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In the U.S., Huhtamaki Takes the Low Road

14 May, 2014A new report on Huhtamaki, a Finnish packaging company, reveals how the company’s expansion strategy in the U.S. is creating low-wage, precarious employment while threatening the job security and living standards of unionized employees.

“The expansion of precarious work in the United States is a serious concern for the global trade union movement,” said IndustriALL General Secretary Jyrki Raina.  “And even more so when the perpetrator is from a country with high labor standards, like Finland.”

The report, Huhtamaki’s U.S. Expansion Model: A Low-Wage, Low-Cost, Low-Responsibility Model of Employment, was released by the AFL-CIO and the United Steelworkers.  It documents how Huhtamaki has expanded rapidly by expanding production in poor communities, using temporary hiring agencies.

Workers employed through the temp agencies generally earn less than $10.00 per hour. Many start at $9.00 per hour with no access to benefits or wage increases. At this hourly rate, a worker’s annual income of $18,720 falls more than $5,000 below the federal poverty level for a family of four, which is a minimum annual income of $23,850.

Precarious work can have serious consequences for workers’ safety on the job. According to workers in one non-union Huhtamaki plant:

"...recently two workers had accidents in which their thumbs were amputated. When asked about safety training, the same group stated that, although they attend regular meetings where management stresses the importance of safety, on the plant floor, management’s only concern is production speed, which causes accidents and high stress for the workers."

This expansion of precarious work, often financed with taxpayer subsidies, creates high costs for both low-wage workers and poor communities.  At the same time, Huhtamaki’s low-wage model threatens the job security of its unionized workers.

The combination of expansion in economically depressed areas, using public subsidies, and a nonunion workforce, along with a management methodology that emphasizes increased speed and cost reduction, places workers in both the unionized and nonunion plants in a direct competition where everyone loses. Nonunion workers face low wages, unsafe working conditions, few or no benefits, and a retirement in poverty. Union workers face the erosion of their wages and conditions and the ongoing threat of transfer of production or closure of their facility.

“We know that in Europe, Huhtamaki is a socially responsible company that treats its workers fairly,” said United Steelworkers Vice-President Jon Geenen.  “What we need is for them to apply that same standard of fairness to their workers in the U.S.”