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Europe’s Thirst for Cheap Labor Fuels a Boom in Disposable Workers Europe’s Thirst for Cheap Labor Fuels a Boom in Disposable Workers
(about 2 hours later)
PARDUBICE, Czech Republic — As dusk settled over the rambling Czech countryside, a group of haggard workers emerged from a dank three-story cement dormitory and jammed into buses. The evening shift was about to begin at two nearby factories owned by Foxconn and Panasonic. PARDUBICE, Czech Republic — As dusk settled over the rambling Czech countryside, a group of haggard workers emerged from a dank three-story concrete dormitory and jammed into buses. The evening shift was about to begin at two nearby factories owned by Foxconn and Panasonic.
Most of the workers had been recruited from Romania, Bulgaria and other central European countries by a large employment agency. When their contracts are up, they will be sent home, with another group of migrant workers brought in as required — replaceable cogs in a tireless machine. Most of the workers had been recruited from Romania, Bulgaria and other Central European countries by a large employment agency. When their contracts are up, they will be sent home, with another group of migrant workers brought in as required — replaceable cogs in a tireless machine.
Across Europe, nearly 55,000 agencies recruit hundreds of thousands of temporary workers each year for cheap manual labor and service jobs. The agencies allow employers to tap into a more flexible work force — and avoid some of the region’s more onerous labor costs.Across Europe, nearly 55,000 agencies recruit hundreds of thousands of temporary workers each year for cheap manual labor and service jobs. The agencies allow employers to tap into a more flexible work force — and avoid some of the region’s more onerous labor costs.
Those agencies recruiting manual labor scour the Continent for people willing to pick vegetables in Britain, pour concrete in France or work assembly lines in Eastern Europe. The monthly salaries can average out to as little as 3.50 euros, or about $4.10, an hour — less than the minimum wage in some of the countries where their employees are sent to work. Some agencies control entire labor supply chains, transporting recruits across borders, lodging them, bussing them to and from job sites, and then moving them elsewhere when they’re no longer needed. Those agencies recruiting manual labor scour the Continent for people willing to pick vegetables in Britain, pour concrete in France or work assembly lines in Eastern Europe. While they receive monthly pay, they often work long days, so their wages can average out to as little as 3.50 euros, or about $4.10, an hour — less than the minimum wage in some of the countries. Some agencies control entire labor supply chains, transporting recruits across borders, lodging them, busing them to and from job sites, and then moving them elsewhere when they’re no longer needed.
The practices are legal under rules that allow European citizens to work anywhere in the 28-nation bloc. But as employers outsource more workers and deepen their reliance on shorter-term contracts to cut costs, European regulators are increasing their scrutiny. About a third of Europeans are now in some form of atypical employment, ranging from Uber drivers to pilots, and there are concerns that basic labor protections, including social security benefits and sick leave, are being eroded.The practices are legal under rules that allow European citizens to work anywhere in the 28-nation bloc. But as employers outsource more workers and deepen their reliance on shorter-term contracts to cut costs, European regulators are increasing their scrutiny. About a third of Europeans are now in some form of atypical employment, ranging from Uber drivers to pilots, and there are concerns that basic labor protections, including social security benefits and sick leave, are being eroded.
For companies, the challenges of hiring low-cost workers are growing: An economic recovery is shrinking the pool of cheap labor that initially attracted Foxconn and others to Europe. Employment agencies like Xawax, which finds workers for the Foxconn and Panasonic factories, are an important conduit.For companies, the challenges of hiring low-cost workers are growing: An economic recovery is shrinking the pool of cheap labor that initially attracted Foxconn and others to Europe. Employment agencies like Xawax, which finds workers for the Foxconn and Panasonic factories, are an important conduit.
For migrant workers, the choice is difficult. Those from poorer European countries are eager to find better paying jobs. But the agencies sometimes operate in a gray area: requiring workers to sign contracts in foreign languages, and saddling them with conditions and pay that few in-country nationals would accept.For migrant workers, the choice is difficult. Those from poorer European countries are eager to find better paying jobs. But the agencies sometimes operate in a gray area: requiring workers to sign contracts in foreign languages, and saddling them with conditions and pay that few in-country nationals would accept.
Nearly a dozen workers at the Pardubice plants, all of whom spoke on condition of anonymity for fear of losing their jobs, said that they had possessed little understanding that the contracts they had signed would expose them to frequent overtime shifts, including nights and weekends, while leaving them constantly on call. The Czech government is conducting an inquiry into Foxconn’s employment practices. Nearly a dozen workers at the Pardubice plants, all of whom spoke on the condition of anonymity for fear of losing their jobs, said they had possessed little understanding that the contracts they had signed would expose them to frequent overtime shifts, including nights and weekends, while leaving them constantly on call. The Czech government is conducting an inquiry into Foxconn’s employment practices.
