Temporary Work, Lasting Poverty
And The American Warehouse
By Dave Jamieson
Progressive America Rising via HuffPost
JOLIET, Ill., and FONTANA, Calif. — Like nearly everyone else in Joliet without good job prospects, Uylonda Dickerson eventually found herself at the warehouses looking for work.
"I just needed a job," the 38-year-old single mother says.
Dickerson came to the right place. Over the past decade and a half, Joliet and its Will County environs southwest of Chicago have grown into one of the world’s largest inland ports, a major hub for dry goods destined for retail stores throughout the Midwest and beyond. With all the new distribution centers have come thousands of jobs at "logistics" companies — firms that specialize in moving goods for retailers and manufacturers. Many of these jobs are filled by Joliet’s African Americans, like Dickerson, and immigrants from Mexico and elsewhere in Latin America.
But many bottom-rung workers like Dickerson don’t work for the big corporations whose products are in the warehouses, or even the logistics companies that run them. They go to work for labor agencies that supply workers like Dickerson. Last year, she found work as a temp through one of the myriad staffing agencies that serve big-box retailers and their contractors. Thanks largely to the warehousing boom, Will County has developed one of the highest concentrations of temp agencies in the Midwest.
Dickerson, grateful to have even a temp job, was taken on as a "lumper" — someone who schleps boxes to and from trailers all day long. As unglamorous as her duties were, Dickerson became an essential cog in one of the most sophisticated machines in modern commerce — the Walmart supply chain. Walmart, the world’s largest private-sector employer, had contracted a company called Schneider Logistics to operate the warehouse. And Schneider, in turn, had its own contracts with staffing companies that supplied workers.
The experience would change the way Dickerson saw the retail industry — particularly during the frenetic run-up to the holidays, when workers are under tremendous pressure to get products out the door and into stores.
"I don’t think people know what the people in those warehouses have to go through to get them their stuff in those stores," Dickerson says. "If you don’t work in a warehouse, you don’t know."
Dickerson quickly discovered that the work wasn’t easy, if there was any work at all. Each morning she showed up at her warehouse, she wasn’t sure whether she’d be assigned a trailer and earn a day’s pay. She says there were days that she and many temps were told simply to go home, without pay, since there wasn’t as much product to unload as expected. Sometimes Dickerson was told they didn’t have any trailers light enough for a woman, she says.
But on most days the warehouse teemed with lumpers, many of them wearing different colored t-shirts to signify the different agencies they worked for. Dickerson herself would work for two different labor providers within the same warehouse in a little more than a year.
The difficulty of a lumper’s day often went according to chance. A lucky lumper might be assigned a container filled with boxes of Kleenex or stuffed animals, while an unlucky lumper might pull a container filled with kiddie swimming pools or 200-pound trampolines. For the heaviest lifts, Dickerson would be assigned a partner, and the two would split the pay for the trailer, moving the massive boxes onto pallets by hand.
The job was fast-paced and stressful. Dickerson says supervisors would walk along the warehouse’s bay doors, marking the workers’ progress over time. The supervisors, Dickerson and other workers say, often told them to speed it up if they wanted to be invited back. Many of the workers were temps with no job security and no recourse. And the local unemployment rate, then around 11 percent, promised a long line of potential replacements.
"By the end of the day, your body hurts so bad," says Dickerson, who was among a small minority of females working as lumpers at the warehouse. "You tell them you can’t do it the next day, … they’ll tell you, ‘We’ve got four more people waiting for your job.’"
For a while, Dickerson worked according to "piece rate" — she was paid not by the hour but by the trailer — a stressful pay scheme meant to encourage her and her colleagues to work faster and faster, and one that the labor movement worked hard to abolish in many industries in the 20th century. Each paycheck was different than the last, and most of them were disappointingly low, she says. In her year at the warehouse, Dickerson says she never had health benefits, sick days or vacation days. If she didn’t unload containers, she didn’t get paid.
"It all depends on how fast you work," she says. "It’s like a race. You’re racing to get done with the trailer so you can get another one. Otherwise, you won’t get enough money."
The warehouse floor wasn’t a very welcoming place for a woman, Dickerson says. As one of the relatively few female lumpers, she says she was often fending off crude overtures from male co-workers. And then there were the bathroom issues. While it was piece rate when it benefited the boss, the clock came on for break time. Each day Dickerson had two 15-minute personal breaks in addition to her lunch, but the warehouse was so sprawling — it covered ground equal to several football fields — that it could take her five minutes to walk each way to get some air or use the bathroom, leaving her with only five minutes of personal time.
