Welcome to the 80th installment of The Wal-Mart Weekly, a column dedicated to bringing you insight, wit, facts, results, opinions, and just a bit of everything else when it comes to a very hot topic these days: Wal-Mart.
This week, Wal-Mart Stores Inc. (NYSE: WMT) is under fire for alleged major human rights violations in some of its Bangladesh factories. Although global manufacturers have often come under fire for slave labor conditions in PacRim-area factories, could this really apply to a retailer? After all, a retailer is a distributor, not a manufacturer.
In most cases, this is true -- but not when it comes to Wal-Mart. According to a SweatFree Communities report, Wal-Mart workers in Bangladesh were made to work 19-hour days while being paid $20/month. Sounds like a raw deal, so let's take a look.
Sweatshop manufacturing is nothing new
In the quest for the almighty dollar, many large companies have made the decision to work with contract manufacturers who bid so low for projects that they are forced to barely pay employees while working them on an inhumane schedule. Think your 60-hour work week is a toughie? Try manufacturing widgets in some Chinese factories six days a week.
SweatFree Communities, an activist organization, accuses the world's largest retailer of buying school uniforms that were made under extreme sweatshop conditions in Bangladesh. There is a distinction, here: Wal-Mart itself did not make the uniforms under these conditions; one of its suppliers did. SweatFree is a five-year-old organization that works to get agreements from employers to not buy or use products that have been produced by violating the human rights of employees. No matter how you cut it, working 19-hour days, being kicked and beaten for showing up late to work and making below a national minimum wage is a human rights violation.
These results were gleaned from talking to 90 employees outside of work by SweatFree representatives. Wal-Mart received a draft of the SweatFree report in August, and released a statement to BusinessWeek a few weeks ago that stated: "Consistent with our concern for the workers and their working conditions, we took immediate action when we received the SweatFree draft report. We visited the factory unannounced and then met with the principal factory owner and our suppliers to ascertain conditions. Additionally, we proposed using an independent third party to work with factory management over the next twelve months to monitor factory operations."
Do you believe them? Wal-Mart admitted that it requested - several times - that SweatFree not release its findings, instead seeking to partner with the watchdog group to uncover labor industry abuses in Bangladesh. Wal-Mart reported that at least five other brands and/or retailers use the same factory for apparel production and that it was not alone in partnering with the facility in question. This brings us to the point of this column: do retailers and brand companies have any code of ethics publicly available that specifically references the use of sweatshop conditions with its own factories or those of manufacturing or marketing partners? Doubtful. If you find any, please list them in a comment below and tell me where you found it.
Why SweatFree singled out Wal-Mart
Wal-Mart was targeted by the labor watchdog group due to the belief that it was indeed the factory's largest customer, estimating that about 15% of the annual $11 billion of Bangladeshi garment orders went to Wal-Mart. SweatFree Communities' Executive Director Bjorn Claeson told BusinesWeek that "Wal-Mart has incredible economic muscle in that country ... if it takes the leadership position as a retailer and works with other brands, there is no question that it can really have an impact."
In typical watchdog fashion, SweatFree did not hold back the report. Censoring any results - regardless of who or what is affected - would be against everything a legitimate watchdog organization stands for. Of course, Wal-Mart reacted to the report that was released, agreeing to "partner" with SweatFree to find out just what was wrong with labor conditions at supplier factories where it has billions of dollars in apparel made annually.
Here is the problem, and one that global companies constantly fail at: labor conditions and supplier contracts are most likely left very vague. With such vagueness, retailers and manufacturers both can cut costs to the bone and gain more business. Thus, consumers see lower prices, the retailer sees more orders, the manufacturer sees larger shipments and the employees at the end of the food chain see rampant abuses. The entire burden falls upon them. What do you know: labor practices are conducted with nightmarish precision to eek out every single penny possible to keep the twisted commerce chain in place.
