The Multinational Monitor

JULY/AUGUST 1995 · VOLUME 16 · NUMBERS 7 & 8


B E H I N D    T H E     L I N E S


Kmart's Keystone Kops

Retailing goliath Kmart has agreed to stop spying on its workers following complaints by workers and a government investigation alleging that the Troy, Michigan-based retailer hired private investigators from Chicago's Confidential Investigative Consultants, Inc. to spy on workers during a Chicago unionization drive by the Teamsters in 1993.

In a June 19, 1995 consent decree with the National Labor Relations Board, Kmart agreed to "not engage in surveillance of employees" during union activities or "restrain, or coerce employees in the exercise of any right they might have."

Kmart hired private investigators to pose as workers, says Cynthia Kain, a Teamsters spokesperson. "They reported on workers' personal lives and their shopping habits, including whether they shopped at Walmart. The reports were really intrusive." The Teamsters contend that accounts submitted to Kmart by the agents sometimes contained detailed descriptions of family problems and sex lives of workers. The Teamsters allege that the agents tried to convince employees to steal merchandise, such as candy. Workers reported that goading agents told them, “Nobody would notice it was gone."

More than 50 Kmart workers are pursuing civil invasion-of-privacy suits.

Kmart spokesperson Mary Lorencz denies these reports; the company has not made any admission of wrongdoing. The private eyes were hired to uncover a theft ring, Lorencz says.


McFood Stamps

The Washington, D.C.-based Campaign for an America that Works awarded McDonald's its "Hog of the Month" Award in July 1995 for the $1.6 million in government subsidies the fast-food giant received to promote Chicken McNuggets in Turkey.

The subsidies, provided under the Agriculture Department's Market Promotion Program (MPP) between 1986 and 1993, give McDonald's "a break today at our expense," says Teamsters president Ron Carey, a campaign member. "Ronald McDonald shouldn't be feeding at the public trough."

The MPP is intended to open up markets abroad for U.S. products, particularly in those countries deemed to have unfair trading practices. "What the program has become," says Liz Nicholson, an assistant to Representative Richard Zimmer, R-New Jersey, "is a giveaway to large American corporations that are using program money to underwrite advertising."

Zimmer is co-sponsoring a bill along with Representative Charles Schumer, D-New York, that would eradicate the MPP.

Other firms with advertising subsidized by the Agriculture Department include the Blue Diamond nuts company ($37 million), Dole fruit company ($9 million), whiskey-maker Jack Daniels ($2.4 million), baked goods manufacturer Pillsbury ($10 million) and fruit juice companies Sunkist ($67 million) and Welches ($5.8 million), reports Nicholson.

While McDonald's wasn't the largest program recipient, "it really exemplifies how wasteful the program is," says Teamsters spokesperson Cynthia Kain. McDonald's is the most high-profile and profitable of program recipients, Kain says.

Moves to eradicate the MPP are "shortsighted," says Jim Petterson, a Department of Agriculture spokesperson. "We get $16 worth of exports for every dollar of the program. This year we're looking at record exports and one of the tools that have boosted these numbers is the MPP."

"There are a lot of examples of small companies that benefit from the program," says Petterson, noting that 40 percent of monies under the program go to small businesses with another 40 percent going to industry associations.

Nicholson says much of the money going to industry associations for the promotion of generic products is then passed on to large corporations. "Almost half the money is going into the pockets of Pillsbury, Gallo Wines, Jack Daniels and other very large corporations," she says.

McDonald's did not respond to requests for comment.


World Bank Labor Pains

The first report issued by the World Bank since its new president took charge contains a familiar anti-union theme, critics say.

The 50 Years is Enough Campaign, a coalition of development organizations, said in June 1995 that the recently released World Development Report "represents a continued adherence by the Bank to a set of economic policies that have benefited foreign investors and driven workers, small farmers and businesspeople towards poverty."

"You would think that Bank President James Wolfensohn would have taken greater care that the first document released under his stewardship would be something other than a warmed-over treatise arguing for wage suppression and against organized labor," says Pharis Harvey, executive director of the International Labor Rights Education and Research Fund, a campaign member. "The World Development Report is a body blow to those throughout the Third World struggling to earn a fair wage and a decent living for their families."

The World Bank report's authors argue that "the actions of unions can adversely affect the distribution of income" and that "trade unions have sometimes wielded their political power against structural adjustment" programs, which the Bank prescribes to Third World countries. While acknowledging that unions can sometimes enhance productivity and equality, the Bank report also knocked unions as "monopolists, improving wages and working conditions for their members at the expense of capital holders, consumers, and nonunion (unorganized) labor. The higher wages unions win for their members either reduce business profits or get passed on to consumers in the form of higher prices."

The 50 Years campaigns criticizes the World Bank report for rejecting links between international labor rights and international trade and for blaming unemployment on unionization, minimum wages and health and safety measures.

The World Bank declined to comment on the criticisms.

- Craig Forcese

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