"When I used to go to the bathroom, I literally had somebody counting down the minutes," Dickerson says.
It was particularly difficult when she was on her period and she felt couldn’t use the restroom when she needed to. Eventually, she was being reprimanded for too many breaks, she says. Worried about losing her job, she says she tried so hard to avoid using the bathroom that she eventually developed a bladder infection.
Physically and emotionally drained, Dickerson stopped showing up at the warehouse earlier this year.
"My body still is not the same," she says. "I still have aches and I still have pains. I have migraines because of the stress I went through working at that place."
Dickerson says she’s now living in a house where the electricity and water have been shut off, sharing a cell phone with some of her neighbors. She’s on government-sponsored health care, just as she was while working at the warehouse, and she now relies on food stamps to get by.
The one place she refuses to take her food stamps is Walmart. * * * * *
Walmart may have been the end beneficiary of Dickerson’s sweat, but the big-box retailer wasn’t directly responsible for her low pay or her aching body. That’s one of the many benefits to an employment arrangement based on outsourcing and subcontracting: The corporation at the top indemnifies itself from any unpleasantness at the bottom, thanks to the smaller corporate players in the middle. Many American companies have woken up to this fact, with broad implications for the future of blue-collar work.
"It seems to be spreading like wildfire," Nelson Lichtenstein, a professor of American labor history at the University of California, Santa Barbara, says of such outsourcing, particularly as it relates to temp workers like Dickerson. "All of these companies, wherever they possibly can, they want to create a workforce that doesn’t work for them. The question is, Why? What is the incentive?"
"They’re smart," he says. "They run the numbers."
Earlier this year, temporary workers at a Pennsylvania plant packing Hershey products staged a mass walkout over what they described as abusive working conditions. The workers, who were students from Asia and Eastern Europe here on J-1 guest visas for the summer, said they were required to lift 50-pound boxes throughout the day and were threatened with deportation if they couldn’t keep up. Although they packed Hershey goods, the students were employed by a staffing company twice removed from Hershey, which had more than $5 billion in revenues last year. Similar outsourcing has spread to much of the American food-packing industry.
But such sub-contracting isn’t contained to warehouses and plants. In an effort to cut costs, even hotels have started quietly contracting out a considerable chunk of their back-of-the-house workforce to labor agencies. Hyatt, for example, has replaced many of its housekeepers with cheaper temp workers. Hyatt’s direct hires now work alongside many lesser-paid agency workers, some of whom work on a temporary basis for years on end, tracking the minimum wage.
Such subcontracting enables corporations to essentially take workers off their books, foisting the traditional responsibilities that go with being an employer — paying a reasonable wage, offering health benefits, providing a pension or retirement plan, chipping into workers’ compensation coverage — conveniently onto someone else. Workers like Dickerson, of course, aren’t accounted for when Walmart touts that more than half of its workforce receives health coverage.
Infographic by Chris Spurlock.
As manufacturing jobs continue to head overseas, Americans need new sectors that can provide good, middle-class work for millions of people. Driven as it is by the consumer economy, the retail supply chain should be one of those sectors. But plenty of workers who are lucky enough to have jobs in the industry find themselves earning poverty wages. And while workers get squeezed in the name of lower prices, the overall benefits to consumers may be illusory. By many measures, the middle class is shrinking — and not just because of the Great Recession. There are simply fewer jobs that pay good wages. More than 46 million Americans — roughly one in six — are now living in poverty, the highest number ever recorded by the Census Bureau. Between 2001 and 2007, as the economy boomed, poverty expanded among working-age people for the first time ever during a period of growth. Workers on the whole made less at the end of the boom than they did at the beginning.
In the case of the warehouse industry, where permanent temps are now common, many workers performing the most difficult jobs don’t even enjoy the status of basic employees. They work at the pleasure of the agencies employing them. For many of them, getting hurt or slowing down means the end of their gig with no parting compensation — similar to the arrangement detailed in a devastating expose of an Amazon warehouse by the Pennsylvania Morning Call in September.
