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They’re all like that, Atrios

Atrios marks Hershey as the worst company in America today for hiring foreign students and then paying them subsistence wages and charging them more for rent.

But Hershey is hardly an exception. This is the way more and more corporations are operating. The goal is to meet quarterly earnings so costs must be cut. That usually means labor costs are minimized. So, the company lets go of expensive full time workers with benefits and hires them back as inexpensive contractors. They do it through an official blessed vendor. That vendor hires contractors based on the company’s needs. Sometimes, when there is a special request, the vendor subcontracts the hiring process. Everyone makes out in the process except the worker, who usually ends up footing the bill for all the benefits he/she has lost. With every intervening middle man, there’s a cut off the top of the worker’s wages.

Now, you might think that only low level, unskilled labor would be subject to this scheme. But the truth is that there are large international pharma companies that operate this way now. The industry as a whole has lopped a huge number of scientists off their payrolls recently and can now hire them back as contractors at vastly reduced salaries and no bennies. The big company doesn’t have to deal with the sausage making. It’s the vendor that takes care of that. And the big vendor doesn’t have any control over what the little vendor does. So, the cost of labor decreases and no one is responsible.

Corporations are necessary. I wish the left would come to terms with this fact. They’re not inherently evil. Certainly, the people who work for them are not. But the people who run them have had the rules rewritten in their favor in recent decades so they can get away with just about anything these days. Since we need corporations, it’s important that we change the rule makers if we want to make life fairer for all of us. Right now, they’re like adolescents who have very lax parents. This is not necessarily a good thing because so much of the business has been sacrificed to feed the shareholders, and their 401ks, that productivity is no longer optimized. Shredding the workforce will catch up to them. And having a bunch of under compensated highly skilled workers at your site means they will only do what they are paid to do and no more. That is a waste for both the employer and employee.

The individual mandate of the Affordable Care Act was struck down in an appeals court last week. I suspected that the mandate gave businesses an excuse to lay off even more people because as long as employees had to pay for their own health insurance in the future, the company was off the ethical hook to offer it to them. But the blessed vendor scheme is just picking up steam. Expect more stories like Hershey’s to come to a workplace near you.

27 Responses

  1. Corporations are necessary, no argument there. The problem came with this nonsense that corporations have the same rights as people, and can now openly buy our politicians.

    • The problem is not that corporations can buy our politicians. The problem is that politicians can be bought. Let’s put the responsibility on the rule makers where it belongs. I guarantee you that the politicians in question would be more than happy of you continued to blame the corporations. After all, you can’t vote a corporation out of office.

      • RD, I fear you are overlooking something. If the robber barons can’t buy a politician currently holding office, they’ll just find a rival who can be bought, and pour [now-unlimited] funds into buying ads for the rival and against the honest incumbent, and so the honest incumbent will be voted out of office by the low-information majority of the minority of people who vote.

        I think that’s more or less what happened to Hillary, even though she wasn’t an incumbent Prez at the time. The robber barons went to her and said, “If you’ll agree to strangle SS and Medicare for us, we’ll guarantee you the White House”. She told them to go directly to Hell, do not pass go, do not collect $200. They simply went and found someone who could be bought, and you know the rest.

        I don’t see any way out of this problem.

        • Look to the north, id. The Canadian NDP gained a lot of seats in their latest election because the public got sick and tired of the Liberal party capitulating and doing nothing year after year. Yeah, Canadians are stuck with a conservative government for awhile but they have an newly energized left.
          Something like that could happen here. Voters need a choice other than the ones they currently have.

          • NDP actually beat the Liberal party in seats. They are now the opposition party.

            It is disturbing that the fund managers are using our 401K money to convince our employers to fire us. I’d like to see an internal revolt, though. If a company does better with an expereinced workforce with good pay and benefits, the people who work in those companies need to start pooling their resources. We desperately need some real employee owned businesses to complete with the plantation system developing in the corporate world.

      • Politicians will always be “buyable” as long as they need funds for their next election. It is my opinion that there are more corporations that have the motivation to buy a politician to get their way than there are individuals.

        Get rid of lobyists, and institute term limits and there might be some hope

  2. We have term limits in my state and they all just change jobs. The key to more accountability in government, imo, is to institute public financing of all campaigns at the local, state and federal levels.

    That probably doesn’t have a snowball’s chance of occurring, though. No one even talks about public financing of elections anymore.

  3. For the record, Hershey Chocolate Company is the support $$ for the Hershey School. Profits from Hershey Company go to the school and also to corporation shareholders.

    Hershey School supports and fully educates destitute children in perpetuity. It is 100 years old.

