Enhanced employee benefits like paid sick leave have been rolled back for some workers, according to investor network FAIRR.
(Bloomberg) — Meat companies still don’t have enough workers to staff slaughterhouses, leading to rising prices and even some acute supply shortages. That’s a problem of their own making because of poor labor practices, according to an investor group that focuses on ESG issues.
While global meat companies boosted pay and other benefits in the wake of the pandemic that started in 2020, some of the enhanced offerings have since been rolled back or weakened, including in some cases, paid time off for sick leave, according to a report from the FAIRR Initiative released Tuesday. The group, which represents investors with $70 trillion in combined assets, also pointed to the use of subcontracted workers as leaving companies vulnerable to facilitating unethical labor conditions.
The meat industry has come under greater scrutiny since the start of the pandemic, when crowded processing plants became hot spots for Covid-19 outbreaks — thousands of the industry’s workers fell ill, and dozens died. Producers have struggled with a reputation of difficult conditions since the days of Upton Sinclair, the American author who wrote of abuses in his 1906 novel, “The Jungle.” And even in the modern era, reports have surfaced of cramped conditions, low wages and even bathroom breaks that are so minimal some workers resort to wearing diapers.
Meanwhile, meat prices in the US and globally soared amid limited supplies, outpacing the inflation seen in many other food staples. And the industry has faced difficulty hiring more workers amid great competition in the labor market. In January, prices for meat were 2.2% higher than a year ago, according to Labor Department data published Tuesday.
“Evidence shows that shortages are becoming more prevalent and are linked to poor working conditions,’’ the FAIRR report said, referring to labor crunches. “This is a major risk, which is impacting production and profits.”
Some companies, such as Tyson Foods Inc. and JBS USA, the two biggest US producers, are disclosing information on sick pay to investors; others are not, such as WH Group, owner of pork producer Smithfield Foods Inc., according to the report. That makes the industry more opaque than many others. Tyson, JBS and Smithfield didn’t immediately respond to requests for comment from Bloomberg News.
“The industry is not attractive to workers currently — people don’t want to work there,” said Siân Jones, an analyst at FAIRR.
During April and May of 2020, at least 91 people who worked at meat plants died from Covid-19, and there were at least 17,358 confirmed cases, according to a Centers for Disease Control and Prevention report. A subsequent labor shortage forced many plants to shut down temporarily, which contributed to meat shortages and sent beef and chicken prices soaring to records.
Companies then boosted hourly wages and offered sick time and other increased benefits, such as childcare and college assistance. That has helped some to improve staffing levels — Tyson’s Chief Executive Officer Donnie King last week in an earnings call said the company was “fully staffed.’’
More work is needed, though, said Mark Lauritsen, vice president of meatpacking at the United Food and Commercial Workers Union, which represents thousands of plant employees. While workers are making a “lot more’’ than they were before the pandemic, more attention needs to be paid on safety and health protocols, Lauritsen said.
“I don’t want to say it’s worse,’’ Lauritsen said of plant conditions. “It’s different.’’
Some Brazilian companies have done more than their US counterparts in terms of transparency, said Jones of FAIRR. The group said Brazil’s Marfrig Global Foods SA “stands out” as the company most improved in engagement, with disclosure across four key areas: grievance mechanisms, sick pay, the distribution of its workforce across employment contract types and worker representation. In an emailed comment, Marfrig said the report shows the company “consistently stood out positively in relation to policies and practices.”
–With assistance from Tatiana Freitas and Agnieszka de Sousa.
(Adds meat prices in fourth paragraph. A previous version corrected the spelling of a name.)
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