Is America Europe's Mexico?

Free Exchange led me to this piece from the LA Times.  To quickly summarize, the story discusses an Ikea manufacturing plant in Danville, Virginia.  Workers there are apparently trying to unionize, claiming they are suffering from relatively low pay, strict work conditions, unpredictable schedules, forced overtime and multiple cases of racial discrimination.  The workers are also taking issue with the fact that employees doing virtually identical jobs at facilities in Sweden enjoy higher pay, better conditions and more paid vacation.

Ikea has a relatively friendly image, both here in the States and in its home country.  It is generally known as a responsible company and allows all of its employees in Sweden to unionize.  According to the article, this has been a much bigger story in Sweden than in the US due to surprise at the companies seemingly incongruent actions.  However, I don't see why anyone should be surprised.  This is what companies do.  Any operation that can be sent to an area with lower wages and weaker labor protections will be sent there.  It just isn't that often that we in the US think of ourselves as a cheap labor substitute for more expensive workers.  Driving home the point, an organizer from Danville, Bill Street said, "It's ironic that Ikea looks on the U.S. and Danville the way that most people in the U.S. look at Mexico."

Unfortunately, Americans had better get used to it.  Already within the country, states compete with one another by weakening environmental and labor laws in order to attract jobs from other states or other countries.  This race to the bottom has set off pushes in many states to pass Right to Work laws to compete with lower wage states.  The Commonwealth Foundation, a conservative think tank here in Pennsylvania, is a strong supporter of such a policy.

I have no doubt that this sort of competition is going to become increasingly common as states desperately try to boost employment.  So more states will be forced to compete with each other like they used to compete with Southeast Asia and Latin America.  And all the while, we'll be even cheaper labor for our new Scandinavian overlords.

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