Hershey Leaves a Bitter Taste for Foreign Students

By Jerry Kammer, August 23, 2011

The Hershey Company, the iconic candy maker that cultivates an image of all- American goodness and corporate responsibility, has a public-relations problem involving its foreign workforce.

The corporation, which wants to be the world's sweet shop, is being labeled a sweatshop by students from foreign countries who are brought to the U.S. under a State Department program (the J-1 visa) billed as a "cultural exchange". (My colleague Jessica Vaughan has commented on the program here.)

For the past week, university students from such countries as China, Ghana, Moldova, Nigeria, Poland, Romania, Turkey, and Ukraine have been protesting that they are being overworked at the giant distribution center at the eastern edge of the town that was named for company founder Milton Hershey. It calls itself "the sweetest place on earth."

The students complain not only about the pace and strain of the work – which one described to me as never-ending "packing, wrapping, and stacking" boxes that weigh up to 40 pounds – but about the housing arranged for them by the non-profit company that has been designated by the State Department to sponsor them for three months of work and an additional month of travel in the United States.

In one careworn apartment complex about 15 miles from the plant, five students – three from Turkey and two from Ghana – are paying $2,000 to share a two-bedroom apartment. A complex in Hershey, whose website bills its three-bedroom apartments as starting at $970 per month, is charging $2,400 for six students who sleep two to a room.

The international students' story has made international news. The New York Times has published two stories and an editorial saying the students' plight "should shame us all." The International Herald Tribune has picked up at least a story from the Times.

"There is no cultural exchange, none, none," a 20-year-old Chinese student of international relations told the Times. "It is just work, work faster, work."

Many of the students work the 11 p.m. to 7 a.m. shift. The AP heard this complaint from a Ukrainian student: "All we can do is work and sleep."

The Hershey Co. is denying responsibility. It notes that it has contracted Ohio-based Exel, a logistics company, to run the plant. Exel passes the buck to SHS OnSite Solutions, the temp-worker agency that actually employs the students.

The SHS website offers this glimpse into its niche: "Our clients are under ever increasing pressure to improve performance, drive down their unit costs and increase their bottom line results."

As for the price of the housing, the Council on Educational Travel says the students knew ahead of time what they would be paying. It also says that the students who work the third shift were informed of that fact.

To employers, the CETUSA website touts the J-1 program as:

a great opportunity to not only fill your short-term and seasonal staffing needs, but also to bring diversity into your team. No matter if you own a little candy shop in Texas or run a huge processing plant in Alaska, international students are eager to gain work experience and support you and your business.

Employers pay nothing to be matched with students recruited by CETUSA and its partners around the world. Students, however, pay hefty fees to be part of the program, including fees for CETUSA's services, for the visa, and medical insurance. They also cover their air fare.

Here is a part of CETUSA's pitch to students:

You will gain valuable work and life experience, expand your resume, improve your English, have opportunity to travel in the U.S., make great memories and form lasting relationships. No matter where you end up in the U.S., your Work and Travel Program is sure to be a summer you will never forget!

The story of students in distress is doubly embarrassing for Hershey because the company often touts Milton Hershey's philanthropic support of needy students, especially at the school he and his wife founded in 1909. As the company noted last year in a press release:

Milton Hershey School is funded through the Hershey Trust Company, which is fueled by profits from The Hershey Company. Simply put, every time someone enjoys a Hershey's product, they are helping to foster opportunity….

While the news coverage has been energetic, it has been surprisingly lacking in perspective on the J-1 program. I have found none that has noted the recent comprehensive report on the J-1 program by Daniel Costa of the Economic Policy Institute. Here are excerpts from EPI's web page introducing the report:

The J visa Exchange Visitor Program gives U.S. employers significant financial incentives to hire foreign workers over U.S. workers, while providing them no labor protections…Furthermore, the State Department, which oversees the J visa program, collects very little data on the visa holders and relies on employers and organizations sponsoring J visa holders to regulate themselves. This outsourcing of the agency's oversight responsibility contributes to the severe exploitation of J visa holders, the largest group of guestworkers admitted annually in the United States. …

Employers have several significant financial incentives to employ J-1 visa holders rather than U.S. workers. The J visa has no prevailing wage requirement, which enables employers to pay J visa holders wages that are lower than those earned by U.S. workers in the same region and occupation…. Furthermore, employers are exempt from paying Social Security, Medicare, federal and state unemployment taxes on J-1 workers. And because J visa holders are required to pay for their own health insurance coverage during their stay in the U.S., employers can employ J visa holders without paying for their health care costs, another significant cost savings. Employers are also not required to advertise their open positions or recruit unemployed U.S. workers, even in areas in the United States suffering from high unemployment.

The State Department is reportedly investigating the situation in Hershey.