"We have the re-industrialization of America in this distribution nexus," says Lichtenstein. "It’s a booming sector of our economy. The kind of work they do is factory labor, and they should be earning [good wages] with benefits. But instead, it’s insecure, and it’s low-wage.
"This is the blue-collar working class that should be replacing the steel worker," he says. * * * * *
Until a year ago, Debora Terkelson worked in the Costco warehouse near Mira Loma, Calif. She ran one of the cigarette machines, handling boxes of smokes, until she threw her back out moving a heavy load in April 2010, she says. She worked a few months of light duty but eventually even that proved too painful. No longer able to work, she’s now collecting workers’ compensation.
"I don’t think I’ll ever be able to lift again," says Terkelson, 48. "Just doing my laundry each day is a new adventure in pain."
Her life-altering injury notwithstanding, Terkelson had it pretty good by warehouse standards, and in many ways she’s lucky to be collecting workers’ comp benefits. She says the Costco distribution center is one of the good players in the Inland Empire, an area of Southern California that encompasses San Bernardino and Riverside counties and is now home to one of the largest warehouse clusters in the world.
Costco’s well-earned reputation for treating its in-store employees well carries over to its warehouse. The Costco warehouse does not rely on temp workers. It hires employees directly, it pays pretty well and it has a safety representative and even stretching classes. Despite all that, the company still manages to provide some of the lowest prices available to consumers.
"We tend to not outsource even if we could save money by doing it," says Richard Galanti, Costco’s chief financial officer. "We recognize it might cost more but we think it’s the right thing to do. … Everyone in the building feels like they’re employed."
That attitude makes Costco an outlier in the area, Terkelson says. Her son worked in a nearby shoe warehouse for a temp agency. He came home exhausted each day, with little to show for it, though she guesses the agency made pretty good money off of his work. "They hire them, and as soon as they don’t need them, they get rid of them," she says. "They don’t care. They treat them like a slave. I’m sorry."
Despite the economic downturn, the Inland Empire is still in the midst of a long-term warehousing boom. Some of the first arrived in the 1990s, when retailers and developers took notice of the area’s relatively affordable land and lax regulatory atmosphere. Walmart, Target, Home Depot, and Lowe’s all picked up warehouse space in the area. They continue to sprout up today, creeping further eastward, some of them with footprints covering more than a million square feet.
As in Joliet, locals and politicians in Southern California have hoped warehouse work might replace the decent blue-collar jobs that disappeared with much of the American manufacturing sector in the late decades of the last century. Even if we no longer manufacture much in America, we will always need workers to handle all the clothing, electronics, furniture and toys that come here from Asia. And with its proximity to the ports in and around Los Angeles, where the cheap imports from China and elsewhere tend to land, the Inland Empire seemed poised as well as anyone to net a lot of working-class jobs.
There’s no doubt that retailers and logistics companies have benefited from the Inland Empire’s warehouse boom. The question is whether blue-collar workers have benefited in kind.
John Husing says they have. An economist who’s consulted to local governments dealing with the logistics industry, Husing says, "for blue collar workers, the decline in manufacturing shut off their access through that sector to the middle class. In Southern California in particular, logistics has become an alternative to get to the same place."
Others are less boosterish, including Juan De Lara, an assistant professor at the University of Southern California who’s studied the logistics industry in the region. "It’s been good to many workers who get paid decent wages for higher-skilled jobs as direct employees," says De Lara. "But it’s also been pretty terrible for the workers that work for these temporary agencies."
There are now more than 125,000 direct-hire, full-time jobs in the Inland Empire’s logistics industry. Available data makes it difficult to know just how many temp jobs there. Husing doubts it’s more than 10,000. Others believe it’s several times that number — perhaps even half of all jobs in logistics, according to Warehouse Workers United, a union-backed group that now advocates on behalf of the area’s lowest-paid warehouse workers. (Husing dismisses the group’s numbers: "The people who throw that stuff around are ideologues. They don’t want that sector to survive because they consider it to be dirty.")
The group says the number of temp jobs in the region has skyrocketed in the last two decades, thanks largely to the explosion in the number of warehouses. The industry relies so heavily on temp work that many temp agencies actually have offices inside the warehouses themselves.
Sheheryar Kaoosji, an organizer with Warehouse Workers United, says a decade ago, the ratio of direct hires to temps was 80 percent to 20 in many warehouses.
