The Bentonville menace: Wal-Mart is changing the face of Latin America labor and life--and it ain't pretty.
Taking screw-the-workers capitalism to new depths, this modern-day robber baron has pushed its Latin American suppliers to cut costs to the bone or lose their contracts to China. They are even trying to force down labor costs in emerging Asia. It seems even $0.40 cents an hour--the estimated wage in China--is too high for the heartless executives at the front offices in Bentonville, Arkansas.
In some 40 lawsuits reportedly filed in the United States, the corporate behemoth--its annual sales is greater than the gross domestic product (GDP) of all but two Latin American economies--has been accused of using third-party contractors who hire illegal immigrants to work below minimum wage; of forcing employees to work overtime without pay; of busting up attempts to unionize; and of skimping on worker and retirement compensation. The company's official line is anti-union.
An internal audit at Wal-Mart three years ago--as reported in the The New York Times--showed extensive violations of child labor laws. Meanwhile, a federal judge in San Francisco is considering a sexual discrimination suit that could encompass as many as 1.6 million women, making it the largest civil rights class-action case in U.S. history.
If Wal-Mart stands accused of engaging in such shenanigans in the United States, imagine its corporate behavior in far-less-litigious Latin America.
"Many Latin Americans concerned about economic development see little benefit from the Wal-Mart model of maximizing profits by paying poverty wages," says Kent Wong, director of the Center for Labor Research and Education at the University of California at Los Angeles.
It was a Los Angeles Times expose published in November that noted how Wal-Mart's global network of 10,000 suppliers is under constant pressure to reduce costs. The article described the unhappy life of a Honduran woman named Isabel Reyes, who works for a textile company in San Pedro Sula that makes shirts and shorts for Wal-Mart. With quotas constantly rising, she now works 10 hours a day, sewing sleeves onto 1,200 shirts a day for about $35 a week. The 37-year-old seamstress can't hold her infant daughter without gulping anti-inflammatory pills.
To be sure, nobody is forcing Reyes to work there. "It's easy to compare a $35 a week salary with a U.S. salary," Wal-Mart spokesman Bill Wertz told me. "But I don't know what the alternatives are in that country."
He's right--to an extent. What choice does Reyes have in a nation where 53% of the population lives below the poverty line, and 28% of the work force is unemployed?
Latin American governments are grappling with weak economies and need all the jobs they can get. Wal-Mart offers lots of them. The retail chain is now Mexico's largest private employer, with 663 stores and 100,000 employees. The chain generates $11 billion a year there--more than the country's entire tourism sector, or about 2% of Mexico's GDP. Puerto Rico has 53 Wal-Mart stores with 11,600 workers. Brazil has 25 stores and 6,600 employees; Argentina 11 stores and 4,200 employees.
And customers all over the world love bargain prices. In 1995, I covered the opening of Wal-Mart's first store in Sao Paulo. I remember Brazilians rhapsodizing over the store's mantra of "everyday low prices." So many people lined up to get inside during the first week of business that the manager had to lock out some customers.
Still, it's time to hold this mega-corporation accountable. Latin American leaders must not he forced to cower to foreign investors who threaten to move elsewhere if they don't play by the rules of take-no-prisoners U.S. capitalism.
Free trade was supposed to create decent paying jobs that ultimately offer Latin American families a middle-class life style and turn them into consumers. Unfortunately, fairness has never been part of the free trade blueprint. Nor, in my view, is fairness uppermost in the mind of Wal-Mart's corporate masters.
Consumers should think twice about patronizing any business that perpetuates economic injustice. Everyday social justice is more important than low prices at any cost.
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