Daily Blog

Wal-Mart's Labor Violations

Yesterday, Human Rights Watch published a pretty damning report on the big bad folks at The Beast--aka Wal-Mart. Not surprisingly, the Bentonville Bullies come off as, well, not just bullies but lawbreakers...

“Wal-Mart workers have virtually no chance to organize because they’re up against unfair US labor laws and a giant company that will do just about anything to keep unions out,” said Carol Pier, senior researcher on labor rights and trade for Human Rights Watch. “That one-two punch devastates workers’ right to form and join unions.”

As the world’s largest company, Wal-Mart’s conduct is especially troubling. Wal-Mart had $351.14 billion in revenue and $11.3 billion in profits in the fiscal year ending January 2007. It is the largest private US employer, with more than 1.3 million US workers and close to 4,000 stores nationwide. None of those workers is represented by a union. Human Rights Watch found that this is no accident.

Human Rights Watch’s investigation revealed that, in most cases, Wal-Mart begins to indoctrinate workers and managers to oppose unions from the moment they are hired. Managers receive explicit instructions on keeping out unions, many of which are found in the company’s “Manager’s Toolbox,” a self-described guide to managers on “how to remain union free in the event union organizers choose your facility as their next target.”

     You can read the rest of the report here

The Beast's Diversity Problem

    Count me as one person not shedding too many tears about the death of Helen Walton, the matriarch of the Walton family--she of the $16 billion net worth. After all, this family, worth tens of billions of dollars, has made live a living hell for thousands of workers. And just in time to mourn dear Helen, we learn that the company's own statistics show what a truly discriminatory workplace it runs. The following comes from WakeUpWalmart.com:

  Today, Wal-Mart, the nation's largest private employer, released new diversity data which shows - once again- how far this company must go before it becomes a responsible employer. Even though 60.87 percent of  Wal-Mart*s Associates were women in 2006, only 39.69 percent of  Wal-Mart's managers were women, up only 0.89% over last year. At this rate of change, it will take Wal-Mart another 11.9 years for women to make up at least 50 percent of the managers in the company.

Amongst minority workers, the percentage of workers in management compared to the total workforce is equally poor. For example, even though minority workers at Wal-Mart comprised 33.15 percent of Wal-Mart's total work force, minorities comprised only 23.2 percent of its management. More specifically, even though African Americans comprise 17.50 percent of Wal-Mart*s workforce, African Americans represent only 11.39 percent of Wal-Mart*s management.

Again, based on Wal-Mart's own EEOC data, and in terms of Wal-Mart's management ranks, the percentages of women, African Americans, and Hispanics in Wal-Mart's management are far below the percentage of women, African Americans, and Hispanics in their total workforce.

    Amazing how oblivious rich people can be.

Norwegians Dump Wal-Mart

    Leave it to the Norwegians to show what needs to be done with abusive corporations. The Norwegian government is dropping Wal-Mart stock from its $285 billion pension fund. Could this spark a broader dumping of Wal-Mart stock around the world because of the company’s abhorrent behavior?

  Norway has very strong ethical guidelines for its government pension fund, requiring that the fund, "...recommend disinvestment from companies when there is an unacceptable risk that they might contribute to serious or systematic human rights violations." And they err on the side of human rights, with the standard being that "it is not necessary to prove that such complicity will take place – the presence of an unacceptable risk suffices."

    In its 2006 Annual Report, released on March 20, 2007 (and, as far as I can tell, this action got very little attention--I was alerted to it by my friends at the National Labor Committee), the Council on Ethics for the Government Pension Fund reached the following conclusions:

"There is no doubt that working conditions at textile factories in Asia, Africa and Latin America can be abysmal, and that Wal-Mart purchases a number of products that are manufactured under unacceptable conditions. There are numerous reports of child labour, serious violations of working hour regulations, wages below the local minimum, health-hazardous working conditions, unreasonable punishment, prohibition of unionisation and extensive use of a production system that fosters working conditions bordering on forced labour, and of employees being locked into production premises etc. in Wal-Mart’s supply chain."

And:

With regard to the violations of labour standards taking place at the company’s own production facilities and stores in North America, it is clear that the company is directly responsible.