"Now, it’s the opposite. And it’s accelerated with the [economic] crash," Kaoosji says. "The way that these guys work — the way a Walmart operates — every year they’re going to push costs down on each of their contractors. Every year, they’re coming back, ‘This is going to cost less.’ Every year you do that, it’s going to have an effect. The conditions are going to go down.
"At this point, the wages in some of the facilities have gone down below the federal and state minimums," he says. * * * * *
With most retailers getting the same products from the same place — i.e., Asia — the supply chain has become one of the few arenas where big-box chains can compete. This competition has led to a tremendous pressure to move goods as quickly as possible. Even the word "warehouse" itself has become something of a misnomer; the idea is no longer to house goods but to keep them moving, from port to rail to tractor-trailer to store display. That’s why many warehouses have morphed into what’s called a "cross dock": the products come in one side of the warehouse and almost immediately go out the other, barely touching the ground.
Despite modern automation, most warehouses still require bodies, and the pressure to move goods faster and faster often falls on the ones at the bottom. It doesn’t help that many of the workers toiling inside the Inland Empire’s distribution centers are believed to be undocumented workers from Mexico — a workforce that’s generally grateful for whatever pay it can get and far less likely than American citizens to report workplace abuses, for fear of deportation.
There’s plenty of opportunity for exploitation. According to charges filed by the California labor department this fall, a company operating in a warehouse handling Walmart goods was allegedly breaking labor law by not providing workers with legitimate earnings statements. Officials allege most of the lumpers were being paid on a piece rate plan that many of them couldn’t understand, in what officials have described as a "concerted effort" to cheat the workers out of their wages. The state issued more than $1 million in fines.
The two labor suppliers cited, Tennessee-based Impact Logistics and North Carolina-based Premier Warehousing, apparently have contracts with Schneider, which, in turn, has a contract with Walmart. Neither Schneider nor Walmart has been accused of any wrongdoing, precisely the outcome the contractor arrangement facilitates.
Julie Su, the California labor commissioner, told HuffPost at the time that the layers of outsourcing can make it nearly impossible to hold big players accountable — a huge collateral benefit in addition to any cost-cutting that goes with subcontracting. "Warehouses are one example of the ever-increasing contracting out of labor," Su said. "It’s difficult for enforcement, and in many instances it’s a deliberate effort to avoid compliance."
Six lumpers at the warehouse filed a class-action lawsuit on the heels of the state investigation. Everardo Carrillo and his co-workers say they’ve been moving Walmart goods in a warehouse where the temperature regularly climbs to over 90 degrees, walking in and out of 53-foot-long steel containers that get even hotter baking in the Southern California sun. After working for a set hourly wage, the workers claim that a year and a half ago they were switched to a piece-rate pay plan — an arrangement largely out of a bygone era. Their bosses told them they would earn "much more money" under the new scheme, which paid them according to the container, but their earnings actually fell, according to the lawsuit.
The workers claim it was never made clear how their pay was supposed to break down — an allegation apparently bolstered by the state’s investigation. They claim that when they complained about their confusing paychecks, their supervisors responded by sending them home without pay or refusing to give them work the following day. The lumpers were working on a temp basis. According to the lawsuit, the majority of workers were direct hires as recently as 2006; now, three out of every four workers are temps.
When asked if a Schneider executive could be interviewed about allegations from temp workers in its warehouses, a spokesperson sent HuffPost a statement, saying its labor suppliers are "separate corporate entities": "The only legal avenue which Schneider has to enforce their compliance would be to terminate the contract with these vendors. We have no plans to terminate the contracts with our vendors; our expectation is that they will comply with all applicable statutes, regulations and orders."
Walmart, whose products the workers were handling, also kept an arm’s length from the charges. When HuffPost reported on the state investigation and lawsuit in October, a Walmart spokesman said the retailer is "not involved in this matter." When a similar lawsuit was filed in April in Illinois — again, naming low-level companies contracted to move Walmart products — the company asserted its distance from the allegations then as well, a spokesman noting that "the facility isn’t operated by Walmart nor are the people who work in it employed by Walmart."
In an interview, Walmart spokesman Dan Fogleman declines to say how much of Walmart’s logistics work is outsourced, but he says the company has 147 distribution centers across the country, the majority of them owned and operated by Walmart itself. Indeed, the jobs at Walmart’s smaller, more regional distribution centers are known to be good, highly coveted jobs. When asked why the company would outsource the work at some of its largest and most important facilities, Fogleman says there are times when a third-party can simply do it better, faster and cheaper.
