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DAMAGING LOS ANGELES TIMES ARTICLE ABOUT MEXICAN LABOR, Though Incomplete And Unbalanced, Puts Retailers And Receivers On Notice: In A Transparent World, Retailers In America Are Now Responsible For Their Supply Chains. A Big Question: Will Improved Conditions For Laborers Lead To Less Employment?

A few months ago, we started getting calls from US produce companies who expected to be criticized in a report in the Los Angeles Times.  They wanted to know how to position their companies and activities.

Well, now the four-section/photo-montage series is out. Richard Marosi is the author; photography and video is by Don Bartletti; and the series is a blockbuster. There is a more than decent chance it will win a Pulitzer Prize, and everyone in the produce industry should read it and watch the videos in it.

Here is the main page:

Product of Mexico

And each separate article:

Harsh Harvest

No Way Out

Company Stores

Child Labor

Portraits of Labor

You can also read the series in Spanish.

There is excellent video, photography, charts, maps and lots of text.

It may win the Pulitzer because it is thorough and large, and shows a substantial commitment of resources, and because it fits ideologically with those who judge these sort of things. But in the end, it is a piece that is incomplete and not very well thought out.

However, the industry would be very foolish to ignore it for reasons we will explain below.

The gist of the story is that many workers in the fields in Mexico are not only very poor but are forced to live in horrible situations and are treated poorly — wages withheld, food kept scarce, etc.

More specifically, there is an accusation that American companies have not intervened to ensure good treatment of workers, even though they have intervened to ensure food safety and quality for American consumers. As the piece explains:

American consumers get all the salsa, squash and melons they can eat at affordable prices. And top U.S. brands — Wal-Mart, Whole Foods, Subway and Safeway, among many others — profit from produce they have come to depend on.

These corporations say their Mexican suppliers have committed to decent treatment and living conditions for workers.

But a Los Angeles Times investigation found that for thousands of farm laborers south of the border, the export boom is a story of exploitation and extreme hardship.

The Times found:

· Many farm laborers are essentially trapped for months at a time in rat-infested camps, often without beds and sometimes without functioning toilets or a reliable water supply.

· Some camp bosses illegally withhold wages to prevent workers from leaving during peak harvest periods.

· Laborers often go deep in debt paying inflated prices for necessities at company stores. Some are reduced to scavenging for food when their credit is cut off. It's common for laborers to head home penniless at the end of a harvest.

· Those who seek to escape their debts and miserable living conditions have to contend with guards, barbed-wire fences and sometimes threats of violence from camp supervisors.

· Major U.S. companies have done little to enforce social responsibility guidelines that call for basic worker protections such as clean housing and fair pay practices.

One issue is that the author has not managed to quantify anything. Obviously if people are held as prisoner etc., this is horrible and unacceptable. But even assuming everything in the stories is accurate, how often this happens, what percentage of crop it represents… we are left not knowing if this is a regrettable anecdote or a substantial problem.

We just recently learned that in writing the University of Virginia (UVA) rape story which appeared in Rolling Stone magazine, the journalist went to visit many universities before she found one with the story line she wanted.

How many camps Mr. Marosi heard about that would NOT confirm this dramatic story is not told. There seems to be an effort to identify horror stories, not to depict the actual standards of labor in Mexico. Sometimes the story even tells on itself:

Martinez and Santiago were among at least 100 peasants recruited in the spring of 2013 by a labor contractor for Bioparques. He touted jobs at the giant export farm: Workers would earn 100 pesos (about $8) a day. Meals would be free, along with housing and child care.

After a 550-mile bus ride, the laborers arrived at Bioparques. Their home for the next three months was the Bioparques 4 camp, managed for the company by the labor contractor.

It was nothing like the company's main labor compound, which had a school, day care and other amenities.

Bioparques 4 was out of sight, a treeless expanse of dirt and rock at the end of a long dirt road. In the cluster of brick buildings, people slept on floor mats in 12-by-12-foot rooms. Two families often occupied the same room.

Mothers fashioned cribs from netting to protect their babies from scorpions. They hung plastic tarps as partitions. Fights flared over the use of the one propane stove per room.

The camp had no playground or school for the dozens of children. Some followed their parents to work. Bernabe Pascuala's 13-year-old daughter insisted on it. "She wanted to come with us because there was no school," he said.

This account of conditions in the camp is based on interviews with 13 laborers who lived there that spring. The Times interviewed some in their home villages in Huasteca and others by phone. The paper also spoke to Mexican labor inspectors and Bioparques employees and visited the camp.

But wait… why write this whole story on this particular camp and devote exactly one sentence to “the company’s main labor compound which had a school, day care and other amenities”? Wouldn't it make more sense to assess the "main" labor compound? The answer is that the author and the newspaper were looking for the Pulitzer Prize win. It is doubtful a nomination will come from a story saying that in the main everything is good but there are a few outliers needing to be reformed.

