the audit

Audit Notes: Welcome to America, Supercookies, Leon Black’s Blowout

August 19, 2011

It’s a national embarrassment when students from places like China, Nigeria, Romania and Ukraine come to the United States for a summer job and end up striking to protest their labor conditions.

That’s what some 400 foreign students here to pack Hershey’s chocolates did this week in Pennsylvania. They say were forced to live in company housing twice as expensive as prevailing rents, worked to the bone, and paid $40 to $140 a week after taxes, rent, and fees.

Welcome to America, folks. We’ve got outsourcing (Hershey’s doesn’t run the plant), low wages ($8.35 an hour—enviably high for millions of workers here), anti-labor policies (management threats against organizing), and exploited foreign workers, all wrapped up in one story.

It’s worth noting that this isn’t a one-off thing.

Here’s the lede of an Associated Press investigation from December:

Lured by unsupervised, third-party brokers with promises of steady jobs and a chance to sightsee, some foreign college students on summer work programs in the U.S. get a far different taste of life in America.

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An Associated Press investigation found students forced to work in strip clubs instead of restaurants. Others take home $1 an hour or even less. Some live in apartments so crowded that they sleep in shifts because there aren’t enough beds. Others have to eat on floors.

They are among more than 100,000 college students who come to the U.S. each year on popular J-1 visas, which supply resorts with cheap seasonal labor as part of a program aimed at fostering cultural understanding.

The Wall Street Journal continues its excellent series on how Web companies aggressively violate our privacy.

Julia Angwin reports on supercookies, which pass advertisers and websites user information even if they’ve tried to protect their privacy and are “almost impossible for computer users to detect.”

The new techniques, which are legal, reach beyond the traditional “cookie,” a small file that websites routinely install on users’ computers to help track their activities online. Hulu and MSN were installing files known as “supercookies,” which are capable of re-creating users’ profiles after people deleted regular cookies, according to researchers at Stanford University and University of California at Berkeley.

The busted companies say “oopsie”:

Many of the companies found to be using the new techniques say the tracking was inadvertent and they stopped it after being contacted by the researchers.

But the Journal is good to note this immediately afer the excuses:

The spread of advanced tracking techniques shows how quickly data-tracking companies are adapting their techniques. When The Wall Street Journal examined tracking tools on major websites last year, most of these more aggressive techniques were not in wide use.

But as consumers become savvier about protecting their privacy online, the new techniques appear to be gaining ground.

— Peter Lattman has a sweet report in The New York Times on private-equity kingpin Leon Black’s 60th birthday bash. At least Stephen Schwarzman’s over-the-top 60th bash came at the tail-end of the bubble. Black’s gala shows (as if we didn’t know it) that the second Gilded Age never ended:

While much of the nation’s economy has struggled to recover from the financial crisis, Mr. Black’s firm — and the rest of the private equity industry — has snapped back. Though their deals are a far cry from the record takeovers struck in the last decade, multibillion-dollar buyouts have returned as banks extend corporate loans again. And pension funds and global sovereign wealth funds, faced with poor performance in stocks and bonds, continue to commit billions to private equity in the hopes of juicing their returns.

Nice detail here:

After a buffet dinner featuring a seared foie gras station, some 200 guests took in a show by Elton John. The pop music legend, who closed with “Crocodile Rock,” was paid at least $1 million for the hour-and-a-half performance…

Mr. Black had his backyard transformed into a faux nightclub setting, constructing a wooden deck over his swimming pool and building a tent for Mr. John’s concert. After a buffet of crab cakes and steak, partygoers sat on couches with big puffy pillows.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.