Wal-Mart’s False Plays at Ignorance

Date: 13 Jan 2004 | posted in: Retail | 0 Facebooktwitterredditmail

Originally published in Progressive Trail

In the Wal-Mart economy, where an inexhaustible supply of cheap consumer goods has become more important than family wages for American workers, it should come as little surprise that a company which is known for its ability to track the sale of products down to the penny across a far-flung empire, would plead ignorance when accused of violating labor laws.

After courts in California and Minnesota granted class-action status to two separate lawsuits alleging that the company routinely forced its employees to work extra hours without pay, Wal-Mart spokesperson Sarah Clark said “We have no reason to believe that these isolated situations. . . represent a widespread problem with off-the-clock work”.

There is in fact every reason to believe that this is a widespread practice. Wal-Mart is facing similar lawsuits involving unpaid work in more than 30 states. It has already been convicted in Oregon and reached settlements in Colorado and New Mexico.

Wal-Mart’s response to the unpaid work cases is typical of how the company handles allegations that it has violated labor laws and exploited workers. Wal-Mart invariably maintains that these are anomalous incidents involving a few bad-apple store managers or subcontractors over which corporate headquarters had no knowledge or control.

“No, we did not know [about illegal workers],” claimed Wal-Mart spokesperson Mona Williams after federal agents raided 60 stores in 21 states and found scores of illegal workers on night-time cleaning crews. Wal-Mart contends it had no idea the workers were undocumented and blames subcontractors.

In response to a lawsuit alleging that Wal-Mart denies women promotions and equal pay, company spokesperson Mona Williams said, “No one should confuse isolated complaints from a small group of women with the facts.” The small group in question includes 110 women who worked at 184 different Wal-Mart stores.

With regard to overseas sweatshops and child labor, the company claims, “Wal-Mart strives to do business only with factories run legally and ethically,” but says it cannot be expected to know what goes on in each of the hundreds of factories that produce goods for its shelves.

These claims of ignorance are hard to swallow from a corporation renowned for top-down, precision control over every detail of its operations. Nothing conveys this more than the fact that not one of Wal-Mart’s 2,886 U.S. stores has light switches. There’s no need for them. The lights, the thermostat, the air conditioner, the background music—all are controlled from Bentonville, Arkansas.

Wal-Mart can tell you how many tubes of toothpaste were sold yesterday afternoon at Store No. 1,851. It can tell you which stores sell more flags for July 4th and whether residents of Iowa drink more milk than those in Maine. Every item and every sale at every Wal-Mart is carefully tracked.

So is every penny that the company spends on labor. When it comes to keeping these costs down, Wal-Mart is like a mob boss ordering a hit. The words might not be said, but everyone knows what is expected.

Cleaning companies are told Wal-Mart will pay $10 per hour per worker. Wal-Mart executives undoubtedly realize that this only works if you eliminate social security and workers compensation by paying immigrants under the table.

Wal-Mart tells store managers they face dismissal if payroll costs rise above a certain threshold, knowing that the only way to run a store on such a meager budget is to squeeze free hours from employees.

Suppliers too are told how much Wal-Mart will pay for products. The retailer sets rates so low the only way to succeed is to exploit
workers in countries with poor labor laws or lax enforcement.

At the highest levels, Wal-Mart knows exactly the degree of human suffering required for “always low prices” and $8 billion in annual profits.

It’s high time we held them accountable. Cities and states should stop giving Wal-Mart multi-million dollar tax breaks when it builds new stores. We should step up enforcement of laws that protect workers’ right to organize unions, as well as those that protect small businesses from predatory pricing.

Cities should revise their planning policies to impose strict economic impact requirements on large retailers or ban them altogether, as dozens of communities nationwide have already done. We should reinvest in our downtowns and support local businesses that pay a living wage.

Such policies would nurture a healthier society and higher paying jobs—better bargains than any found at Wal-Mart.

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Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance and directs its Independent Business Initiative, which produces research and designs policy to counter concentrated corporate power and strengthen local economies.