“The City of Sherwood will provide
services and infrastructure to support the highest quality of life for our
residents, businesses and visitors in a fiscally responsible manner.”
– City of Sherwood Mission
To
the City of Sherwood,
As you know, the impending arrival of
Wal-Mart has aroused strong feelings for many residents. A recent editorial in
‘The Oregonian’ entitled ‘The Demonization of Wal-Mart,’ evokes the conflict in
now familiar terms. Those supportive of construction are portrayed as realists,
citizens who are aware of growth’s inevitability, while those opposed to
construction are understood to be against growth as a matter of principle. This
facile rendering of the Wal-Mart debate, however, is deeply problematic: by
framing the debate as an essentially parochial one, important issues which need
to be addressed are excluded from the picture. Yes, the introduction of
Wal-Mart does pose fundamental questions concerning city growth, transportation
infrastructure and the health of the economy. However, all of these issues are
intertwined with another issue which has up to now been marginalized, though it
should be at the center of considerations: human rights.
Unfortunately, Wal-Mart is a known
human rights violator with a less than sterling record when it comes to the
treatment of its employees. It is well-documented that the company uses illegal
measures to prevent workers from unionizing; disregards the statutory rights of
workers, especially women and people with disabilities; uses suppliers which
are engaged in human trafficking; and implements other illegal strategies for
increasing its profit margins – all at the expense of the average employee. So
while there may be no legal justification for stopping Wal-Mart’s construction
out of “growth” concerns, its construction does pose profound – and legal –
questions concerning morality, human rights and simple human decency. As a body
dedicated to ensuring “the highest quality of life for our residents,
businesses and visitors in a fiscally responsible manner,” I hope that the City
of Sherwood will consider the above stated implications of Wal-Mart’s arrival –
a company which has repeatedly shown disregard for the quality of life of
residents, businesses and visitors through its fiscally irresponsible policies.
There are several common arguments that
are used to justify having a Wal-Mart in Sherwood, all of which fall apart while
looking at the retailer’s human rights record. In an economy still making its
way out of the Great Recession, many supporters believe that the store will
help the economy by creating jobs and providing consumers with affordable
goods. Though this argument appears credible on the surface, it neglects to
factor in several important considerations. Of these considerations, two prove
especially cogent: what type of jobs
does Wal-Mart create, and how is it
capable of selling such low-priced goods? In 2007, Human Rights Watch (HRW)
published a report on Wal-Mart – its first report on human rights in the U.S. –
and found that Wal-Mart’s jobs rely on, and indeed, fuel a cycle of poverty.
Moreover, HRW found that the company’s business model, particularly its
signature low prices, is only made possible through policies which
systematically erode workers’ wages.
Jordan Weissmann writes in ‘The
Atlantic’ that wages have become eroded to the point that most employees cannot
even afford the company healthcare plan, a finding that was earlier
documented
by HRW. The cost of healthcare is consequently pushed upon local governments as
Wal-Mart shirks its responsibility to its employees and society: “research has
suggested that Wal-Mart workers are disproportionately reliant on safety net
programs like food stamps and Medicaid,” Weissmann explaining that this is “a
burden on tax payers.” In its 2007 investigation of Wal-Mart, HRW notes that
many state legislatures were proposing bills which aimed to get retailers to
pay their fair share of employees’ health costs, seeing as their workers
disproportionately relied on state services. These bills were privately
referred to as “Wal-Mart legislation” in policy circles. In fact, in terms of
average spending on worker benefits per employee (amongst comparable
retailers), HRW found that Wal-Mart only spends above K-Mart – and this
comparison is misleading because K-Mart went bankrupt in 2002. By contrast,
Wal-Mart is the biggest retailer in the world and the largest private employer;
it is in a place to do better. The same report notes that the posted average
minimum salary is misleading since the company often touts the average minimum
salary for managers as its storewide average.