When it comes to the treatment of women, the Norwegians are just as critical (referring to the mass class action gender discrimination lawsuit against Wal-Mart):

"It is relatively well documented that Wal-Mart pursues a consistent practice of gender discrimination, inter alia by pursuing a wage policy in which women and men receive different pay for the same position and work."

    Here is the conclusion of the investigation conducted by the fund's committee--and I quote it at length because it's incredible to read how a large governmental pension fund will just be honest, call it like it is and do so based on an ethical compass:

    The first element in the assessment is whether there exists some kind of linkage between the company’s operations and the existing violations of the Guidelines which is visible to the Fund. In the view of the Council, this is clearly the case. The violations of standards discussed above have taken place either in connection with the company’s operations and activity in North America, or in connection with the manufacturing of goods for sale in Wal-Mart’s stores. While it may be difficult to prove that Wal-Mart is directly responsible for violations of labour rights at its suppliers in the developing world, the Council considers there is an unacceptable risk that such a linkage exists. Where the violations of standards in the company’s own business are concerned, the linkage between this business and the violations is relatively clear-cut. The linkage in this case is highly visible due to the keen public interest in Wal-Mart shown by the press and by a number of NGO’s.

    The second element in the assessment is whether the violations have been carried out with a view to serving the company’s interests, or to facilitate conditions for the company. In the view of the Council, the type of violation focused on in this recommendation in Wal-Mart’s business operations has been undertaken with the intention of increasing the company’s profits. The Council considers that even though all companies aim at maximising their profits, it is ethically unacceptable to do so by committing, or tacitly accepting, serious and systematic violations of ethical norms. The Council finds that the violations have been undertaken with a view to facilitate or serving the company’s interests.

The third element in the assessment is to consider whether the company has contributed actively to the violations, or has had knowledge of the violations, but without seeking to prevent them. Where the violations in North America are concerned, the Council considers that Wal-Mart is directly responsible for the reported violations, and must therefore be said to have actively contributed to them. Where the reported patterns of violations in the supply chain are concerned, the Council assumes that Wal-Mart is largely aware of them and largely refrains from seeking to prevent them. The Council also recognises that Wal-Mart wields substantial influence in regard to working environment, wages etc., particularly in relation to the manufacturers which the company itself describes as direct suppliers. This is due not least to the company’s size and widespread presence in many countries, and thus to its engagement in a large number of suppliers. In this respect too, the Council therefore considers that the company’s acts and omissions fall within the scope of this element of the assessment. The fourth and final element in the assessment is whether the violations of standards are ongoing, or whether there exists an unacceptable risk that violations will occur in the future.

   Here, earlier violations might indicate future patterns of conduct. The Council assumes that the patterns of action reported where Wal-Mart is concerned, are ongoing. To the Council’s knowledge, there are no indications that the company plans to revise its approach in terms of seeking to prevent violations of labour rights at its suppliers, or as regards violations of standards for labour rights, including gender discrimination and prohibition of unionisation, within its own business operations. The Council has not received a reply to its enquiry to the company, nor do approaches from other investors appear to be prompting changes in the company’s practices. Hence in this case, it would seem that previous patterns of action may be an indication of future patterns of action. This implies, in the view of the Council, the presence of an unacceptable risk that serious and systematic violations of international standards are taking place today and may continue in the future.

   And, then, we get to the bottom line (The Petroleum Fund, by the way, is the name for the government pension fund):

The Petroleum Fund’s Council on Ethics accordingly considers that there is an unaccept- able risk that the Fund, through its investments in Wal-Mart Stores Inc., and Wal-Mart de Mexico S.A., may be complicit in serious or systematic violations of human rights. The Council recommends that Wal-Mart Stores Inc. and Wal-Mart de Mexico S.A. be excluded from the Petroleum Fund’s portfolio.

   The strong language used by the Norwegians makes you wonder why the Democratic Party can't understand the issue. Our party has very disturbing connections to the Beast of Bentonville, as I pointed out here and here.

   At the time, I suggested and raise again the idea that no Democratic consultant who works for Wal-Mart should get a dime from any union or any Democratic candidate or any Democratic political committee. I would suggest that the AFL-CIO and Change To Win both write to the Democratic Party leaders--Howard Dean, Nancy Pelosi, Harry Reid, Chuck Schumer et al.--and demand that the spigot be turned off to people working on Wal-Mart's behalf.

   Let's follow the Norwegians.

