Wake-Up Wal-Mart Blog: A race to the bottom on sweatshop labor

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A race to the bottom on sweatshop labor

Walmart's treatment of workers, both in the United States, and abroad, is a major issue that needs serious attention and change. In the case of workers in the US, it seems that Walmart deliberately squeezes every dime out of their workers. Overseas, it seems like workers are mistreated more as a symptom of a destructive business model.

A new report from China Labor Watch reveals labor abuses in Walmart's Chinese factories, a failure of Walmart's auditing system, and, ultimately, how Walmart's demand for the cheapest goods leads other companies to follow in its footsteps, creating a race to the bottom. Here's how it works:

"Wal-Mart pricing is too low. As the world's largest retailer, Wal-Mart leverages its huge orders to convince factories to sell goods at low prices that are not sustainable. This puts pressure on other brands to pay less, thereby setting a dangerous industry precedent. In conversations with CLW, both factories and other brands frequently cite Wal-Mart's pricing structure as a major source of financial pressure."

Walmart likes to brag about how much money it saves people, even if they don't shop at Walmart. Their argument is that by having the lowest prices, other companies are forced to compete and lower their prices as well. The same properties are at work with sweatshop labor. Walmart is a trend setter in the industry because of its size. It is important to remember that Walmart's low prices come at a cost.

The ultimate message in China Labor Watch's report is that Walmart needs to focus on real change, and not on image, a message we've been preaching for years now. The real problem, says the report is that, "corporate codes of conduct and factory auditing alone are not enough to strengthen workers' rights if corporations are unwilling to pay the production costs associated with such codes."

You can read the full China Labor Watch report here (pdf).

Posted by Taylor - December 1, 2009 10:14 AM - High Costs

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