Tesla is under fire Tuesday as news organizations jump on reports that the electric car company relied on cheap labor to build its paint shop in California.
According to reports, foreign workers were paid as low as $5 an hour to work in dangerous conditions. To be fair, they technically weren’t Tesla workers but were hired by subcontractor Eisenmann, a German-based manufacturer. The Guardian reported, Tesla relied on about 140 foreign workers, mostly from Eastern Europe to build the plant.
Happily, Elon Musk is jumping in to get to the bottom of the issue. This morning Musk tweeted a company response regarding the issue of using illegal workers with the company saying that it is going to start an investigation and “make sure the right things happen.”
It is nice of him to come in after the problem was brought to light in the media, but the question I have is: why did this benevolent CEO let this happen in the first place?
He certainly has enough cash to make things right after receiving nearly 400,000 pre-orders for Tesla’s new model 3 electric car valued at nearly $14 billion.
If he is so concerned that his employees be paid a fair wage why wouldn’t he take a more active role in the people who worked for him? Why not have a clause with his subcontractors forcing them to hire locally and pay market wages?
Instead, he kept out of the discussion and was blissfully ignorant while people were exploited right under his nose.
It’s not like these people are invisible. The guy who came forward, Gregor Lesnik, who has filed a lawsuit against the company that recruited him, suffered major injuries, breaking both of his legs after falling three stories from the roof.
It’s hard to believe that Musk didn’t know that something happened to one of his workers as his plant was being built. This should have been in an accident report, which should have passed Musk’s desk.
In its statement, the company said that it will “increase oversight to ensure that our workplace rules are followed even by sub-subcontractors.” What I get from that is that the company does have workplace policies but they don’t enforce them, which is worse because it demonstrates that they are willfully ignorant.
And this is ultimately the problem with the U.S. labor market; it thrives on illegal immigrants because they are cheap.
How many other companies are turning a blind eye to the people subcontracted to work in their factories, warehouses and construction sites? The answer is they don’t know and they don’t want to know.
Ultimately companies, especially publicly-traded companies, only care about the bottom line – or how much money they can make for their shareholders and investors…aka keep costs down.
According to some research, labor costs can make up 10% of costs in the manufacturing and construction sector. For some businesses, labor costs are one of the highest expenses. That’s why some companies try to cut corners…it’s Capitalism 101.
However, in the pursuit for lower costs, companies have created a labor market that exploits workers, many of whom are forced to take these positions because they are just trying to provide for their families in the “Land of Opportunity.”
Now, let’s relate this to the U.S. election, because illegal immigration has been a major topic among presidential candidates.
If presumptive Republican candidate Donald Trump really wanted to stop the illegal flow of immigrants into the U.S., instead of promoting his idiotic idea of building a wall, he should go after companies that hire these people. If companies couldn’t hire illegal immigrants then they would have no reason to come to America.
However, it is unlikely Trump will go after companies as he is one of the perpetrators. During the early part of the primary race, it was revealed that Trump used undocumented Polish workers to demolish an old building in Manhattan in the early 80s.
For the demolition, Trump’s subcontractor hired the 200 Polish immigrants, who worked 12-hour shifts, seven days a week for $4 or $5 an hour, with no overtime.
Interestingly, Trump tried to use the same excuse as Musk, saying that he didn’t know the workers were undocumented and it was the contractor who hired them. In court battles, he lost not once but twice and ended up settling the dispute for an undisclosed amount.
If illegal immigrants are criminals for sneaking into the country what does that make businesses that exploit them for cheap labor?
Maybe that is something we should think about when we head to the polls in November.
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