And these strategies, bad as they are,
pale in comparison to other policies carried out by the corporation. Stores are
regularly understaffed, hours thinned and – it is charged – long-time workers
(with higher wages) fired to cut the cost of paying workers. These policies are
complemented with numerous documented incidents of workers being forced to work
overtime without compensation. To quote HRW again: “in July 2000, Wal-Mart's
Inventory Audit group visited Wal-Mart stores to determine if the stores were
‘adhering to company policies and government regulations with the scheduling and staffing of associates.’ In 127 stores reviewed
over a one-week period, the Inventory Audit group found 76,472 examples in
which the facilities ‘were not in compliance with company and state regulations
concerning the allotment of breaks and meals.’” While one might expect the
audit to be a sign of good faith on the company’s part, its subsequent refusal
to acknowledge the report’s finding suggests otherwise. Mona Williams,
vice-president of communications, responded to the report’s contents by stating
without qualification that, “‘The audit is so flawed and invalid that we did
not respond to it in any way internally.’”
Wal-Mart’s blemished record has extra
significance in Oregon. “In the three class action lawsuits against Wal-Mart
alleging wage and hour law violations that have gone to jury trials since 2000
[to 2007], juries have ruled against the company. In December 2002, a jury
issued a unanimous verdict finding that ‘Wal-Mart engaged in a pattern or
practice of suffering or permitting its employees to work off-the-clock without
compensation in eighteen Wal-Mart stores in Oregon
. . . [and] acted willfully with respect to the pattern and practice’” (HRW; my
italics). And as previously stated, the company often fires older workers –
that is, those who have worked there the longest and thus have the highest
wages – in order to cut costs. A leaked internal memo from 2005 discussed an “increase
[in] the percentage of part-time workers, likely lowering the company's
healthcare costs even more. The memo explained that ‘current initiatives to
improve labor productivity,’ including ‘increasing the percentage of part-time
Associates in stores,’ were a ‘major cost-savings opportunity with relatively
little impact on existing Associates’” (ibid.). The only obstacle, the memo
went on to explain, was “public reputation” – they did not want the public to think
that they were being cruel by firing off long-time workers in order to
artificially increase profit margins.
Discrimination materializes in other
ways too. The biggest class action lawsuit over sexual discrimination in
history, including some 1.5 million women, was carried out against Wal-Mart
(ibid.). Though it eventually fell apart, numerous lawsuits are currently underway,
representing every section of the country. Richard Drogan, a statistician hired
by plaintiffs to assess the company’s treatment of female employees, found
that:“[W]omen at Wal-Mart worked disproportionately in the lower paying hourly
jobs; earned less money than men holding the same jobs; received fewer
promotions to management; and when promoted, were advanced later and more
slowly than their male counterparts. Addressing Drogin's findings, the US Court
of Appeals for the Ninth Circuit found that a federal district court ‘reasonably
concluded that Dr. Drogin's analysis was probative and based on well-established
scientific principles’ and that ‘Wal-Mart provided little or no proper legal or factual challenges to it’” (ibid.).
What’s more, the company’s discrimination against people with
disabilities is unparalleled: “By the end of June 2001, the EEOC had filed
sixteen suits against Wal-Mart for violating Title I of the Americans With
Disabilities Act (ADA), the most against any company since the law went into
effect in July 1992. By September 2005, that number had risen to nineteen”
(ibid.).
Wal-Mart’s coercive relationship with its employees, however, is most
vividly illustrated in its attack on unions, which has become legendary. Or as
Human Rights Watch says, “Wal-Mart stands out for the sheer magnitude and
aggressiveness of its anti-union apparatus and actions” – an apparatus whose refined
techniques “deprive worker of their internationally recognized right to
organize.” During their investigation, HRW found that the company used
anti-union tactics such as aiming security cameras at pro-union workers;
illegally banning union representatives from handbilling outside stores; threatening
to let go of workers who strike; illegally altering the composition of the
workers’ negotiating units; devising pretexts for firing pro-union workers;
forcing workers to attend anti-union lectures; and the use of other illegal
techniques. This policy is both conscious and systematic. The company maintains
a centralized database – the “Remedy System” – through which it tracks union
activity, and it funds a Labor Relations Team charged with quelling pro-union
sentiment (ibid.). The Labor Relations Team’s function was recognized with
unusual candor by a manager (at whose store they had recently visited) who
referred to them as “the union busters.” At present, not a single Wal-Mart
employee in the U.S. belongs to a union despite numerous attempts to form one. This
absence is conspicuous, seeing as Wal-Mart is the biggest private employer in
the world.