"Since the early days of our company, the ability to move products quickly and efficiently has really been a driver for our success," Fogleman says. "We’re looking for every opportunity to improve our efficiencies. Sometimes that means doing it ourselves; sometimes we’re using partners to achieve that. … We’re an advocate for our customers. We’re doing everything we can to provide them with low prices." As for the allegations from contracted workers in the Inland Empire and elsewhere, Fogleman says, "We have serious concerns when our contractors or sub-contractors are cited for those types of violations. We hold all of our contractors to the highest standards."
A promotional video for Impact Logistics, a company recently fined by the California labor department.
Ana Sanchez, a 46-year-old from Mexico, says immigrants like her in the Inland Empire inevitably find themselves looking for work at the warehouses. In 2007, Sanchez herself took a job through a labor agency wrapping and labeling boxes on pallets inside a warehouse she says moved products for Sears and K-Mart, among others. Sanchez was surprised to learn that the work there was as strenuous as it was back in Mexico.
She started at $6.75 an hour and says her wage climbed to more than $8 over time, though it was outstripped by a growing workload. Sanchez’ gig required carrying a roll of shrink wrap that, when full, weighed around 50 pounds, and slapping labels on boxes at a dizzying pace; she went through between 5,000 and 8,000 labels on a typical day, she says.
"I would often get the heaviest loads of work because I was so fast," Sanchez says. "Whenever there was a rush order they would call on me because I was two rolls quicker than the other girls."
The job also required a lot of stooping over in tight spaces. One day in 2009, Sanchez threw out her back while working on a rush order. She hoped to be put on light duty or trained for a new, less intensive job, but she says she was being passed back and forth between the company that ran the warehouse and the labor company that she technically worked for. Soon she was fired for allegedly botching an order, she says.
"When you go in to work for a warehouse you give it your all," she says. "When you get hurt, they treat you as though it doesn’t matter."
Sanchez hasn’t been able to do manual labor for two years. So what does she do for money?
"I have a lot of friends and relatives who place orders for me to cook tamales," she says with a shrug.
To some people in the Inland Empire, the warehouses have come to represent a dubious bargain. Some good salaries have certainly come with the logistics industry; a directly hired forklift operator, for instance, can expect to make a decent living. But there weren’t supposed to be so many temporary positions with measly wages and no benefits. In fact, critics say that temp salaries weren’t even figured into the economic projections trotted out by industry boosters and developers who sold the public on the logistics industry. What they did include were the theoretical salaries of unionized warehouse workers and even airplane pilots.
The Inland Empire’s thousands of warehouse jobs may also have come at a cost to public health. What used to be dairy fields and vineyards two decades ago are now warehouse tracts. Buffeted by mountains to the north and east, and absorbing winds coming from Los Angeles to the west, the Inland Empire has a geological gift for trapping particulate pollution. The area boasted some of the worst air in the country before the logistics boom; residents say it’s now even worse.
Mira Loma Village, a community of 101 stucco townhouses populated mostly by Latino families, has been hemmed in by warehouses on all sides, with several thousand trucks rolling past the community each day. According to a study done by researchers at the University of Southern California, kids in Mira Loma have abnormally weak lung capacity and slow lung growth. And more warehouses are on their way.
"I see it. I smell it. I can feel it," says Laura Borrayo, 42, a Mira Loma resident whose backyard is often coated in a layer of soot from the truck traffic. She says some of the neighborhood children have developed asthma due to the bad air.
Citing some of the worst diesel pollution in the country, Mira Loma residents have filed a lawsuit to stop the latest logistics project — an additional 24 warehouses, covering 1.4 million square feet and expected to bring another 1,500 trucks per day, according to the L.A. Times. Residents say the project will occupy what has become the last shred of their buffer zone against the warehouses, taking away their view of the mountains in the process. The lawsuit has put the project on hold for the moment.
Among the residents in Mira Loma Village opposed to more warehouses is Terkelson, the Costco warehouse employee.
"I’ve lived in this area for years. When I was a kid, it was beautiful out here," Terkelson says. "But everything went downhill. People don’t even realize what they’re breathing. The soot, it’s nasty. I don’t wash my car no more, because it doesn’t do no good."
