Labor union levels accusations against Palermo's for use of public subsidies

MILWAUKEE -- A labor group used Milwaukee's City Hall to level its latest accusations against Palermo's. Supporters of the Palermo's Workers' Union held a press conference Tuesday, October 16th to express doubts about the company's use of public subsidies. Meanwhile, Palermo's says the facts speak for themselves.

The AFL-CIO’s Center for Strategic Research authored a report entitled "Too Much Pork in the Pepperoni Pizza? Tax Credits for Palermo's Highlight the Need for Transparency, Accountability at the Wisconsin Economic Development Corporation (WEDC)" -- detailing the $26 million dollars in public subsidies that Palermo Villa Inc. has received from city, state and federal sources for economic development and job creation.  

In return for substantial public assistance, the Milwaukee-based frozen pizza manufacturer made specific commitments about job creation and economic development.  However, the new report indicates there are now significant questions about whether Palermo's has met the commitments it made.

Julie Farb Blain, a senior researcher with the AFL-CIO says WEDC gave her group a highly redacted document on Palermo's -- failing to answer questions of the inquiry for the striking workers.

"What there's no access to publicly is whether Palermo's has claimed tax credit for what types of jobs, at what wage level they've requested these credits, and whether these jobs are being maintained at the wage level they're supposed to be for the right amount of time," Blain said.

A Palermo's representative says the striking workers are no longer employees, because the federal government has deemed them ineligible to work in the United States.

Palermo's workers have been on strike for about four months -- protesting what they say are union-busting tactics by the company. They're calling on the frozen pizza manufacturer to back away from its threat to terminate employees.

"Last Friday, WEDC released documents that indicated we had fulfilled our commitment a year ahead of schedule," Palermo's Director of Marketing Chris Dresslhuys said.

Blain says for the millions Palermo's received in tax credits, loans and other subsidies, it is supposed to create family sustaining jobs that last at least 60 months and pay a minimum of $10.88 an hour.

Dresselhuys says the average production starting salary is $12.90.

"Since opening the Menomonee Valley facility in 2006, Palermo's has created over 208 jobs and paid its employees over $130 million in wages and benefits," Dresselhuys said.

While Dresselhuys said the striking workers were let go because they were ineligible to work in the U.S., a representative for the former workers said inquiry into their immigration status was postponed and never established because of the labor dispute with the company.