Walmart, in an effort to keep prices low, puts pressure on the factories to produce items at a certain cost or they'll walk. The factory is left with two (both equally unsavory) options: close down the factory when Walmart cancels the contract or lower prices to Walmart's standards by lowering working standards and pay for the workers. There have been numerous lawsuits filed by these workers against Walmart. According to Global Exchange,
In September 2005, the International Labor Rights Fund filed a lawsuit on behalf of Wal-Mart supplier sweatshop workers in China, Indonesia, Bangladesh, Nicaragua and Swaziland. The workers were denied minimum wages, forced to work overtime without compensation, and were denied legally mandated health care. Other worker rights violations that have been found in foreign factories that produce goods for Wal-Mart include locked bathrooms, starvation wages, pregnancy tests, denial of access to health care, and workers being fired and blacklisted if they try to defend their rights.
Just last week, the Supreme Court heard arguments on the case of Dukes v. Walmart. A group of women from Walmart's operations around the world banded together to hold Walmart accountable for allegedly discriminating against female employees. The hearing was to determine if the women could be classified as a 'class' and if so, this would be the largest class action lawsuit in history. In typical large corporation style, this case has been dragged out for 11 years, according to Walmart Watch.
So the question at hand: is Walmart really culpable in the mistreatment of the workers producing its wares although it does not own the factories? I definitely think so because Walmart is a large corporation with a lot of power, which it knows. It regularly uses this power to knowingly manipulate vendors. When faced with financial ruin, these companies turn to ethical compromise which is not OK either. This is a systems problem, starting at the top.
Let's not forget that we, the consumers, are part of this system as well. As those of you who know system theory, a change in any part of the system causes the entire system to change. In other words, small change can lead to big change. You can do something.
Students Against Sweatshops
International Labor Rights Forum