Even the Swedes are at it

Poor American employees are being shamefully exploited. By whom? Why, by European firms that cross t

To people interested in law and order, nothing symbolised the mutation of Britain into a giant public-private partnership better than the arrival of US prison corporations in the mid-1990s. The conventional nation state was defined by its monopoly of coercion. Citizens were charged in its courts and served time in its prisons. Then, from nowhere, penal corporations were all over the criminal justice system, making a nonsense of the old certainties about where the line should be drawn between public service and private profit. These were shocking and extraordinary companies, whose business plans echoed the logic of the slave trade by seeking to profit from human incarceration. None was more shocking than the Wackenhut Corporation of Coral Gables, Florida.

An anti-capitalist conspiracy theorist in a drug-induced dementia would be hard pressed to invent a more sinister firm. If its founder, George Wackenhut, had been further to the right, he would have had to wear a uniform. He opened for business in 1954 at the height of the McCarthyite anti-communist scare. His speciality was to collect information on subversives. By the 1990s, the then-octogenarian Wackenhut had files on four million "subversive" Americans. This was a huge number for such a conservative country. But then Wackenhut's definition of "subversive" was broad: he once described George Bush Sr as a "pinko".

As you might expect, from all of the above, Wackenhut lived in a mock-medieval castle on the Florida coast and surrounded himself with former FBI and CIA men and revanchist exiles from Castro's Cuba. Thus it was shocking in the 1990s to learn that this bizarre corporation was being invited by Her Majesty's Government to open a prison - in Doncaster, of all places. Justice in Britain was being handed over to Dr Strangelove.

There was no doubt that Wackenhut deserved all the attention it got, but the criticism also reinforced a simplistic world-view. On one side was right-wing America, fervently capitalist, restless and dangerous. On the other was social democratic Europe, peaceful, tolerant and always willing to temper the excesses of capitalism.

In 2002, supporters of the European way secured a rare business triumph. Wackenhut's security operations were taken over by the Anglo-Danish combine Group 4 Falck, the world's second-largest private security company. Group 4's professed aims were the antithesis of the paranoid ravings of old George Wackenhut. Its compassionate managers explained to the press, regulators and ethical investors that "at both national and international levels, Group 4 Falck works on the basis of a code of ethics governing such issues as human rights, racism and child labour". The firm was committed to "building social responsibility" by "collaboration with the employees [and] their unions". It set the gold standard for the security industry. "Low-quality, badly paid employees and an enormously high staff turnover rate were features of the US security industry as a whole prior to 11 September," Lars N0rby Johansen, the CEO said, as he shook his head at the lamentable irresponsibility of his competitors. The one "notable exception" to the shameful norm was Group 4's Wackenhut subsidiary.

There was some truth in Group 4's claims about its European workforce; none whatsoever in its claims about America. As Harold Meyerson of the Washington Post put it last year:

When European employers look to the United States, they see roughly the same thing that US employers see when they look to China: millions of low-wage workers who have all but lost the right to organise and a government intent on keeping things just the way they are. The erosion of worker power and the growth of employer supremacy here have transformed the bottom half of the US workforce into a vast exploitable mass worthy of a colonial backwater.

Group 4 is a leading exploiter and has become the target of a fightback by the American labour movement. Stephen Lerner of the Service Employees International Union (SEIU) has been touring Europe, trying to internationalise the dispute, and the story he tells should resonate with union leaders across the developed world. The problem they face is how to follow the working class from manufacturing into the service industries. For many working-class men, the security industry is the only alternative to the lost jobs in manufacturing - and don't the employers know it. Wackenhut built a prison in Doncaster because there was a reserve army of unemployed steelworkers and miners in Yorkshire with little option but to take jobs on pitiful terms. (The Home Office admitted in 2000 that private jails' competitive advantage over state prisons came from keeping wages lower, hours longer and holidays shorter.)

No one knows how many security guards there are, but Lerner's educated guess puts the figure at one million. It will surely rise. The fragmentation of developed societies guarantees there will be ever greater demands for guards to keep burglars out of gated villages, beggars out of shopping malls, terrorists out of airports and the public out of everything from private beaches to country club golf courses. Security is the industry of the privatised future.

Group 4 has been determined to stop its employees using their collective power to get a share of the pickings. It refuses to recognise unions and punishes workers who insist on being union members. On 9 October its managers showed how low they were prepared to sink. In the US, a country without a national health service, the great fear of the working and middle classes is loss of health insurance. Group 4 played on it by warning all employees that:

Union members or former members must complete a written statement indicating your wish to be removed from union status and request that union dues cease being deducted from your pay in order to complete this process. Employees that

are . . . union members are not entitled to Wackenhut insurance.

In other words, de-unionise or die.

If Denmark was the prime target of Islamic death cults, then Group 4's boasts about contributing to the war on terror would have substance. In Denmark, Group 4 Falck guards receive 111 hours of training and are rewarded with wages of between $16 and $19 an hour. In the US, the union found that three-quarters of the Wackenhut workers it questioned had received one hour's training in evacuation procedures and on how to detect suspicious packages and recognise suspicious people. Pay rates began at only $7.45 an hour. It's not that Group 4 is just doing what everyone else in America does. Other firms recognise unions and pay better. They complain that by undercutting them, Group 4 forces them to look at their terms and conditions. As always in unregulated markets, Gresham's law applies and the bad drives out the good.

Nor is Group 4's a lone example of ruthless European capitalism preying on the exploited Yanks. The American press has picked up on the case Ana Maria Araujo, a Peruvian immigrant and mother-of-three who worked for H&M, a cut-price Swedish fashion outfit, in New Jersey. After she had been knocked unconscious by a box that fell on her head and crippled by shunting heavy loads, her doctor said she must stop pushing herself to the limit. She and other workers with doctors' notes were called in by the management from lovely social democratic Sweden and told to go back to heavy lifting or leave. H&M is as anti-union as Group 4 Falck, and calls the police when organisers appear.

American unions have gone beyond grim resignation. SEIU leaders are relishing their fight with Group 4. The Pecksniffery of its managers is so extreme, so stonkingly unctuous, that the union is finding it's more than a duty to take them on, it's a pleasure.

In an anti-union world, there is still much that can be done. Lerner is a great supporter of getting pension funds that hold the money of union members to commit themselves to boycotting exploitative employers. Another target is the profits Group 4 makes back home. Group 4 has the contract to protect the European Parliament - along with the Nato headquarters and the European Court of Justice. Very well, reason the American trade unionists, let's lobby MEPs and European commissioners and hint that it might be an idea to look for another security company that isn't run by such obvious jerks.

I won't pretend that this is a self-evidently winning strategy. Behind it lies the hope that through the capricious workings of the media and the internet, the Group 4 story will take off; that Group 4's name will become synonymous with exploitation and phoniness; that its Danish and British executives will find themselves embarrassed and be forced to back down.

It is a gamble on very long odds. No one knows how the alchemy that turns a corporation from an everyday company into a global hate figure works. Why is McDonald's loathed, but not ICI? Coca-Cola, but not Boeing? Is it to do with the leftish middle class's subliminal aversion to proletarian food and drink - and, let's face it, proletarians? Or is it that food and drink matter more to people than chemicals and planes?

All that can be said is that the very rare moments when public attention turns on a corporation have the faint but real potential to be very good moments for its employees.