No Loss For New York

    This is an example of what a determined effort can do. The Beast of Bentonville is throwing in the towel in its efforts to get into the New York City market:

Frustrated by a bruising, and so far unsuccessful battle to open its first discount store in the nation’s largest city, Wal-Mart’s chief executive said yesterday, “I don’t care if we are ever here.”

H. Lee Scott Jr., the chief executive of the nation’s largest retailer, said that trying to conduct business in New York was so expensive — and exasperating — that “I don’t think it’s worth the effort.”

Mr. Scott’s remarks, delivered at a meeting with editors and reporters of The New York Times amounted to a surprising admission of defeat, given the company’s vigorous efforts to crack into urban markets and expand beyond its suburban base in much of the country. In recent years, Wal-Mart has encountered stout resistance to its plans to enter America’s bigger cities, which stand as its last domestic frontier.

    Kudos for this effort go to the New York City Central Labor Council and the UFCW which worked together to spearhead a coalition to keep the Beast out of the city (that coalition spanned a wide variety of unions and other community groups). The coalition got out early and pushed the campaign as soon as people got a hint that Wal-Mart was sniffing around.

    I would make one other observation that I raised at least a year ago, maybe longer than that (the old brain can't remember and I don't have time to look): the UFCW should be focusing a long-term effort on non-union Whole Foods. It has opened mammoth stores in New York, knocking out lots of other supermarkets. It is the Wal-Mart of high-end food. And I would argue that it is more vulnerable to strong consumer opposition (the "B" word) because people who shop at Whole Foods, given its higher prices and fancy produce, have more disposable income. In other words, unlike Wal-Mart, which preys on poverty, Whole Foods appeals to people who could make a decision not to shop there.

Backing Down The Beast

    The other day I had an update about Wal-Mart's attempt to get into banking. Well, lo and behold, The Beast is running for cover--this is from yesterday's New York Times:

Few efforts illustrate the breadth of Wal-Mart's ambitions — and the fears that they at times generate — as much as a nearly decade-long drive to establish its own bank.

Yesterday, Wal-Mart Stores abruptly abandoned those plans for its own bank, withdrawing its application to obtain a special banking charter after a firestorm of criticism from lawmakers, banking industry officials and watchdog groups.

    Just shows you that it pays to stand up to the Man.

      

Wal-Mart: The Bank

    It's interesting to look at the tone of two different reports today on new information about the push by the Beast of Bentonville t get into the banking industry (hey, maybe The Beast can buy up all those subprime mortgages that are starting to tank the real estate market). The Wall Street Journal opens up with:

Wal-Mart Stores Inc., underscoring its continuing push into financial services, has quietly renegotiated the terms of leases with a number of banks operating in its stores, giving Wal-Mart itself the explicit right to offer mortgages, home-equity lines of credit and consumer loans.

A portion of one of the leases, obtained by Dow Jones Newswires, also gives Wal-Mart the ability to offer debit cards and investment and insurance products either directly or through a third-party vendor. In the wording of the new lease, Wal-Mart said it could "offer these products and services in the checkout lanes, at the customer-service desk, through automated-delivery channels, kiosks" or any other place in the store.

The new lease language comes at a time when Wal-Mart has generated controversy over its repeated efforts to enter the banking business, a push that has drawn fierce opposition from the banking industry, some members of Congress and activist groups. The Bentonville, Ark.-based retailer has a pending application to establish an industrial-loan company in Utah but has promised publicly that it won't open retail bank branches.

    On the other hand, The New York Times gives the development a decidedly more ominous feel:

An Ohio representative is planning to release information today that suggests Wal-Mart's ambitions into consumer banking may extend beyond what the retail giant had previously disclosed.

The information, in the form of an e-mail message sent by a Wal-Mart employee, suggested that the company was laying the groundwork to offer its own banking products. Wal-Mart has long insisted that it was not interested in branch banking but was looking to use the bank as a way to save money.

But Representative Paul E. Gillmor, an Ohio Republican, said last night that he was concerned that the undated e-mail message suggested that Wal-Mart was telling its tenants, some which are retail banks, that it was reserving the right to become a full-service bank, including the underwriting of mortgages.

    Whatever the circumstances, the fierce opposition to Wal-Mart's foray into banking--which would crush community banks and is the most worrisome aspect of this issue, in my opinion (I have no reason to defend Citibank or Bank of America)--should continue.      