The bigger issue, though, is that all Mexican labor camps are going to be lousy… indeed all American labor camps are going to be horrid — when viewed through the prism of an upper middle class American.

Indeed, when members of the trade called us, their first instinct was to fight — to point out they were following or exceeding industry standards. We advised them to take another tack because unless they provided a two-bedroom condo with swimming pool, nothing in any of these camps would prevent an earnest journalist from finding much that the American people will find repugnant.

Yet, a thoughtful approach reveals the complexity of the problem.

First, this is not a new industry. The workers who travel hundreds of miles from the most impoverished corners of Mexico to pick produce are not pioneers. Virtually every one of them has a friend or relative who has already gone down this path. So they have intimate acquaintances with full knowledge of the pros and cons of working in the fields and yet they choose to do so.

This is really the important question to study. Why do they choose to do so? The almost certain answer is that, difficulties and all, they believe this path offers a better alternative than any other alternatives available to them.

The author states that “a Los Angeles Times investigation found that for thousands of farm laborers south of the border, the export boom is a story of exploitation and extreme hardship.” There is hardship without a doubt, but for the poor life is always hard and it is odd to call "exploitation" the providing of an alternative that people view as a better alternative than any other choice they have.

Second, after failing to address why such workers voluntarily sign up for what is supposedly such horrible work, the author claims basically that many of the workers are prisoners:

At the labor camp for Bioparques de Occidente, they and other farmworkers slept sprawled head to toe on concrete floors. Their rooms crawled with scorpions and bedbugs. Meals were skimpy, hunger a constant. Camp bosses kept people in line with threats and, when that failed, with their fists.

Escape was tempting but risky. The compound was fenced with barbed wire and patrolled by bosses on all-terrain vehicles. If the couple got beyond the gates, local police could arrest them and bring them back. Then they would be stripped of their shoes.

Martinez, 28, and Santiago, 23, decided to chance it. Bioparques was one of Mexico's biggest tomato exporters, a supplier for Wal-Mart and major supermarket chains. But conditions at the company's Bioparques 4 camp had become unbearable.

They left their backpacks behind to avoid suspicion and walked out the main gate. As they approached the highway, a car screeched up. Four camp bosses jumped out. One waved a stick at them.

"You're trying to leave,'' he said, after spotting a change of clothing in a plastic bag Martinez was carrying.

"I'm just going for a walk," Martinez said.

"Get in the car or I'll break you," the boss replied.

The next day, Martinez and Santiago were back at work in the tomato fields.

When the mistreatment of workers at the camp was finally exposed, Mexican authorities made arrests, imposed fines and promised to make an example of the company. A year and a half later, however, the case of Bioparques speaks more to the impunity of Mexican agribusiness than to accountability.

Yet in the story on “company stores,” the author makes the point that the workers often return the following season:

For Luis Hernandez, the night watchman at Campo Isabeles, the end of the 2014 harvest meant heightened vigilance. Whenever he saw someone leaving, he checked with the Gastelums to make sure the laborer had paid his debts, he said.

Some people had to hand over their belongings to settle their accounts. "They have to give up their TVs, fans, anything of value," he said.

Others jumped the barbed-wire fence when he wasn't looking, Hernandez said.

But Israel Gastelum didn't worry much about getting stuck with unpaid bills. Most laborers return for the next harvest, he said, and their jobs, and debts, would be waiting.

"If they don't pay me now," Gastelum said, "there's always next season."

There is a contradiction here. How on the one hand can the author say that people are being held prisoner, desperate to escape and yet also say they will return voluntarily next year?

Third, most of the story is less about American companies than the general dysfunction of the Mexican state. Many of the activities the author finds objectionable are already against the law — such as withholding wages and child labor.

Yet when an explanation for withholding workers’ pay is provided by industry participants, no exploration of the matter is given. Perhaps the workers don’t want their wages given while they are encamped because they might get robbed or they might be tempted to spend the money rather than save it for their families.

Maybe a little more reporting would reveal why the wages are withheld in the first place. What happened in the past when, say, weekly or monthly payments were followed? The article is silent in this area.

Fourth, the article attacks the stores that are on the work camps. The author explains that there are efforts to improve the situation:

The federal government, sensitive to the fraught history of company stores, operates its own discount outlets in some camps and sends mobile stores to others. Some agribusinesses have formed cooperatives to sell staples to laborers at low prices. But such efforts have been too limited to break the grip of the tiendas.

But there is no quantification of these efforts and, for that matter, no indication that the company stores are excessively profitable or paying excessive rents to the camp owners.

After all, these stores provide credit to penniless people and pay to locate where transportation is not necessary – to compare their prices to a discount store that doesn’t give credit and is a car ride away seems unreasonable.

