocessors, but those immigrants play a large role in many plants, he said.

"They're in a bind," he said. "They don't concede it but they know they have a lot of undocumented workers and they're a little bit frozen about what to do."

Although it could cost companies more in wages, Mark Lauritsen, packing house director for the United Food and Commercial Workers union, said he believes the industry could save money by increasing its wages.

The union has tried unsuccessfully to organize at Agriprocessors' plant in Postville.

"The truth is, turnover in these facilities cost them in productivity and money," he said. "So it's to nobody's advantage to have these high turnovers (that raids produce). That's why you hear me say, let's find a way to make a job safer and easier and make it pay better because at the end of the day when people stop turning over, productivity goes up."

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