At a penny per pound, a little adds up to a lot

By ROBYN BLUMNER, Times Columnist
Published November 25, 2007

Would you pay an extra penny per pound of tomatoes if you knew it meant farmworkers who make an average $10,000 to $12,500 a year would nearly double their wages?

Anyone who said "no" to that question need not bother with the rest of the column. You can just return to whatever else you were doing, stiffing the waiter, kicking the dog, making that payday loan, whatever.

November marks the start of Florida's winter tomato season, and the migrant laborers who harvest that crop are looking to expand a deal they secured with McDonald's and Yum Brands, owner of Taco Bell, Pizza Hut and other restaurant chains. These corporations signed an agreement with the Coalition of Immokalee Workers, a labor rights group in the heart of Florida's agricultural belt, to pay workers an extra penny for every pound of tomatoes they pick.

This doesn't sound like much, and objectively it isn't. But it would mean the world to workers who currently make an average of 45 cents per 32-pound bucket - a piecemeal rate that has remained virtually the same since 1980. That means workers have to pick about two tons of tomatoes to earn $56. The raise would bring them to $96 for the same work.

The coalition initially tried to convince the growers to pay the added penny but they wouldn't budge, so the group sought to enlist fast-food giants instead. Go to the major buyers who have reputations to uphold and have them pay the penny. It was a brilliant stroke.

Consumers tend to respond well to a company they think is socially responsible, and the converse is true. A new study by researchers Michael Hiscox and Nicholas Smyth at Harvard University confirms that consumers not only say they're willing to pay more for products made under decent working conditions but act that way too.

The team conducted a social experiment at ABC Carpet and Home store in Manhattan. (Wal-Mart, Target, Gap, Timberland and numerous others refused to participate, the researchers say.)

ABC labeled decorative candles and towels as being made under "fair labor" standards and then charged 10-20 percent more for them relative to the unlabeled alternatives. Sales of the labeled, premium priced items actually rose, up to 30 percent for the candles and 20 percent for the towels.

If this holds more generally, the researchers say, there may be a strong latent consumer demand for high labor standards, and companies that start to position themselves as leaders in ensuring decent wages and working conditions could capitalize on it.

Yum Brands Inc. and McDonald's USA are already taking this lesson to heart. In 2005, after a serious public relations campaign by the coalition, Yum Brands signed the groundbreaking penny-per-pound agreement. And, according to Julia Perkins of the coalition, over the last two harvest seasons the extra penny was paid through a third-party firm that provided workers the bonus checks along with their regular paychecks.

McDonald's was set to follow suit this season.

But a huge roadblock has been erected. The Florida Tomato Growers Exchange is warning its members not to participate in a deal that it says is illegal.

Reggie Brown, executive vice president of the exchange, refused to detail the specific legal objections, telling me to "pay for your own legal opinions." He also refused to point me to a particular statute, suggesting I look at the fields of labor and antitrust law.

When I asked if the exchange was threatening growers with huge fines for participating in the penny agreement, he said that the exchange is "a private business enterprise that is not subject to public scrutiny," and refused to answer.

According to Perkins, there are growers willing to help their workers secure this additional wage but the exchange is standing in the way.

Both Yum Brands and McDonald's say they are committed to their agreement with the coalition. It appears that for now, however, things are on hold until the coalition and these companies can figure out a way around the intransigence of the exchange.

This is how it often is in labor fights: Employers dig in so hard that even an extra penny - one that they're not even paying - is too much to ask. No wonder they can't find Americans to do this work.

In the meantime, the coalition is trying to convince Burger King Corp. to come aboard, and is planning a demonstration at its headquarters in Miami on Friday. Keva Silversmith, a Burger King representative, says that the "Florida growers have a right to run their business how they see fit."

I guess expending the $250,000 it would cost Burger King is simply too much for a company that is paying its CEO $2.35-million a year.

Okay consumers, sic 'em.