Goings On

Ikea's first American Factory is a Sweatshop

1 May 2011

For most Americans, sweatshops were slave galleys that American companies pretended they didn't have in Asia. Till some Swedish furniture factory set up shop in recession-beggared Swedwood in the state of Virginia and hired 335 workers for $8 an hour, with 12 days off a year. Meanwhile, they learnt that the company—the legendary flat-packed furniture-maker IKEA—gave its European workers a minimum of $19 an hour, with five weeks' paid vacation a year. Today, three years after IKEA landed, Swedwood's workers are trying to form a union—and IKEA has responded with mandatory re-education meetings, a scorching indignity among others that include alleged racist behaviour, forced overtime and weekend work. Registered as a charitable nonprofit, IKEA paid 3.5 percent as taxes on a profit of €2.7 billion last year; its 2010 charitable outgo was less than a quarter of a percent of its wealth. Moreover, the foundation that runs IKEA is richer, at $36 billion, than the Bill & Melinda Gates Foundation. This must hurt like hell.

For most Americans, sweatshops were slave galleys that American companies pretended they didn't have in Asia. Till some Swedish furniture factory set up shop in recession-beggared Swedwood in the state of Virginia and hired 335 workers for $8 an hour, with 12 days off a year. Meanwhile, they learnt that the company—the legendary flat-packed furniture-maker IKEA—gave its European workers a minimum of $19 an hour, with five weeks' paid vacation a year. Today, three years after IKEA landed, Swedwood's workers are trying to form a union—and IKEA has responded with mandatory re-education meetings, a scorching indignity among others that include alleged racist behaviour, forced overtime and weekend work. Registered as a charitable nonprofit, IKEA paid 3.5 percent as taxes on a profit of €2.7 billion last year; its 2010 charitable outgo was less than a quarter of a percent of its wealth. Moreover, the foundation that runs IKEA is richer, at $36 billion, than the Bill & Melinda Gates Foundation. This must hurt like hell.

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