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LABOUR: Wal-Mart Model Misuses Women – Report

Jim Lobe

WASHINGTON, Feb 10 2004 (IPS) - Led by U.S.-based Wal-Mart, the world’s giant retailers are demanding more and faster production from suppliers, which in turn are bypassing the rights of their workers, most of them women, says a new report by development agency Oxfam.

Despite the retailers’ claims that they insist their contractors comply with basic labour standards, their demands for ever-quicker and cheaper goods are making compliance impossible in many cases, says the report, ‘Trading Away Our Rights’.

“This is where globalisation is failing in its potential to lift people out of poverty and support development,” said Phil Bloom, director of Oxfam’s ‘Make Trade Fair’ campaign.

“There is a widening gap between the rhetoric of global corporate social responsibility and the reality of the corporate business model.”

“Many corporations have codes of conduct to hold their suppliers accountable for labour standards, but their own ruthless buying strategies often make it impossible for these standards to be met,” he added.

The new report, which is based on hundreds of interviews of workers, factory and farm owners, officials from global brand-name companies, importers, exporters and union and government officials in 12 countries, comes amid growing efforts by multinational corporations to reassure consumers that workers who make their goods can earn a decent living.

But a spate of recent newspaper articles and studies suggest these efforts might be undermined by growing competitive pressures created by the demands of retailers and the ever-growing number of poor countries that have heeded advice and pressure from international financial institutions (IFIs) to open their economies to attract investment and jobs.

“Globalisation has hugely strengthened the negotiating hand of retailers and brand companies,” says the report. “New technologies, trade liberalisation and capital mobility have dramatically opened up the number of countries and producers from which they can source products, creating a growing number of producers vying for a place in their supply chains.”

Wal-Mart, the world’s biggest retailer, has led the field in putting this model into practice, it adds. The company now buys products from some 65,000 suppliers worldwide and sells to over 138 million consumers weekly through its 1,300 stores in 10 countries.

It has made China, where wages are far lower than anywhere else in Asia and where workers are denied the opportunity to form independent unions, the centre of production, a key point made in a feature article that appeared in the ‘Washington Post’ on Sunday.

“As capital scours the globe for cheaper and more malleable workers, and as poor countries seek multinational companies to provide jobs, lift production and open export markets,” the article said, “Wal-Mart and China have forged themselves into the ultimate joint venture, their symbiosis influencing the terms of labour and consumption the world over.”

But that marriage, according to both the Post account and the Oxfam report, has come largely at the expense of the worker on the factory line. “Wal-Mart pressures the factory to cut its price, and the factory responds with longer hours or lower pay,” a Chinese labour official who declined to be identified for fear of retaliation told the Post.

“And the workers have no options.”

That was also the message of a report released Monday by the New York-based National Labour Committee and China Labour Watch, about a toy factory in Ping Township in Guangdong province that produces goods for Wal-Mart.

The two groups reported that the mostly female labour force at the plant were paid only about one-half the legal minimum wage and forced to work longer hours than the legal maximum. It also reported that fire exits at the plant were normally locked.

Wal-Mart responded by insisting that it conducts regular inspections of all of its plants in China, but the groups said that plant managers were always informed of the visits in advance and coached workers on what to tell inspectors.

The report is largely consistent with the findings of the Oxfam study, which put the main responsibility for the worsening situation on corporate buying teams that pressure suppliers to deliver “just-in-time” orders at ever-lower prices in hopes of squeezing maximum profit from goods once they are sold to shoppers in mainly wealthy countries.

“Today’s business ethos is ‘make it quick, make it flexible, make it cheap’,” said Bloomer. “Anyone appalled by labour conditions in the world today should be asking, ‘so who turned up the heat’?”

“The workers at the bottom of the global supply chains are helping to fuel national export growth and shareholders’ returns, but their jobs are being made ever more insecure, unhealthy and exhausting, and their rights weakened.”

To minimise resistance, contractors are employing workers who are less likely to try to join trade unions in those countries where they exist. For the most part, these are young women, often migrants or immigrants, who are easily intimidated if they do not cooperate with management.

“Jobs in labour-intensive industries are celebrated as empowering women,” according to Bloomer.

“While we welcome the fact that millions of women are getting a wage, the wage alone doesn’t free them from poverty. Instead, they’re being burnt out by working harder, faster, over longer hours and with few health, maternity or union rights.”

“It’s a poor strategy for improving women’s lives,” he added, noting that IFIs like the World Bank and the International Monetary Fund (IMF) were complicit in the worsening situation by encouraging governments to make their labour markets ever more “flexible.”

In Chile, for example, 75 percent of women in the agricultural sector are hired on temporary contracts to pick fruit, and work more than 60 hours a week during the harvest season, but one-third of them still make below minimum wage.

Fewer than one-half of the women in Bangladesh garment factories have a contract, and the majority receive no maternity or health benefits. Some 80 percent fear dismissal if they complain.

In China’s Guangdong province, young women face 150 hours of overtime each month in the garment factories, but only 40 percent have a written contract and 90 percent have no access to social insurance.

Given these kinds of situations, governments must step in to guarantee workers basic labour rights, including the right to join trade unions and bargain collectively, says the report.

At the same time, a greater effort must be made to enforce labour laws, while consumers must insist that retailers do a far better job of monitoring working conditions to ensure that the jobs they create in poor countries are not exploitative, it adds.

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