Update on Hershey's Funky Globalization

In my previous post, I discussed the State Department's J-1 visa program, which brings over foreign students for alleged cultural exchanges. The program was tied to a series of abuses at Hershey's packaging facility that led to a walkout by student workers and two stories in the New York Times.

What's the deal with this visa program? In reality, it turns out to be a way to import cheap workers for the summer, on a larger scale than I realized.

According to an op-ed piece by Fordham University law professor Jennifer Gordon in the New York Times, this program

has become the country’s largest guest worker program. Its “summer work travel” component recruits well over 100,000 international students a year to do menial jobs at dairy farms, resorts and factories — a privilege for which the Hershey’s students shelled out between $3,000 and $6,000. They received $8 an hour, but after fees and deductions, including overpriced rent for crowded housing, they netted between $1 and $3.50 an hour. Hershey’s once had its own unionized workers packing its candy bars, starting at $18 to $30 an hour. Now the company outsources distribution to a non-union company that hires most of its workers from the J-1 program.

Why would employers like Hershey go for such a program? Gordon writes,

the J-1 program is attractive to employers because it is uncapped and virtually unregulated; companies avoid paying Medicare, Social Security and, in many states, unemployment taxes for workers hired through the program. One sponsor authorized by the State Department even offers a “payroll taxes savings calculator” on its Web site, so potential employers can see how much they would save by hiring J-1 visa holders rather than American workers. Visa holders can be deported if they so much as complain, and cannot easily switch employers.

Well, that explains it. Companies get compliant summer workers and save on payroll taxes. The sponsors and contractors who arrange it all make good money. But the young people have little or no recourse to alter their situation and are stuck here (at least for the summer). Everybody's happy, it seems, but the foreign students who were expecting cultural exchanges. And if they don't like it, they can get deported.

As Gordon points out, these students are getting a taste of today's corporate America, which relies on outsourcing and subcontracting to avoid responsibility. It turns out that they do get real cultural exchange, a real taste of real America. Unfortunately, it's a bitter taste, not all the sweetness of Hershey's chocolates they were expecting.

Students, welcome to America!

Funky Globalization in Hershey, PA

Americans love Hershey chocolate bars and think of them as all-American. But some funky globalization-related things happened recently at the packaging facility that ships Hershey candies in Pennsylvania. And these happenings were definitely not all-American.

It turns out that Hershey, Inc. has been subcontracting with subcontractors who partner with another subcontractor to bring over groups of foreign university students to work in packaging facilities in the summers. The students coming over this year under the State Department's J-1 visa program were expecting to see the USA, earn a little money, and participate in cultural exchanges.

Instead, the only American culture these poor students were immersed in was our corporate culture. The 400 or so students were surprised to find themselves working physically demanding jobs at a packaging facility for Hershey, wrapping up Kit-Kat bars, Reese's candies, and Almond Joys. Many of them were forced to work on the night shift, and all of them were forced to work eight hour shifts under pressure and surveillance. Still, it wasn't the jobs that put the students over the edge. According to the New York Times, "the students said they decided to protest when they learned that neighbors in the apartments and houses where they were staying were paying significantly less rent."

Fed up, then, the students went on strike. While their immediate frustrations with their jobs caused them to walk out, their larger frustrations were with the brokers who promised them visions of cultural exchange, who forced them to pay up to $4,000 to come to the U.S., and who then over-charged them for rent. Many of the students were expecting to make a little money but now expect to return home having lost money on the deal. And all they got to see was Hershey Chocolate World! : (

How is globalization demonstrated here? For one thing, America's sales culture has been exported abroad: These foreign students learned all too well that you should never trust strangers who make big promises. Meanwhile, the students' desire to visit America is an interesting case study of international migration, as is the State Department's J-1 visa program. A cynic might say that the U.S. government is allowing the temporary migration of cheap guest workers for corporate interests, but the State Department classifies the J-1 visa as an Exchange Visa, which suggests an original intent to promote those exchanges. Students expecting to work in Willy Wonka's chocolate factory were expecting to participate in some global cultural exchange (Hersheys Chocolate World doesn't count).

And the most interesting globalization aspect in this story is the use of multiple subcontractors, a classic corporate and government tactic for outsourcing ultimate responsibility. After the story was published, the followup story pointed out how four different companies all blamed each other. This is what makes globalization so frustrating to people: no one is taking responsibility! This passage was especially telling:

The Hershey Company said it had contracted day-to-day operations at the packing plant to Exel, a logistics company. “The Hershey Company expects all its vendors, including Exel, to treat employees fairly and equitably,” said Kirk Saville, a spokesman.

Exel contracted with a local labor supplier, SHS Staffing Solutions, to provide temporary workers, including the J-1 students, for the summer months when work is at a peak, said Lynn Anderson, a spokeswoman for Exel.

SHS Staffing said its main function was to handle payroll and schedules for the students.

Along with the non-profit organization that recruited the students to come to the U.S., the Council for Educational Travel U.S.A., we have four organizations with a hand in this. Of those four, who is responsible? Hershey? Exel? SHS Staffing Solutions? The Council for Educational Travel? The students? All of the above? It isn't clear.

In any case, we know about this story because the students and the labor union friends decided to create some noise. Whether or not their complaints are justified, this is a fascinating dimension of globalization. How many of these J-1 visas are granted every year? And how many of these foreign students come over expecting cultural exchange only to get stuck working in miserable summer jobs? And how many of those jobs could be filled by young American citizens? In a time of high unemployment, it makes you wonder.

Do readers out there have any experiences with foreign young people in summer jobs on these J-1 visas?