Rural Laws: April, 2001 - Number #2

Poultry. The US Department of Labor in January 2001 said that a February-August 2000 survey of 51 of the 174 US poultry processing plants by its Wage and Hour Division found none of the plants to be in full compliance with the Fair Labor Standards Act (FLSA), the Migrant and Seasonal Agricultural Worker Protection Act (MSPA) and the Family and Medical Leave Act. The DOL investigative survey found that many workers were not paid overtime wages as required or had unlawful deductions taken from their pay.

The US Supreme Court ruled that live-haul crews, workers who catch chickens in grower sheds so that they can be taken to plants for processing, are nonfarm workers entitled to FLSA protections, including overtime wages after 40 hours of work a week. Many live-haul crews are organized by contractors who are supposed to register with DOL, but DOL found that only 20 percent of live-haul contractors who were subject to MSPA were registered. On the other hand, DOL found that 90 percent of the housing employers provided to poultry workers met safety and health standards, over 80 percent of the crews were transported in safe vehicles, and 60 percent of live-haul workers were paid all wages owed when due.

Cagle's-Keystone Foods, which received $40 million in tax breaks and grants to establish a plant in Clinton County, Kentucky, was accused of hiring workers under the age of 16 to work on "dis-assembly lines" that process 91 chickens a minute. Cagle's, with a 1,400-person work force, was promised $3,000 in grants and tax breaks for each worker hired from Wayne, Clinton and Jackson counties. Many of the local workers who were hired by Cagle's soon quit. They were replaced by immigrants, so that in 2001, about half of the plant's workers were Hispanic. Some of the immigrants, including children, used false documents to get hired.

The U.S. Labor Department is considering raising the minimum age for working in chicken processing plants from the current 16 to 18.

Four poultry workers at Barber Foods in Maine filed a class-action suit in January 2001 against the company, alleging that Barber did not pay them for the time they spent to put on required safety equipment. Barber, considered a model employer, has 750 full-time employees who earn $9 to $13 an hour. About half are immigrants. The INS in April 2001 arrested 135 unauthorized workers earning $8.50 to $9 an hour at Empire Kosher Poultry in Mifflintown, Pennsylvania.

In Arkansas, the number of adult ESL students rose from 1,200 to 5,400 in the 1990s. The state created an English-as-a-Second-Language program, with funding expected to come from employers in partnership with adult-education/literacy providers.

Meatpacking. Some 400 workers from Mexico and Central America staged a wildcat strike against northeastern Colorado's largest employer, Excel Corp., a beef packer with 2,050 employees and a local payroll of $46 million a year. The workers cited disputes with the company and the union that represents them, Teamsters Local 961. Union negotiators had just reached agreement with Excel on a new six-year agreement. The wildcat strike was mounted by workers opposed to the new agreement, and led to two of the strike leaders being arrested at the request of local union leaders.

Excel workers ratified the new contract that raised wages from $9.40 to $10 an hour on a 300-216 vote; by the end of the five-year contract, the base wage will be $11. Families will have to pay $400 a year for health insurance under the new contract, with the cost rising by $100 a year.

Excel, the second-largest US beef packer, processes 4,200 cattle a day at the plant. The workers average $9.60 an hour and $25,000 a year, with overtime. A 1999 Morgan County Labor Force Survey found that local residents would work at Excel for at least $15 an hour, $1 an hour more than the average hourly earnings of US private sector production workers, which in 2001 were $14. Hispanics began entering the work force when Excel added a second shift in 1996.

Iowa Governor Tom Vilsack in December 2000 designated Fort Dodge, Mason City and Marshalltown as "model communities" for immigration, providing them with state funds to plan for immigrant recruitment and integration. In April 2001, Vilsack said encouraging new immigrants to move to Iowa is vital to a healthy state economy, but that meatpacking was an industry that was "using" workers.

During the January 2000 presidential primary in Iowa, FAIR ran ads pointing to Storm Lake, Iowa as an example of how immigration linked to meatpacking can transform a community's population (www.fairus.org). Some local residents used the resulting publicity to argue that their city benefited from immigration and diversity. Storm Lake's school enrollment rose 17 percent in the 1990s, while 70 percent of Iowa's schools are losing students. Jim Gossett of the Storm Lake Area Development Corp. said: "We think we can be a model for other communities wanting to open their doors to immigrants."

Jurgis Rudkus, a Lithuanian immigrant meatpacker in Chicago, was the hero of Upton Sinclair's 1906 novel "The Jungle." Sinclair's description of meatpacking moved President Theodore Roosevelt to order an investigation that led to the passage of the Pure Food and Drug Act of 1906. The meatpacking industry moved west during the 20th century and today employs about 150,000 workers.

Agribusiness. Tyson Foods Inc., the leading poultry processor, in January 2001 announced a buy out of IBP, the largest US beef processor and the Number 2 pork processor- IBP is second only to Smithfield in pork. In March 2001, Tyson withdrew the buy-out offer, citing accounting irregularities at IBP.

Per capita consumption of chicken first surpassed per capita consumption of pork and beef in the early 1970s, largely because chicken producers were able to reduce costs and prices dramatically. It takes 10 pounds of feed and 11 weeks to produce a five-pound broiler, and chickens have become so uniform in size that consumers know what to expect with each purchase. Efficiency and uniformity- which Tyson achieved by having its own hatcheries and feed mills as well as contracts with growers that specify how chickens are to be raised in climate-controlled sheds--allows Tyson to sell branded value-added chicken products.

Such vertical integration is much more difficult to achieve in pork and especially in beef production. However, IBP announced that it would sell beef under the Thomas E. Wilson label, and Wal-Mart announced that it would sell only Thomas E. Wilson beef at its 868 supercenter stores. The United Food and Commercial Workers opposes such pre-labeled fresh meat, fearing that its members might lose jobs in grocery stores. About 39 percent of all meat sold at retail in 2000 was prepackaged, or "case-ready," compared with 23 percent in 1997.

In California, Foster Farms, the largest chicken processor, announced plans to buy the poultry operations of Zacky Farms, the number two poultry processor in the state. Foster produces 750 million pounds of poultry products worth $1 billion annually; Zacky produces 165 million pounds worth $250 million.

Smithfield Foods Inc., the largest US pork processor, was sued by environmental groups in March 2001 in Tampa, Florida; they accused Smithfield of lowering its production costs by flouting federal and state environmental laws. Smithfield Foods received the largest civil penalty ever assessed for violations of the Clean Water Act in 1997--a $12.6-million fine. The second-largest pork producer, Premium Standard Farms, in 1999 settled an environmental lawsuit in Missouri by agreeing to spend $25 million to study technology that could reduce pollution.

The suit seeks to have hog farms considered as factories that must treat their waste instead of storing it in lagoons and spreading it on fields. Farms are not required to build waste treatment plants; factories can be required to construct waste treatment plants.

Louis Aguilar, "Excel meatpacking employees strike Workers defy union, seek safer plant," Denver Post, February 27, 2001. Chris Clayton, "Diversity Push, High-Tech Spur Gains Economic Profile," Omaha World-Herald, January 14, 2001.