Name: Where Wal-Mart's Low Prices Come From: Sub-Substandard Foreign Labor - Shadowproof
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Where Wal-Mart's Low Prices Come From: Sub-Substandard Foreign Labor - Shadowproof

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Jim this afternoon pointed out that Wal-Mart’s low prices don’t just magically appear, rather they are the product of ethically dubious corporate policies. :"They don’t think about the the girl in China who stitched their new jeans in a sweatshop for slave wages. Or the plight of the check-out&nbsp;woman who earns minimum wage without benefits, is often forced to work overtime without compensation,&nbsp;and whose children qualify for free lunches at school. They don’t wonder about how Wal-Mart distorts and damages the free market by demanding unreasonable prices from vendors who have no choice but to do business with the 800-pound gorilla of the retail world. To them, the magic of low prices just happens."&nbsp;As if to drive home the point, , saying that the superstore chain cannot be held liable for suppliers overseas who break foreign labor laws:Plaintiffs in this case, , were employees of suppliers to Wal-Mart who work in foreign countries. Their lawsuit alleged that Wal-Mart should be liable for the suppliers’ labor code violations. The employees worked for companies who manufactured goods for Wal-Mart in countries such as China, Nicaragua, and Bangladesh. Plaintiffs alleged a unique theory for establishing liability on Wal-Mart’s behalf. They argued that Wal-Mart’s code of conduct for its suppliers (called the “Standards for Suppliers”) established a duty for Wal-Mart to ensure that the suppliers were complying with the foreign countries’ labor laws. Plaintiffs also relied on the Standards’ provision that gave Wal-Mart a right to inspect the suppliers’ to ensure they were complying with the applicable laws.Wal-Mart filed a motion to dismiss the case on the grounds that under the law Wal-Mart could not be found liable for these third-party suppliers’ foreign labor code violations. The Court agreed with Wal-Mart in holding that the Standard for Suppliers policies did not create an obligation for Wal-Mart to monitor the suppliers’ compliance with the law – it only gave Wal-Mart a right to inspect the suppliers and then cancel orders if violations existed.Wal-Mart sources labor in countries like the ones above, countries with lax labor laws already. And then it goes further, sourcing its products through supplies who break even those substandard labor laws. That is where Wal-Mart’s low prices come from.Is the solution lawsuits like this? Not likely. Even if Wal-Mart had used suppliers who didn’t break local laws, they would still source products in the third world, where labor is less protected and therefore cheaper. Instead, many say consumer awareness is the answer. If people only understood where products came from, they’d be less likely to buy those $1.99 tubs socks sewn by Chinese children.The consumer awareness route has a lot of merit, and certainly most people don’t know where their products come from, but I wonder. If you told people exactly where their stuff came from, would they even care? Our consumer culture is so much a part of our lives that this information alone may not make the difference.Shadowproof is a financially independent news organization. All of our funding comes from small donations made by readers like you.We use your donations to hire freelance writers and cover our operating costs. Monthly membership subscriptions give us the stability we need to make plans while ensuring our organization does not depend on grants or major funders. If you like what you read, support our writers with a donation today.&nbsp;

Jim this afternoon pointed out that Wal-Mart’s low prices don’t just magically appear, rather they are the product of ethically dubious corporate policies. :"They don’t think about the the girl in China who stitched their new jeans in a sweatshop for slave wages. Or the plight of the check-out&nbsp;woman who earns minimum wage without benefits, is often forced to work overtime without compensation,&nbsp;and whose children qualify for free lunches at school. They don’t wonder about how Wal-Mart distorts and damages the free market by demanding unreasonable prices from vendors who have no...

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Jason Rosenbaum

Reader-supported journalism dedicated to exposing abuses of power in business and government. Founded by @kgosztola & @bsonenstein.

Where Wal-Mart's Low Prices Come From: Sub-Substandard Foreign Labor - Shadowproof

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