    It has been a great investment for the school which own millions of shares of Hershey stock.

    Corporations can be for the good as well as for profits.

    Can’t paint all corporations with the same brush.

    http://www.hersheytrust.com/

    • I think most everyone would take mid-size corporations that actually make things (like Hershey) above mega-corporations that add negative value to the economy while extracting rent in collusion with the government (iow Obama’s constituency).

    • I’ve lived in Hershey, know all about Milton Hershey school and all the great things it does for disadvantaged kids.
      But that doesn’t mean it is incapable of following trends and it has shareholders too. I’m guessing that the executives didn’t know how those foreign workers were being paid. They don’t really know how their workers live. They’re too busy backstabbing, kissing ass and fighting each other for the best office.
      One foreign worker protest is not going to change this trend. But that’s what’s happening all around the company. When you can treat a bunch of PhDs that way, no one is safe.

    • There was a move by the board some years ago to get rid of the trust but they couldn’t. A couple of the larger share holders joined in with them.

  4. After re reading that Hershey article, it occurred to me that i know several young people in Pennsylvania who would LOVE to have those $8.00 hour jobs. Unemployment is around 12% in those communities and probably higher for young people.

    Those foreign kids were complaining about getting paid jobs.
    Whiners.

    • Um, yes, it does make me wonder why we are importing any workers at all. There certainly is no shortage of talent in any field or skill at the present time.

    • Yeah, those ingrates! They expected to be treated like workers in their home countries, after all we’re a civilized industrialized nation like where they live.

  5. It won’t be long before we’re right back in the America of Upton Sinclair’s jungle: companies will charge us inordinate fees for renting their rotting and termite riddden houses and take the cost of what we purchase at their overpriced stores out of our meager paychecks.

    • So what’s not to like?

    • That seems to be the plan….back to the good old days /snark

    • Company town?

      We are there with health insurance.

      When Bill Clinton tasked Hillary with coming up with a health care plan that wouldn’t bankrupt the sick back in 1992 she had the Big Three auto makers on board at first. It sounded like a sweet deal to them, off loading health care onto the individual workers saving themselves the costs of administration and lowering their contribution.
      Then they came to realize that health insurance and denying it when the UAW went on strike was a powerful bargaining tool they didn’t want to lose. Little did they know how costs would spiral out of control in the future.

  6. I don’t think corporations are evil, because they aren’t humans, and only humans [pause for philosophical discussion] are capable of evil.

    However, the owners of the corporations (who also own the politicians) are people. They’re responsible for the evil that they do, and is done in their name. I know things are more complex than that … But also, as a crisis approaches, things simplify, as they are doing now.

  7. You might find this article at Salon interesting:

    We talk to Lady Lynn Forester de Rothschild
    The original PUMA talks to Salon about how she went from Hillary loyalist to Huntsman bundler

    I don’t remember seeing her around here. Is that SM77’s real name?

    • No, SM77 was from Florida. I did read that post on Lady Lynn. Sheri Tag had some connection to her but I didn’t. I think she might have been the force behind HiredHeels.
      Frankly, she’s sounds a bit wacky to me. She went whole hog for McCain last time going so far as attending the convention and stuff. But very little of what she is saying makes any sense. If you really believed Hillary Clinton would make a better president, for all of the right reasons, why would you support some lame ass bipartisan coalition and Jon Huntsman? As for Obama being harsh to the business community, you have got to be kidding.
      Anyway, I think she is a bit tetched, if you know what I mean.

  8. Move to Amend will interest proponents of the idea that corporations are not people (and UMKC is a VERY cool place).

    • I think activists who are zooming in on the personhood issue of corporations are tilting at windmills. Yes, the concept is absurd and objectionable. However, it won’t get them anywhere because corporations are not accountable to the public. Politicians are.
      Republicans like Romney are going to jump on the left’s immaturity and cluelessness about this issue. You can scream and complain all you want about how unfair corporations are. It will do you o good until you hold the rule makers accountable for letting corporations get away with it. Pivot to the people who take the money.

      • What happens if we get an honest politician, and then the feral elite simply buys an opponent, pours money into that opponent’s campaign, and so that opponent wins the next election? I don’t see how greater morality among politicians will solve that problem.

        Also, as an unabashed cynic, I am deeply skeptical of any solution that relies on human beings refusing to behave badly.

        More and more, I simply don’t think there is a solution. The USA, perhaps human civilization, perhaps even the human species, is simply doomed and that’s all, folks. Haruhi be thanked that I was too poor, plain, and socially awkward ever to mate and breed. 😦

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