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Study finds abuses in warehouse industry

May 17, 2012|By Alana Semuels
  • A sign advertises for male laborers in New Brunswick, N.J., one of the "temp towns" popping up.
A sign advertises for male laborers in New Brunswick, N.J., one of the "temp… (New Labor )

Logistics, the art of bringing socks and TVs and carrots from where they're made to a store near you, is a trillion-dollar industry in the U.S., and continuing to grow.

The industry grew 10% in the middle of a deep recession, according to a report last year, and helps companies such as Wal-Mart, Target and Amazon get goods to you in increasingly cheap ways.

But the logistics industry may also be driving down standards of living, according to a report out today by Jason Rowe of the Kennedy School of Government at Harvard University, in partnership with New Labor, a workers rights group.

Rowe surveyed 291 workers in New Jersey's logistics industry and found deep problems in the way companies operate in towns off the New Jersey Turnpike. The Port of Newark/Elizabeth transported 81 million metric tons of cargo in 2010 alone, and is expected to grow in importance in the logistics industry when the Panama Canal is extended, scheduled for 2014. 

Nearly two-thirds of workers in the logistics industry are employed through staffing agencies but paid less than permanent employees, even though they may be performing the same duties and work 40 hours a week on average, Rowe found. More than one in five make less than the federal poverty level, and nine in 10 are uninsured. One-third said they were not paid in full for wages that they had earned.

More labor groups are reporting problems with staffing and temporary help agencies as the practice grows. In 2009, contingent workers made up 17% of the workforce, according to Christopher Dwyer, a logistics analyst with Aberdeen Group. This year, they'll make up 26%.

In some regions, "temp towns" are popping up in Latino neighborhoods in northern New Jersey, Rowe found. Workers share houses in these temp towns, and are shuttled to work by the staffing agencies, which sometimes cram 17 people into one minivan.

Workers’ transportation costs -- on average, $7.33 a day -- are deducted from their weekly paychecks. Some workers report being left behind by the vans at the end of the day; others say they are brought to different companies and locations without being told who they are working for, or even what town they're in.

Agencies also violate employment laws by advertising specific jobs for men and for women, Rowe found. Title VII of the 1964 Civil Rights Act prohibits employers from discriminating on the basis of race, color, religion, sex or national origin.

Wal-Mart and other retailers have a code of standards for suppliers, which requires staffing agencies and logistics companies to follow labor laws, Rowe said. But, he wrote, "given the widespread wage theft, gender discrimination, disregard for workplace health and safety, and dangerous transportation practices captured in the survey, it seems clear that these ethical standards are routinely flouted by the actors in the big-box logistics chain."


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