Residents haven’t had much luck fighting warehouses in the past, having been cast as opponents of much-needed jobs. Riverside County has an unemployment rate hovering around 14 percent. Penny Newman, director of the Center for Community Action and Environmental Justice, which filed the Mira Loma lawsuit, says the kinds of jobs brought by the warehouses aren’t worth the costs.
"There was a lot of fanfare about goods movement being the economic engine of the future," says Newman. "We’ve discovered that these are not the kinds of jobs anyone should have under the conditions they’re facing. … They’re temp jobs and they’re low-paying and the conditions are bad."
"The money is made by others," Newman says. * * * * *
For a lot of the goods that enter the U.S. through the Inland Empire, the next stop is the greater Joliet area, among the largest rail hubs in the country. Within a day’s drive of two-thirds of the country, Joliet itself is now home to not one but two massive "intermodal terminals" — the two modes being rail and truck — receiving freight from the West Coast that’s then hauled to the area’s warehouses and, later, to stores across the U.S.
For one former Teamster who found himself unemployed last year, the growth of the logistics industry in Will County looked like his ticket back into the middle class. Last year this Joliet native, who’s in his 50’s, responded to an ad in the local paper; a labor agency was bringing on workers to move goods for a major retailer. The firm promises to save its clients on labor costs while simultaneously boosting worker efficiency. (Due to ongoing litigation, neither the worker nor the company will be identified.)
Demonstrating just how booming the logistics industry is in Joliet, the man says the firm was actually sending vehicles out into the community as part of a mobile hiring effort, a bit of proactive recruitment that’s hard to find in this economy. He was quickly hired, probably due to his past experience, and to what he pitched as his greatest strength: "I don’t miss days."
The fact that this man found himself working as a warehouse temp speaks to his diminished opportunities. He’d been a Teamster for 12 years, driving a truck for a bread company that was eventually shut down, and then for a waste-management company that was relocated to the other side of Chicago, making the commute untenable. It was the kind of good living that’s now hard to find. Aside from whatever highly desired jobs remain at the area’s lingering refineries, he sees little work outside of the area’s new warehouses.
"That’s all that’s out here," he says.
His trucking experience landed him a pretty cherry gig at the warehouse. He worked primarily as a "spotter," pulling loaded trucks from the bay doors and parking them for the drivers who would take them away to other, smaller distribution centers. He was paid $12 per hour to start, about a buck more than most other new hires, he says. Though he was merely a temp without job security, he considered himself pretty lucky.
"I kind of liked the job," he says. "It wasn’t a bad job."
But about six months in, he says he started to understand how everything worked by design. He was shocked by the warehouse’s turnover rate, as new workers constantly came and went, often leaving under bad terms. He guesses the average worker lasted three months, many of them eventually being "pointed out." As in many of Joliet’s warehouses, he and his colleagues were working under a demerit system, receiving points for being tardy, missing shifts or not "making rate." Once you hit 10 points, you’re gone, he says.
He now argues that workers don’t last in part because they’re not supposed to. New workers, after all, are cheaper workers. And he also says the little-known temp agencies are there largely to facilitate the churn.
"That’s part of the trick — to put as many people between [the retailers] and the actual workers, so they don’t have to deal with the actual workers," he says. "They don’t have this headache. … They put these temp services between them and the people."
The former Teamser’s duties evolved at the warehouse, and eventually he found himself filling online orders to be shipped directly to customers’ homes. Working off an order list, he was expected to pick 500 boxes during his 12-hour shift — tight but doable. The problem, he says, is that sometimes the products weren’t where they were supposed to be, which cut into his efficiency rate. He says he was supposed to hit a perfect 100 percent each day, but sometimes he dropped into the 90s due to missing products. He clashed with a supervisor over the issue. "How do you expect me to be perfect when the system isn’t perfect?" he asks.
One year into his job, he says he was canned after barely missing his rate three days in a row, earning three consecutive writeups — a fireable offense. He wasn’t shocked. Having just hit his one-year anniversary, he had become expensive, at least by warehouse standards. His pay had risen to $14 an hour — still not a living wage for the area by some measures, but more than many lumpers will ever see. He had also just started to accrue paid vacation time. Or at least he thought he had.
