Assignment 3.2: Wal-Mart — Sweatshop or Scapegoat?
In 1991, Walmart became an international company when they opened a Sam's Club near Mexico City. Just two years later, Walmart International was created. Today, Walmart International is a fast-growing part of Walmart's overall operations, with 4,112 stores and more than 680,000 associates in 14 countries outside the continental U.S.
Sweatshops are workplaces where basic worker rights are not respected. In the US, sweatshops at the turn of the 20th century were plentiful and trade unions worked to organize workers and enact important legislation including minimum wages, child labor laws, and health and safety regulations. In the 1990s when the focus was on factories labeled as sweatshops in the developing world the conditions, mirroring the US turn-of-the-century conditions of exploitation continued to flourish. The largest retailer in the world, Wal-Mart, has been cited using sweatshops; one of the most inhumane forms of labor. Because of Wal-Mart's sheer size, it has been a central focus for International Labour Rights Forum’s (ILRF) work since 2004. The company has grown to become the world's largest retailer and corporation, with over 60,000 suppliers, yet it has not developed a policy of social responsibility to match its economic power. Instead, it has released vague and misleading reports on its labor conditions, while its constant price pressure has continued to force suppliers to disobey local regulations.
According to NY based Human Rights Watch (HRW) most of the European multinational corporations fail to live up to the standards of the international labor laws within the US. The report clearly mentions the double standards at the corporate level. The same companies which are out of compliance in US in terms of fair labor practices are for most part in compliance within their domestic territory and treat their domestic workers better. Wal-Mart has a long history of high-profile labor rights violations, starting with the Kathie Lee Gifford exposé. ILRF has learned from trade unions and allied labor NGOs in countries like China, Bangladesh, and Swaziland that they have seen major labor rights violations in Wal-Mart factories. Though Wal-Mart now releases a yearly "ethical sourcing" evaluation, it refuses to specify how it measures improvements and downplays persistent problems like work hours. Its labor inspections are still overwhelmingly pre-announced and, partially as a result, ineffective. Wal-Mart became the world's largest retailer by buying cheap, foreign-made goods and selling them to consumers at rock-bottom prices every day. In late 2005, the ILRF on behalf of factory workers from Indonesia, China, Bangladesh, Nicaragua, and Swaziland filed a lawsuit against Wal-Mart Stores charging that Wal-Mart knowingly and systematically violated its Standards for Suppliers. On July 10, 2009, this lawsuit was dismissed by the 9th Circuit court in California.
In February 2009, the Clean Clothes Campaign launched the Better Bargain campaign targeted at reforming the purchasing policies of Walmart, Carrefour, Tesco, Lidl, and Aldi. The violations at Walmart factories are symptoms of a larger problem caused by unsustainable buying practices.
ILRF identified the following labor violations at Wal-Mart factories: 1.
In violation of the law, workers are routinely forced to work overtime, often 16-18 hours a day. 2.
Minimum Wage Violations
Many workers are paid up to 30 percent below their country's legal minimum wage. 3.
Maternity Leave Violations
Most female workers are denied their legal maternity leave and their benefits. 4.
Overtime Pay Violations
Workers are rarely, if ever, paid overtime. Although they often work more than twice the legal number of hours in a week, they are not paid more than their regular wages. 5.
Health Care Violations
The health clinics that many countries require their factories to have often do not exist and...
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