One Romanian couple was jobless until they saw a Xawax ad on Facebook this summer. One Romanian couple were jobless until they saw a Xawax ad on Facebook this summer.
The couple, ages 23 and 24, said a recruiter promised free lodging, regular shifts and wages on par with Czech factory workers — at least €585 a month — better than what they could get in Romania. They boarded a bus packed with other recruits bound for Pardubice. There, they signed a six-month employment contract with Xawax that was written in Czech, a language they couldn’t comprehend, without a translator present. The couple, ages 23 and 24, said a recruiter had promised free lodging, regular shifts and wages on par with Czech factory workers — at least €585 a month — better than what they could get in Romania. They boarded a bus packed with other recruits bound for Pardubice. There, they signed a six-month employment contract with Xawax that was written in Czech, a language they couldn’t comprehend, without a translator present.
At 5:30 the next morning, they were transported to the Panasonic factory to join more than a hundred laborers in a cavernous hall assembling electronic components. The couple said Xawax soon told them they would have to frequently work overtime or earn bonuses to receive their promised wage. The terms were included in the contract they could not understand. After the woman got sick at work and fainted one evening, requiring her to be rushed to a hospital, she said she received little help from the agency in organizing follow-up treatment. At 5:30 the next morning, they were transported to the Panasonic factory to join more than a hundred laborers in a cavernous hall assembling electronic components. The couple said Xawax had soon told them that they would have to frequently work overtime or receive bonuses just to get their promised wage. The terms were included in the contract they could not understand. After the woman got sick at work and fainted one evening, requiring her to be rushed to a hospital, she received little help from the agency in organizing follow-up treatment, she said.
Katerina Kotrla, the director of a nongovernmental organization that helps migrants in Pardubice, said such workers tended to be more easily exploited and had little recourse. Ms. Kotrla has handled numerous cases in which agencies, including Xawax, stayed within the law but nonetheless provided inadequate health care assistance, reduced pay when injuries prevented people from working, or didn’t pay overtime. Katerina Kotrla, the director of a nongovernmental organization that helps migrants in Pardubice, said such workers tended to be more easily exploited and had little recourse. Ms. Kotrla has handled numerous cases in which agencies, including Xawax, stayed within the law but provided inadequate health care assistance, cut pay when injuries prevented people from working or didn’t pay overtime.
“The agencies have a lot of power over these people,” she said.“The agencies have a lot of power over these people,” she said.
Jan Hendrych, the chief executive of Wincott People Group, one of Eastern Europe’s largest employment agencies, which acquired Xawax this year, said his company followed the labor laws of all countries where it hired workers and was unaware of such practices. But if an internal inquiry showed Xawax had engaged in them, he said, “that kind of behavior is obviously unethical at the very least, and must be stopped.” He added that Wincott had worked with the Czech government on measures to clean up irregular agency practices, which would help attract workers.Jan Hendrych, the chief executive of Wincott People Group, one of Eastern Europe’s largest employment agencies, which acquired Xawax this year, said his company followed the labor laws of all countries where it hired workers and was unaware of such practices. But if an internal inquiry showed Xawax had engaged in them, he said, “that kind of behavior is obviously unethical at the very least, and must be stopped.” He added that Wincott had worked with the Czech government on measures to clean up irregular agency practices, which would help attract workers.
In a statement, Foxconn Technology Group said that it and the agencies that recruited on its behalf had ensured workers received wages and benefits above the Czech Republic’s basic requirements. Foxconn added that its operations were regularly audited, and that it complied with relevant local laws and regulations. In a statement, Foxconn Technology Group said it and the agencies that recruited on its behalf had ensured workers received wages and benefits above the Czech Republic’s basic requirements. Foxconn added that its operations were regularly audited, and that it complied with relevant local laws and regulations.
Panasonic said it relied on agencies like Xawax to recruit workers amid a tight labor market and that both parties complied with Czech labor law. In a statement, the company added that migrant workers, who hold agency contracts, did not work beyond the legal workweek and were paid above the Czech minimum wage. Panasonic said that it relied on agencies like Xawax to recruit workers amid a tight labor market and that both parties complied with Czech labor law. In a statement, the company added that migrant workers, who hold agency contracts, did not work beyond the legal workweek and were paid above the Czech minimum wage.
Pardubice became a low-cost manufacturing hub after the fall of Communism.Pardubice became a low-cost manufacturing hub after the fall of Communism.
It managed to attract Foxconn in 2000 after the Czech government gave the company a 10-year investment tax break. Foxconn quickly energized the region, buying a mothballed electronics factory and hiring thousands of workers. Restaurants, clothing stores and other businesses soon sprang up to cater to the growing population.It managed to attract Foxconn in 2000 after the Czech government gave the company a 10-year investment tax break. Foxconn quickly energized the region, buying a mothballed electronics factory and hiring thousands of workers. Restaurants, clothing stores and other businesses soon sprang up to cater to the growing population.