According to a lawsuit the man filed earlier this year, his company had agreed to give employees one week of paid vacation after they’d worked for the company for a full year. When he was terminated, he was told he’d come up a mere 40 work hours short of earning vacation. But the man says management’s tally ignored the considerable overtime he’d worked during the peak season.
The company wouldn’t relent, so he and a colleague sued. In addition to the vacation issue, they sued the company for not paying workers for a minimum of four hours on days when they were sent home early or without any work at all, as an Illinois law now mandates. The company has denied the allegations.
Like many warehouse workers interviewed for this story, the former Teamster has spent a lot of time wondering how much money the agency made off of his work merely for supplying him. The way he sees it, the reliance of Walmart and others on temp agencies is the reason most of the warehouse jobs will never lead to stable living, just the financial anxiety of someone who’s temping in perpetuity.
"You can’t build on working at these warehouses," he says. "I can’t say, ‘Sweetheart, let’s get married. Let’s have a baby.’ Because I don’t know how long it’s going to last. I know I’m working now, but will I be working six months from now? And how much money are they going to screw me out of?" * * * * *
The Chicago area has long been home to warehouse jobs, and the vast majority of them used to be decent, blue-collar jobs, says Mark Meinster, international representative with the United Electrical, Radio and Machine Workers of America Union, or UE, which is leading an organizing effort of warehouse workers in Joliet. Meinster says that over the last two decades the jobs have changed along with the retail industry.
With a growing focus on efficiency and cost-cutting within the supply chain, what had been secure and well-paying union jobs are now often low-paying temp jobs, he says. A UE-backed group called Warehouse Workers for Justice interviewed workers at more than 150 area warehouses in 2009, finding that despite plenty of good managerial positions, about 63 percent of the workers in local warehouses are temps earning less than direct hires. One in four avail themselves of food stamps or welfare, and more than a third have to work a second job to make ends meet. (Warehouse Workers for Justice has no affiliation with the California group Warehouse Workers United.)
"As late as the mid ’90s, you saw many warehouse jobs that paid a living wage," says Meinster. "In Chicago, we define that as $15.87 an hour. Now, we’re finding that the average wage is somewhere around $9 an hour. Only 4 percent of the workers get sick days. Many are on government assistance. Sixty-two percent earn below the federal poverty line."
John Grueling isn’t so bearish. As the head of the Will County Center for Economic Development, a nonprofit development corporation that did much to attract the industry to Joliet, Grueling says the logistics industry has brought some much-needed jobs to the area as manufacturing has declined. Although he admits that the proliferation of temps is something that concerns him, he says the good jobs outweigh the bad.
"The competition is so severe that they’re going to do what they have to do, and in some cases, what they can get away with it," Grueling says of the companies operating in the warehouses. "But we think the industry as a whole is very healthy for us." (Grueling says his group no longer tries to lure logistics operations with juicy tax breaks the way they used to.)
Whatever the savings may be, there’s another benefit to the subcontracting model for the likes of Walmart: the splintered workforce among all the temp agencies creates a tremendous obstacle to unionization. Plenty of workers who aren’t necessarily conspiracy theorists consider it a form of strategic disorganization emanating from down on high. Unionization drives are easily scuttled. When it became apparent that temps were organizing at a Joliet warehouse for vacuum manufacturer Bissell two years ago, the workers soon found themselves out of a job.
Fragmented though they are, dozens of warehouse workers have managed to file class-action lawsuits alleging wage theft in the last couple of years, many of them with the help of a Chicago lawyer named Chris Williams, co-founder of the Working Hands Legal Clinic, which litigates on behalf of low-wage workers. Williams wrote a piece of legislation called the Day and Temporary Labor Services Act, an attempt by Illinois to wrap its hands around its booming and shadowy temp labor industry.
The law requires that labor agencies register with the state and also provide workers with written forms explaining what kind of work they’ll be doing and how much they’ll be paid for the assignment. Such rudimentary protections are needed, Williams says. He and other worker advocates have discovered fly-by-night temp agencies operating out of area garages, convenience store parking lots and, in one case, a Super 8 motel room.
In a lawsuit filed last month, 18 workers at the Walmart-contracted warehouse accused a temp company called Eclipse of not paying them the minimum wage and failing to pay them for all the hours they worked. One worker, Roberto Gutierrez, says he worked 21 hours in his first week and was paid a mere $57. On his paystub the company says Gutierrez worked only 12.5 hours, though by their math he still doesn’t seem to have been earning the minimum wage. According to another lawsuit, one of the temp agencies charged applicants for their own employment background checks; when the cost was deducted from their first checks, it pushed their pay below the minimum wage. Such lawsuits are fast becoming a cost of doing business for the temp companies.
