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By Root 1206 0

In September of 1994, GFI America, Inc. — a leading supplier of frozen hamburger patties to Dairy Queen, Cracker Barrel Old Country Store, and the federal school lunch program — needed workers for a plant in Minneapolis, Minnesota. It sent recruiters to Eagle Pass, Texas, near the Mexican border, promising steady work and housing. The recruiters hired thirty-nine people, rented a bus, drove the new workers from Texas to Minnesota, and then dropped them off across the street from People Serving People, a homeless shelter in downtown Minneapolis. Because the workers had no money, the shelter agreed to house them. GFI America offered to pay the facility $17 for each worker and to donate some free hamburgers, but the offer was declined. The company’s plan to use a homeless shelter as worker housing soon backfired. Most of the new recruits refused to stay at the shelter; they had been promised rental apartments and now felt tricked and misled. The story was soon picked up by the local media. Advocates for the homeless were especially angry about GFI America’s attempt to misuse the largest homeless shelter in Minneapolis. “Our job is not to provide subsidies to corporations that are importing low-cost labor,” said a county official.

The high turnover rate in meatpacking is driven by the low pay and the poor working conditions. Workers quit one meatpacking job and float from town to town in the High Plains, looking for something better. Moving constantly is hard on their personal lives and their families. Most of these new industrial migrants would gladly stay in one job and settle in one spot, if the wages and the working conditions were good. The nation’s meatpacking firms, on the other hand, have proven themselves to be far less committed to remaining in a particular community. They have successfully pitted one economically depressed region against another, using the threat of plant closures and the promise of future investment to obtain lucrative government subsidies. No longer locally owned, they feel no allegiance to any one place.

In January of 1987, Mike Harper told the newly elected governor of Nebraska, Kay Orr, that ConAgra wanted a number of tax breaks — or would move its headquarters out of Omaha. The company had been based in the state for almost seventy years, and Nebraska’s tax rates were among the lowest in the United States. Nevertheless, a small group of ConAgra executives soon gathered on a Saturday morning at Harper’s house, sat around his kitchen table, and came up with the basis for legislation that rewrote Nebraska’s tax code. The bills, drafted largely by ConAgra, sought to lower the state taxes paid not only by large corporations, but also by wealthy executives. Mike Harper personally stood to gain about $295,000 from the proposed 30 percent reduction in the maximum tax rate on personal income. He was an avid pilot, and the new legislation also provided tax deductions for ConAgra’s corporate jets. A number of state legislators called Harper’s demands “blackmail.” But the legislature granted the tax breaks, afraid that Nebraska might lose one of its largest private employers. Harper later described how easy it would have been for ConAgra to move elsewhere: “Some Friday night, we turn out the lights — click, click, click — back up the trucks and be gone by Monday morning.”

IBP also benefited enormously from the legislation. Its corporate headquarters was located in Dakota City, Nebraska. One study has suggested that after the revision of the state’s tax code every new job that ConAgra and IBP created there was backed by a taxpayer subsidy of between $13,000 and $23,000. Thanks to the 1987 legislation, IBP paid no corporate taxes in Nebraska for the next decade. Its executives paid state income taxes at a maximum rate of 7 percent. Despite all these financial benefits, IBP moved its headquarters out of Nebraska in 1997, relocating in South Dakota, a state with no corporate taxes — and no personal income tax. Robert L. Peterson, the chairman of IBP, said that moving to South Dakota was like giving his employees