Ikea using the US for the cheap labor and acting like Wal-Mart

Many of the things in this article- such as the forced anti-unionization, no-notice random overtime with punishment for those unable to do it, and discrimination complaints.

Now, I’m not against companies going to cheaper countries as a means of cost-cutting, but I do have a problem with the anti-unionization tactics, and not being better then the local conditions. (you do have a corporate responsibility there)

I was considering Ikea, but I’ll want to see what the Swedish branch of the company does about this first- they know about this now- apparently this has made the Swedish news circuits, and Swedes aren’t too happy about it.

They weren’t too happy about he tax dodging either.

A nice example of the stark difference between Europe and the US.

The big difference is that the Europeans enjoy a minimum wage of about $19 an hour and a government-mandated five weeks of paid vacation. Full-time employees in Danville start at $8 an hour with 12 vacation days — eight of them on dates determined by the company.

Stupid socialists! You realize you don’t have to make the minimum wage so high and give that many day off, right? I mean, how can businesses stay open if the government tells them what to do?

On the other hand, Ikea probably saves a lot of money by shipping those jobs to poorer countries that have less workers rights. I still am baffled that the most powerful country to have ever existed on the planet is one of those places…

In my mind, here’s the salient quote:

The plant has been run mostly by American managers, along with some from Sweden.

It’s interesting that the Ikea management in Sweden is apparently out of touch with how the American plant is being run.

Swedwood spokeswoman Ingrid Steen in Sweden called the situation in Danville “sad” but said she could not discuss the complaints of specific employees. She said she had heard “rumors” about anti-union meetings at the plant but added that “this wouldn’t be anything that would be approved by the group management in Sweden.”

Ironic that it’s cheaper for IKEA to crank out furniture in it’s U.S. factory than in it’s European factories. One thing the article doesn’t mention though is health insurance. If full-time workers in the U.S. get it, it’s likely costing IKEA a lot of the difference between the $19 an hour they pay an EU worker who gets state-provided benefits and the $10-$12 an hour they would pay a full-time veteran employee here. It is telling that they reportedly use temps for up to half the workforce, as not only are they lower cost in hourly wages, but you do not need to provide benefits.

Because the American public does not value additional time off over productivity, though they do value things like safety rails and minimum working conditions to that degree. That’s not wrong - it’s just a different choice, and in this case it’s a choice that lets a store that I find a little bit frightening (it’s set up like a Piggly Wiggly, everything you order comes out in a flat box on a conveyor belt, and the whole operation uses like seventy percent more of the letter o than is strictly necessary and a weaponized quantity of umlauts) produce their crappy furniture for the low, low prices we’ve become accustomed to paying for this crap.

This is mostly a non-story, as evidenced by the guy in the story itself who said that he totally quit working at the place that was shit to work at to go back to crappy retail, which was less shit to work at. If the factory can’t draw workers better than Old Navy, it’s not going to stay open very long. The discrimination claims are interesting, but the fact that it’s just the one location and there’s, like, six dudes makes it difficult to distinguish from coincidence without a whole lot more information. Declining to encourage their employees to unionize is a reasonable business decision, and it’s one that I would make if I were operating a facility primarily driven by entirely unskilled labor (meaning that I can fill the positions with just about anybody). If you don’t like it, that’s another reason (beyond the fact that it’s mostly execrable and you have to build it yourself) not to buy these guys’ crappy furniture, so filter that into your purchasing decisions if you want.

It’s not a guy. It’s a 52 year old woman, because she couldn’t cancel medical appointments for her husband. She’ll be replaced by someone younger, without the burden of family. I also think you’re mischaracterizing how that vacation time difference likely came about came about.

But you’re not seeing the taxes IKEA pay for their workers in those numbers. They might pay the workers $19 an hour but the cost is more like $25-27 an hour.

No, I’m pretty sure Americans value time off over their productivity on behalf of their corporate overlords. It’s just that they can’t get it as it’s very hard to find outside of certain professions.

I’m not sure why you’d say this, it’s never come up for a vote. It’s a very hidden question inside our byzantine political system and hasn’t been directly discussed (with the exception of medical leave) since the 1940s.

Also, just because people don’t have something, doesn’t mean they don’t value it or want it.

I think if a politician in the US would propose obligatory 5 weeks of off time, he would be branded a lazy socialist.

Well but who would do the branding? In your hypothetical, I’d bet it would be powerful corporate interests with a real stake in the 2 weeks of PTO game. Knowing how things happen 'round here.

I think you are confusing “American public” with “Corporations”.

That darned old health care, it took our jobs!! Oh, wait:

What’s more, as many as one-third of the workers at the Danville plant have been drawn from local temporary-staffing agencies. These workers receive even lower wages and no benefits, employees said.

It took some of our jobs!!

Anyway, per-employee cost for health care is around $7,500 for the employer in the US, on average. That’s roughly $4/hr. So you get $12/hr to start vs $19, with no consideration of whether the Swedish employer is also paying for healthcare. Plus you need to pull back about $1/hr for the employee contribution.


Good point.

The article mentions IKEA Sweeden’s response to the pay imbalance as basically “there is a higher standard of living here”. While I would agree that the average standard of living in the U.S. probably took a measurable hit in the recent economic downturn, are we really that far below most of Europe or is this just a Sweeden thing? It would be kind of ironic if manufacturing made a comeback in the U.S. based on it being cheaper to produce quality goods here than in European countries.

I’m going to guess it’s just Sweeden though based on the economic news out of the UK, France and other EU countries in the past year or so.

Yes, Danville, VA is that far behind Sweden, I would wager. Cincy not so much, but think about the value you would derive from knowing that you never had to pay for health care again, regardless of job status or health status.


IKEA Sweden is covering their ass because Swedish corporations who engage in anti-union practices and other worker-hostile policies abroad are not looked upon kindly in Sweden and they would be chastised by media and politicians alike until they repent. That kind of negative publicity is not what IKEA wants it’s brand associated with.

So IKEA Sweden is a) saying it’s all their US division’s fault and b) stroking the collective swedish ego by claiming any perceived differences are due to Americans being poor.

That said, I’d bet good money that the standard of living in whatever town in Sweden IKEA makes furniture in is measurably higher than Danville, VA.

I pay $130 a year, max, for healthcare btw. Not including prescription medication (capped at twice that).

Does not come with dental, sadly (well, free dental up to age 18 is pretty sweet not helping me pay the bill anymore though.).

I lived in that town for 30 years, still go back a handfull of times each year. Tough times there the last decade or so. It had some of the highest unemployment in the state at 11.3 in Feb. down from 15 last year. Young people with anything on the ball leave immediately after high school. Cost of living is dirt cheap, but opportunities are non-existent too.