"There’s a huge problem with people being shorted," says Williams. "In aggregate, it’s millions and millions in savings" for the companies.
So far, most of the energy from gadflies like Williams has been devoted to the Walmart supply chain. Like others, Williams argues that Walmart has trailblazed the temp-worker model within the retail world, and that other major retailers are simply following its path, as they often do.
None of the lawsuits involving the Walmart warehouse have touched Walmart itself. But the way Illinois’ temp labor law was written, a company at the top of a contracting tree could feasibly be held accountable for abuses at the bottom. In one case, Williams discovered that there were four companies separating Walmart from the workers who were handling Walmart goods at the warehouse.
"I believe Walmart is experimenting," Williams says. Of the area’s warehouses generally, he adds, "You’ll see temp agencies that supervise temp agencies that deal with temp agencies. It just adds another level of distance."
According to worker Demetrie Collins, the presence of temp companies has been growing just as the conditions and pay have been deteriorating. Collins says he earned a pretty good wage running a forklift at one of the warehouses five years ago. Then, after a break from work and a prison stint for a drug charge, he says he returned to the warehouses to see temp workers everywhere. He got on as a lumper at a warehouse but was fired earlier this year, he says. Unemployed, he now volunteers at Warehouse Workers for Justice.
"Hell yeah, there’s more temp agencies," says Collins. "Used to be they’d pay you good. But now, the warehouses are paying you shitty, and there’s nothing you can do about it. Fire them today, temp services gonna replace them tomorrow. They can treat the workers however they wanna treat them."
The downsides of temping go well beyond lower wages and fewer benefits. Many workers have to call in to the warehouse each morning to see if they still have a job for the day, essentially making them job seekers-in-perpetuity. The supplication can be demoralizing. One former lumper told HuffPost his temp status once cost him a loan — from a payday lender. The lender apparently thought he posed too great a risk, seeing as he had no guarantee on his employment from week to week.
Meinster, of the UE, says the temp system creates an entire tier of workers who are basically second-class.
"Despite the fact that these workers are paid poverty-level wages, we estimate that about a trillion dollars comes through Chicago on an annual basis," says Meinster. "That’s about $6 million per warehouse worker. Each worker is responsible for moving $6 million worth of goods through that supply chain. These are the workers who, collectively, if they don’t show up for a day, these companies would stand to lose a lot of money.
"That’s something these companies need to pay attention to," he says. * * * * *
A few months ago, the former Teamster heard about 50 job openings at the warehouse for Central Foods, a food wholesaler based in Joliet. The positions were similar to ones at the warehouse where he’d temped, but the pay and benefits seemed to be from another world. The Central Foods jobs were union jobs, starting out at a livable $16 an hour, with good health coverage, an annual raise, a 401(k) and a chance to make as much as $24 an hour after a few years, he says.
"What was the difference?" the former Teamster asks rhetorically. "No temp service."
Unfortunately, word about the direct-hire jobs had apparently spread throughout Joliet, with the competition so fierce that it made the local news. "Here they have health benefits and a pension," one man told the Joliet Herald-News in wonderment. "I never had a job that could do that for me." Another applicant bemoaned all the temp warehouse jobs on his resume. "It makes me look like a job hopper, but I’m not," he said.
When the former Teamster arrived to apply, scores of eager jobs seekers were already there, with a line coming out the door and snaking around the corner. Ultimately, more than a thousand people threw their hats in the ring, many of them boasting previous warehouse experience. The former Teamster waited nearly three hours to put in his application and make his trusty pitch: "I don’t miss days."
Must be a great gig if you can get it, he thought.
The Logistics Industry
In the modern consumer economy, massive retailers like Walmart and Target need to move goods as quickly as possible, from port to rail to tractor-trailer to store display. The competition has given rise to the logistics industry, which specializes in moving goods for retailers and manufacturers. Many of these firms now depend upon low-paid temp workers to load and unload the products that eventually make their way into our stores. These workers often perform difficult jobs at roughly the minimum wage — sometimes less, according to lawsuits — and can go years without benefits like health insurance.