Ikea has a reputation for fair dealing, good labor practices and, well, being Scandinavian, which means being a better corporate citizen overall. Then last week we learned that Ikea stores are designed to intentionally confuse us and trick us into buying more stuff.
Now, The Los Angeles Times reports that Ikea's U.S. factory is behaving very un-Swedish and, to the dismay of the workers there, much more American. The Times reports of the Danville, Virginia plant that "workers complain of eliminated raises, a frenzied pace, and mandatory overtime" along with claims of racial discrimination. Efforts to organize a union are also being met with high-paid legal opposition, according to the Times.
None of this is especially new in America, but it's shocking in Sweden, where Ikea is considered a national corporate treasure, most workers are happily unionized and things are considerably better. The Times compared Ikea workers here with their counterparts across the pond:
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.
Is America becoming the source of cheap labor for European companies? This is what it must feel like to be Mexico post-NAFTA.
On the upside, Ikea is likely to be especially susceptible to public pressure on the issue of labor practices, even with a U.S. subsidiary, as its image as being generally fair is too valuable to toss away.