Bentonville Bruised Again

    In all the flurry last week about the health care reform alliance between Wal-Mart and labor, a little item slipped by:

Wal-Mart settles ID racial harassment lawsuit

THE ASSOCIATED PRESS --

Wal-Mart Stores Inc. has agreed to pay $125,000 to settle a racial harassment and retaliation lawsuit stemming from a complaint by an Idaho employee, the U.S. Equal Employment Opportunity Commission said Thursday.

Travis Woods, a night maintenance supervisor at a Lewiston, Idaho, store, endured two years of racial harassment in the form of epithets and graffiti and was then fired after he complained, according to the lawsuit filed against the company by the EEOC in U.S. District Court in Idaho.

Woods, who is black, had worked for the company for seven years.

Wal-Mart agreed to pay Woods $125,000. The EEOC said the company also agreed to train managers, supervisors and employees about prohibited racial harassment, and voluntarily provide information to the federal agency about its handling of discrimination and harassment complaints for a period of two years.

    Not to mention the U.S. Appeals Court ruling last week that cleared the way for the massive sex discrimination case involving up to two million women who worked for the Beast.

The Beast Pay To Make A Deal

    Most of you know that Wal-Mart had ripped off thousands of workers, failing to pay overtime pay. So, the Beast of Bentonville has made a deal: $33 million to pay back tens of thousands of workers for wages that should have been over the past five years. Wal-Mart Watch has a compilation of the media stories.

  $33 million may seem like a lot of money to you and me but it's small change for the Waltons. The only way to stop this kind of behavior is for executives to spend some time vacationing on the dime of the county: three square meals a day and a little time in the exercise yard at the local jail. Believe me, you put one or two of these folks in prison and the violations will dry up over night. Think of it as a government efficiency program: fewer violations means a lot less time grinding the cases through the court system. Hey, maybe some Republicans might like the efficiency rap, don't you think?

Wal-Mart Lies On Food?

    This is so shocking and so disappointing--the Beast of Bentonville may be breaking the law. I'm astonished that Wal-Mart--which has broken child labor laws, overtimes laws and labor laws--would be potentially trying to pass off regular food as organic food. From The Independent in the U.K.

US farming watchdog accuses Wal-Mart of mis-selling

Wal-Mart, the controversial retailing giant, is under investigation in the US over allegations it is trying to pass off non-organic foods as organic.

It has been accused of using misleading labelling that is "tantamount to consumer fraud" by an organic farming watchdog, the Cornucopia Institute. The body has handed its complaints to the US Department of Agriculture (Usda).

The Wisconsin Department of Agriculture, Trade and Consumer Protection is also conducting an investigation into whether Wal-Mart is placing "natural" produce on shelf space labelled as containing organic items.

The Cornucopia Institute claimed to have found dozens of examples of Wal-Mart's mislabelling products - from "all- natural yogurt" to soya milk "made from organic soybeans".

    The rest of the article is here.

Wal-Mart Had A Bad Year

    Or so says Fortune magazine in its current issue. The tidbit that is probably of interest to readers here is in the section where the magazine puts forth recommendations on what the Beast of Bentonville needs to do in 2007:

Extend an olive branch to the haters. HSBC retail analyst Mark Husson's suggestion was the boldest we heard: Take a one-year "holiday" from earnings growth to increase pay and particularly benefits for employees. "I could write the press release now," says Husson, whose stock-picking prowess ranked among the top 5 percent of all analysts last year, according to StarMine. "'Having done the right thing by consumers for so many years, it's now time to do right by our employees. It will be good for America and good for our employee turnover as well.'" Husson says high turnover is hurting sales, especially of upscale items.

A splashy act of goodwill, says Husson, should also make it easier for Wal-Mart to expand in blue states, where efforts to open new stores have met the most resistance. Kentucky has three times as many Wal-Mart supercenters (61) as California (21). On a per capita basis, Wal-Mart is four times more concentrated in red states than in blue, whereas Target's stores are evenly divided.

    The damage done by high turnover rates is nothing new and has been pointed out for a number of years. If the Walton family wasn't so busy adding to its staggering wealth and buying up expensive art, maybe it would actually have a clue that its own business is being hurt by the way it craps all over its workers.