Regardless of one’s position on unions, the right to organize is
enshrined in the Universal Declaration of Human Rights and U.S. law. The U.S.
is also a member of the International Labor Organization (ILO), which means
that governments are legally obliged to ensure that workers have the right to
freely organize and collectively bargain with management. To say that the
company’s attack on unionization violates human rights is thus not a matter of
interpretation – it is both an objective and legal reality.
At this point, it is worth addressing the question, why? That is to say,
why does Wal-Mart fire long-time employees, make employees work over-time without
pay, discriminate against women and minorities, crush unions, and pursue other
inhumane policies? The thread connecting these policies is simple: all of these
policies depress wages and consequently allow the company to boost profits. This
is not a sound – or moral – business model. So yes, Wal-Mart will “create
jobs,” but these are of a deficient, exploitative kind; and yes, the company’s
prices are low, but this is only because its employee’s wages are low. The most
bitter seed of all, however, is the fact that this policy is entirely unnecessary
for Wal-Mart to remain competitive and profitable. It is a selected business
model, one of choice:
“Wal-Mart, the country’s largest employer, posted $3.64 bn [billion] in
profits for the third quarter alone [in 2012] and has already registered $444
bn in sales this year. Wal-Mart heir Robson Walton, whose net worth is $26 bn,
took in more than $420 m [million] in dividends last year, while the average
employee makes $8.81 an hour or $15,500 a year. The Walton family has more
wealth than the bottom 42% of American families combined. In 2010, CEO Michael
Duke’s annual salary of $35 m gives him more in an hour than a full-time employee
makes in an entire year” (Aguilar).
Put differently, while Wal-Mart’s average salary puts a working family
under the poverty line, its executives have chosen an altogether different
option for themselves. And if the cost of increased wages were passed onto the
consumer, the price increase would be negligible and still allow Wal-Mart to
compete. Jordan Weismann of ‘The Atlantic’ writes that, “A study from
UC-Berkeley’s Center for Labor Research and Education suggested it would cost
the average shopper an average $12.49 a year if Wal-Mart paid its workers a
full $12.00 an hour and passed most of the cost to consumers.”
In conclusion, there is scant evidence to show that Wal-Mart is looking
out for the best interests of its employees. By contrast, there is positive
proof that the company exploits its workers and violates human rights. So while
the City of Sherwood may not be able to revoke Wal-Mart’s construction permit
based on “growth” concerns, this is in some ways irrelevant to greater legal,
social and moral concerns. In any case, the company’s policies conflict with
the City of Sherwood’s goal of ensuring “the highest quality of life for our
residents, businesses and visitors.” Accordingly, I request that the City of
Sherwood:
1.
Look
into the legal implications of allowing a known human rights violator to
construct a business in the community.
2.
If
Wal-Mart does pursue business in Sherwood, create a legal framework for
ensuring the rights of its workers – especially those concerning job tenure,
wages and the right to organize.
3.
Ask
the company to explain precisely how
it intends to guarantee that the rights of its workers are respected; this
being an act performed in good faith.
Wal-Mart is the biggest and most influential retailer in the world, as
well as the largest private employer. How it treats its workers sets the
standard for how retail workers on all ends of the supply chain are treated. Other
governments[i]
have begun to question the legality, morality and benefits of working with a
corporation that refuses to guarantee the human rights of its own workers. I
hope and trust that the City of Sherwood will do the same.
Respectfully,
Jonathan Ng
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