Agencies like Xawax are a powerful tool for Foxconn and other manufacturers to juice productivity and manage costs.Agencies like Xawax are a powerful tool for Foxconn and other manufacturers to juice productivity and manage costs.
The Taiwanese company has assembled electronics for HP, Dell and Cisco, using recruitment agencies to expand or shrink its labor force around production cycles. At its peak, about half of a nearly 10,000-person work force were temporary workers; today, the company said, there are 4,000 workers, of which 20 percent to 30 percent are temps.The Taiwanese company has assembled electronics for HP, Dell and Cisco, using recruitment agencies to expand or shrink its labor force around production cycles. At its peak, about half of a nearly 10,000-person work force were temporary workers; today, the company said, there are 4,000 workers, of which 20 percent to 30 percent are temps.
The agencies give Foxconn and other companies another advantage: The workers aren’t technically employed by Foxconn. The setup transfers legal and other responsibilities, including the risk of potential labor violations, to the agency.The agencies give Foxconn and other companies another advantage: The workers aren’t technically employed by Foxconn. The setup transfers legal and other responsibilities, including the risk of potential labor violations, to the agency.
In the cement dorms, which are managed by Xawax and other agencies, workers from Romania, Slovakia and elsewhere filed in from an afternoon shift and cooked a modest meal in a threadbare communal kitchen. They were tired, but neither the heat nor the hot water was working. One grumbled that he had lost pay after he injured his arm on the assembly line. Still, the workers said, they needed the money. In the concrete dorms, which are managed by Xawax and other agencies, workers from Romania, Slovakia and elsewhere filed in from an afternoon shift and cooked a modest meal in a threadbare communal kitchen. They were tired, but neither the heat nor the hot water was working. One grumbled that he had lost pay after he injured his arm on the assembly line. Still, the workers said, they needed the money.
Momentum has been building for greater protections. The European Commission, the European Union’s executive arm, is proposing a new labor authority to fight questionable employment schemes. President Emmanuel Macron of France wants to tighten labor rules in the region.Momentum has been building for greater protections. The European Commission, the European Union’s executive arm, is proposing a new labor authority to fight questionable employment schemes. President Emmanuel Macron of France wants to tighten labor rules in the region.
Companies like HP and Cisco, which contract Foxconn in the Czech Republic to assemble electronics goods, have also created strict codes of conduct for the ethical management of foreign migrant workers by their suppliers.Companies like HP and Cisco, which contract Foxconn in the Czech Republic to assemble electronics goods, have also created strict codes of conduct for the ethical management of foreign migrant workers by their suppliers.
Dell said it required suppliers ensure migrant workers receive contracts that enumerate employment terms in a language they understand, and worked with suppliers to correct violations. A recent assessment of Foxconn’s production in the Czech Republic did not identify any issues related to migrant workers, Dell added. Dell said it required that suppliers ensure migrant workers receive contracts that enumerate employment terms in a language they understand, and worked with suppliers to correct violations. A recent assessment of Foxconn’s production in the Czech Republic did not identify any issues related to migrant workers, Dell added.
Here in the Czech Republic, the authorities have been looking into Foxconn’s labor practices, though Jiri Vanasek, the deputy labor minister, acknowledged it can be hard to prove wrongdoing. The government is also scrutinizing the country’s many employment agencies. It recently imposed a registration fee to discourage attempts by agencies to change their names frequently to avoid issuing permanent contracts once temporary ones have expired, and to clamp down on fly-by-night operators. Here in the Czech Republic, the authorities have been looking into Foxconn’s labor practices, though Jiri Vanasek, the deputy labor minister, acknowledged it can be hard to prove wrongdoing. The government is also scrutinizing the country’s many employment agencies. It recently imposed a registration fee to discourage attempts by agencies to change their names frequently to avoid putting workers in full-time jobs once temporary contracts have expired, and to clamp down on fly-by-night operators.
Critics say, however, that despite efforts to increase protections, European regulators need to close loopholes in labor laws that foster unstable employment, low wages and a cycle of precariousness.Critics say, however, that despite efforts to increase protections, European regulators need to close loopholes in labor laws that foster unstable employment, low wages and a cycle of precariousness.
“If there’s a race to the bottom,” said Rutvica Andrijasevic, a senior lecturer at the University of Bristol who has researched Foxconn’s impact on European labor standards. “It’s being driven by our own governments.” “If there’s a race to the bottom,” said Rutvica Andrijasevic, a senior lecturer at the University of Bristol who has researched Foxconn’s impact on European labor standards, “it’s being driven by our own governments.”