Sheepish customers
One thing I have constantly noticed with many middle-class American consumers is that they want so much for so little. The word "Free" in any area of marketing is met with sheep-like, numbing response. The cheaper the price, the more "value" many consumers see in the material items they purchase. The entire chain of raw materials to manufacturing to labor to shipping to distribution to shelf stocking does not occur to the bargain basement shopper. Would you rather pay $34.97 for a sweater that has been produced with organic cotton and "with pride" by employees here in the U.S. or pay $17.97 for a decent quality, sweatshop-made garment that is about as generic and cheap as possible? You can probably guess what the majority of American shoppers would choose.
Stay tuned right here next week for another edition of The Wal-Mart Weekly. Until then, have a safe week.











Reader Comments (Page 1 of 5)
10-13-2008 @ 4:11PM
Betty Peck said...
Sam Walton would be turning over in his grave. I remember when there used to be signs bragging about things "made in America."
I have joined Costco, which is suppose to have agreements for human rights working conditions with their suppliers. I also read recently that they do spot checks for pesticides on their foods to make sure companies are in compliance.
I also like their mission statement that they want to treat their customers, employees and share holders fairly.
Also, I would be interested in how Target compares to Walmart in their policies. I hope better, because that is who I prefer to shop with instead of Walmart.
10-13-2008 @ 9:01PM
Dan said...
You hit the nail on the head. American shoppers have spoken. I would love every item I buy to be made in America but the genie is out of the bottle. And its not just Walmart to blame for that.
10-14-2008 @ 11:49AM
roudy said...
The mentality represented in #1's comment is not the real world thinking of middle to low income America. We have to make every penny count and if that means shopping WMT then so be it.
RoudMan
10-14-2008 @ 2:20PM
JD said...
Why don't they ask the real question to the American consumer? Like would you prefer having lower prices for the things you think you need while offering people in 3rd world countries some type of income to support their families? Or pay the higher prices that Union Labor workers would create in this country? Get rid of the Labor Unions and the jobs will come back and the prices will remain lower.
10-14-2008 @ 2:25PM
SecretAgent said...
You can't really place any blame on Wal-Mart. Who in their right mind would agree to work 19 hour days for 20 bucks a month? The fault lies with the employees. As for Target's policies, on the outside they seem very well meaning. On the inside .. that's a different story.
10-14-2008 @ 2:30PM
James Babb said...
PLEASE, do the MATH!! Your example of the 34.97 vs the 17.97 sweater is inaccurate. A better comparison is 18.97 vs 17.97. 95% of the cost is just mark up.
10-14-2008 @ 2:38PM
Lilith said...
Force the imports to prove that they are "Fair trade" and see how long the public pays those prices. I thrift shop, garage sale, flea market, and second hand wherever possible.
I'm reusing, and the money usually goes to good causes. Esp. When I shop at two of my favorite boutiques Sally's (Salvation Army) and Willy's (Good Will)
10-14-2008 @ 2:44PM
Bug said...
Oh c'mon now...you can't pretend this is a surprise. Why do you think they moved to China? And they justifiy it by encourageing other industries to do the same by not putting their products on Wal-Mart/Sam's shelves unless they do.
BOYCOT WAL-MART NOW
10-14-2008 @ 2:54PM
Larry said...
Only the people can change the american retailer about who they buy from. as long as we reserve the something for nothing attitude it will continue. Stop buying items made in foreign countries and someone in america will start manufacturing it here. WAKE UP AMERICA BEFORE THEY tAKE US OVER.
10-14-2008 @ 2:56PM
Barbara said...
I would like to believe that most shoppers at Walmart do not know the details and implications behind their "bargains".. I do so therefore never shop at Sam's Walmart or BJ's. When I bring up these issues with other middle class Americans who love Walmart- they have no idea what I am talking about . More articles like this need to published and more news shows about the problems .
10-14-2008 @ 3:00PM
Greg said...
A lot of interesting comments. A note on the article: "Middle" class Americans do buy as cheaply as possible, but not because they want "so much for so little". It's mostly because the gap between the rich and poor has grown to such an extent, the now "former" middle class has so little, but still has wants and needs. As to the notion of getting rid of Unions, and no, I'm not a Union member, yes, the jobs would come back, at 20 bucks a month for 19 hour days.
10-14-2008 @ 3:14PM
alan king said...
Surprise surprise !!!!!!!!!!!
