Tyson Foods (TSN: NYE), a major player in the food processing industry, is currently under scrutiny by the U.S. Department of Labor. The investigation revolves around allegations of child labor in Tyson’s meat-processing plants. This inquiry was prompted by a recent report in the New York Times Magazine. News revealed disturbing claims of migrant children, some as young as 14, working late at night for cleaning duties, resulting in serious injuries. This article provides an in-depth look at the investigation, its potential impact on Tyson stock, and the broader issue of child labor in the United States.
Child Labor Inquiry at Tyson:
The New York Times Magazine’s investigative report shed light on unsettling incidents where minors were tasked with cleaning responsibilities within Tyson and Perdue facilities. Federal law clearly prohibits this practice due to the hazardous nature of the work involved. The U.S. Department of Labor swiftly launched an inquiry, focusing on the plants operated by these food giants in Virginia.
Tyson Foods and Perdue Farms, while denying any prior knowledge of child labor in their plants, have pledged their full cooperation with the ongoing investigation. Both companies have stated that they typically hire sanitation contractors to manage cleaning operations at several of their facilities. The Department of Labor can hold Tyson and Perdue accountable for contractor labor practices through joint employment.
Rising Concerns Over Child Labor:
The investigation into Tyson Foods and Perdue Farms underscores a broader concern – the escalating issue of child labor in the United States. Several well-known companies have recently faced scrutiny for their involvement in these unlawful practices.
In a late 2022 shocker, Packers Sanitation Services, a food safety sanitation provider, employed 31 children aged 13 to 17. They worked for major meat industry players like Cargill and JBS USA in Minnesota and Nebraska. Disturbingly, many of these young workers suffered chemical burns and other injuries.
The Department of Labor’s Wage and Hour Division reports a shocking 44% rise in child labor violations from October 1, 2022, to July 20, 2023. This surge results from stricter enforcement of child labor laws, emphasizing the need for companies to ensure compliance and oversight.
Impact on TSN Stock:
Investors and market analysts are closely monitoring the developments surrounding Tyson Foods (TSN) in light of these allegations. Tyson has been investing significantly to expand its production capacity and modernize facilities by incorporating automation processes, which has garnered some positive attention. However, the ongoing inflationary pressures in the economy have cast a shadow over the stock.
Tyson Stock Forecast:
Based on the TSN stock forecast, the average target price stands at USD 54.75. It’s essential to note that the average analyst rating is “Under-perform.” Stock Target Advisor’s analysis also leans “Slightly Bearish,” considering 6 positive signals and 10 negative signals.
Tyson Stock’s Recent Performance:
As of the latest closing, the stock was priced at USD 51.12. This price has changed by -6.27% over the past week, -5.65% over the past month, and -26.91% over the last year.
Conclusion:
The child labor investigation surrounding Tyson Foods and Perdue Farms has brought to light serious concerns about labor practices within the food processing industry. While these allegations raise ethical and legal questions, they have also left investors cautious about Tyson’s stock performance, especially in the face of inflationary pressures.