Fifth, after explaining that there is almost no child labor in the main source of supply to the US, the story goes on to talk about child labor anyway:

Child labor has been largely eradicated at the giant agribusinesses that have fueled the boom in Mexican exports to the United States. But children pick crops at hundreds of small- and mid-size farms across Mexico, and some of the produce they harvest makes its way into American kitchens and markets.

Once again, though, there is no explanation of what these children would be doing if they were not working. Would they and their families really have better lives? Or would it just assuage the moral feelings of affluent American consumers?

******

Perhaps the biggest issue, which the article does not explore at all, is what the consequences would be of upgrading the situation of the field hands. Suppose there was really an effort to give workers the kinds of environments that would make Americans proud of their food supply chain? The one thing that is for certain is it would raise the price of the product and, as it did so, the labor situation would change.

Other growing areas would become more competitive and would take business away from the Mexicans.

As prices rise, consumers will shift consumption to other products which these laborers wouldn’t be involved in producing.

The series begins with a video explaining that no machine exists to harvest peppers, tomatoes or eggplant. But that is not exactly true. Tomatoes for processing are mostly mechanically harvested. It is more correct to say that with labor so inexpensive, it doesn’t pay to develop or utilize robotic technology to pick these items for the fresh market.

So if the cost of harvesting goes up, then mechanization at various levels will make sense, so our desire to ensure better conditions for these poor laborers could well end costing them their jobs and leaving them worse off than before.

That touching video about machines not being invented will need to be edited to say “we raised the price of labor and this created an incentive to develop and use machines, so between the fancy machines, shifts to production in other countries and declines in consumption as the relative price of vegetables rose compared to other foods... we now don’t have any jobs at all.”

And the journalists will lose interest because the world is filled with very poor people; it is the opportunity to think that American consumers and American retailers can fix this problem that is of interest.

So we have this extensive, high-production-value Pulitzer Prize-level material, which is really just a hit job on the industry with zero effort to quantify their charges, no effort to provide a balanced view of the situation and no level of intellectual engagement to explore the real world consequences of raising the cost of labor in a very poor country.

Yet, as we said at the beginning, the industry would be foolish to ignore this series.

Part of this is a function of the capacity of some industry members to promise more than they can deliver.

Whole Foods is specifically mentioned in the article in no small part because it runs around the country pronouncing itself as a unique kind of chain in which “values matter” — though, as we pointed out in a piece titled A Walk Through Whole Foods And Why Its ‘Responsibly Grown’ Campaign Is Bad For Farmers, Whole Foods actually buys from the same supply chain as everyone else. The company does not have 2,000 people in Mexico carefully monitoring daily behavior in the produce patch, which is probably what it would take to be true to this mantra.

In fact many retailers over-promise and under-deliver. Having policies is cheap. Getting people to sign promises under threat of losing the business is easy. Actually getting change made and sustained is very expensive and difficult.

Sure Wal-Mart could insist that each worker have a two bedroom condo similar to what one would find in a nice American suburb around a swimming pool with corporate-provided health and dental and a company car and insurance and fuel. To make it happen, it just has to pay — not a penny a pound — but, probably $3 a pound extra plus pay for the off-season. Then it would have more expensive monitoring tasks to make sure all this gold doesn’t get diverted, which would be the natural course in Mexico.

But as we discussed, doing this would provide better jobs at the expense of almost all the jobs.

Still, for the industry, the economics may not matter much. Aesthetically, no major chain will want to be associated with any of this, and they will run away from it.

That this will not help the Mexican laborers is somewhat beside the point.

A while back, in Michigan, there was a child labor issue we wrote about in a piece titled When Child Labor Laws Don’t Necessarily Help Children and the gist is that all these retailers who claimed to be horrified by child labor were only hurting the children by running away. Nobody was standing up to establish summer programs or other amenities for the children.

So, even though allowing low cost labor to be a competitive advantage might, in the long run, be the best option for the poor Mexican laborers, the industry can’t afford any affiliation with these stories and videos.

This is what it means to live in a social media world. Today it is the Los Angeles Times but, soon, it will be a daily assault on Facebook and so on.

One of the people interviewed in the child labor story tells what almost certainly is a tale about separating the chili peppers that were grown with child labor to sell in Mexico, while the ones picked by adults go to America. Yet, though the claim seems unlikely, the idea is actually a vision of the future. In developing countries, production for America has to increasingly be done in little enclaves of western standards.

The produce will cost what it costs; the flow of world trade will be altered and the poorer a country is the more likely investment will be diverted away as creating an American suburb in poor countries with poor governance will often be more expensive than just growing in more developed countries.

But transparency on the supply chain is increasingly going to be demanded, and this article is neither the first nor the last. The newspaper’s effort in putting together graphs showing the flow of produce is a game-changer. It is telling retailers from Whole Foods to Wal-Mart that you own your supply chain and you will be held responsible for all that occurs within it.

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