How do you think China-Mart has such cheap prices and is the only top company which is still in the plus this year!
10-14-2008 @ 3:16PM
Vashti Murray said...
It's okay to be self-righteous in the land of plenty but the fact of the matter is that despite what you consider to be poor conditions, if many in poor countries did not have that, they would have nothing. Have you ever seen up close a belly swollen from starvation. I am not condoning it, but it's your voracious appetite for cheap goods that fulels this; and $9 at Taco Bell doesn't stretch far. Walk in another's shoes to know what it feels like before you judge.
10-14-2008 @ 3:17PM
Mudd said...
Wall-Mart and China are in a direct verture togeather, China the manufacturing Wall-Mart in distrabution. If there was ever a conpany that is as far away from the american ideal Wal-mart is it. There level of involvment with a communist, represive society borders on crimminal. Their whole ecomomy is baced on slave labor and any one that shopes there is supporting a fachist regiem. So as a consumer doint you have a responsability not to buy from a NAZI regardless of how cheap it is. Besides any thing that comes from China is toxic so if you feel you have to shop there,, you get what you pay for, Morons
10-14-2008 @ 3:18PM
Larry said...
Greed is what brought the union and greed is what moved the jobs out of America. Greed from the america workers and greed from american business. Greed is what people thrive on and most everyone is eat up with it. Greed is what drives our Government not only for money but for power and control. People want to remove God from America then they can do as they please. The only laws we really have are directly from the Bible. You cannot legislate Love for one another and help those who are less fortunate and care for the needy. It must come from devine power on high in order to be real. Then we would be concerned if our neighbor had enough to eat and a warm dry place to live. People need to return to The LIVING GOD and entroduce him to one another. Then the WHOLE WORLD change.
10-14-2008 @ 3:19PM
wdeputy said...
This is supported by the unions and is not true, bust up and do away with unions and companys would stay in the usa and more jobs would be here things would be cheaper and autos would drop in price. the unions have disgraced this country and is part cause of the economic troubles in this country.
10-14-2008 @ 3:23PM
bumpy723 said...
I try my best not to shop at Walmart because I despise everything that company stands for. Not only that, but the lowest of the low love to shop there.
However, as a "single parent" raising my siblings with no help from anyone else, times are tough and sometimes I have no choice but to shop there. When I become upper class instead of lower middle class, then maybe I'll be lucky enough to shop in better establishments.
10-14-2008 @ 3:25PM
Tiana said...
Greg..your comments were right on!! with out unions, we would indeed be working 19 hour days and making 20 bucks a month, while our greedy ceo's make their millions....GREED is destroying this country!!!
10-14-2008 @ 3:26PM
Phillip Logan said...
There's a lot of the regular stuff posted about evil unions and "genie is out of the bottle (globalization)," etc. Those folks are mistaken. We made a lot more products in America, with the highest quality in the world, in the years when unions were a lot stronger than they are today and the genie can be put back in the bottle by simply stopping Americans being raped by unfair trade agreements. For example, EVERY country except the U.S. who agreed to drop tariffs immediately replaced them with a "border entry tax" or a "value added tax" or used some other cute name to maintain their tariffs on our products. There are lots of other dirty trade tricks used against us but that one example gives the idea.
As for Wal-Mart, they shouldn't be singled out, there's plenty of blame to go around. For example, if the price of lettuce was raised a dime a head Americans could be hired at a decent wage with benifits to harvest that product. What American wouldn't support that? But Wal-Mart is responsible for their hiring criminal aliens and other acts so they get their share of blame.
Better, America First, trade laws; outright boycotting bad foreign products like ones that have been sold to us with poison in them; ALWAYS buying American made when we have a choice because that is enlightened self-interest; and saving ten percent of our income are several nearly painless ways we can start with to put America's house in order.
10-14-2008 @ 3:28PM
tom said...
WAL MART IS A DISHONEST COMPANY MANAGED BY GREEDY DISHONEST PEOPLE. LET THEM EXPAND INTO BANGLADESH AND SELL THAT CRAP BACK TO ITS POPULATION. IT ISN'T A STORE BUT A BIG BOX TRASH BIN