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Wal-Mart's killer rollbacks: The human cost of lower prices

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Wal-Mart is "so confident in our low prices, we guarantee them." And they are always reassuring us that their "Rollback low prices just got lower."

Ever wonder how they do it? We all know on a basic level how they do, even as so many of us shop there. They, as much of retail corporate North America has done, have sourced all of their purchasing from factories in the Third World that can produce certain goods more cheaply than they could be produced in North America, and that can do so with little to no regard for the lives of their workers.

But this fixation on the bottom line is even more deadly and crass than many consumers would have assumed. It turns out that, when given the chance, Wal-Mart directly refused to pay for a plan to make fire safety improvements in the factories that it gets its clothing from, as it would have cost them money. Money that might have meant an increase in prices on the products that the factories produce of a few pennies an item. Or that might have cut into Wal-Mart's profits by the same amount had they chosen to keep the end prices to consumers the same.

As Bloomberg News revealed on December 5, 2012, minutes from a meeting in 2011 around plant safety in places like Bangladesh show that Wal-Mart, and others, while well aware of the risks to the lives of the workers involved, refused to invest in factory safety. It unfolded this way:

Sridevi Kalavakolanu, a Wal-Mart director of ethical sourcing, told attendees the company wouldn’t share the cost, according to Ineke Zeldenrust, international coordinator for the Clean Clothes Campaign, who attended the gathering. Kalavakolanu and her counterpart at Gap reiterated their position in a report folded into the meeting minutes, obtained by Bloomberg News.

“Specifically to the issue of any corrections on electrical and fire safety, we are talking about 4,500 factories, and in most cases very extensive and costly modifications would need to be undertaken to some factories,” they said in the document. “It is not financially feasible for the brands to make such investments.”

Now it is clear the predictable price in blood that was paid for this decision. On November 24, 2012, 112 workers died in an horrific factory fire in Bangladesh at the Tazreen Factory that produced garments for Wal-Mart and other chains. Wal-Mart has claimed that the factory was no longer "authorized" to produce garments for it, but it did, somehow, continue to do so, and documents that have come to light clearly show that "as recently as September, five of 14 production lines at the factory were making shirts and pajamas for Wal-Mart "

These workers died in appalling ways. Many jumped to their deaths from windows to avoid being burned alive. Others perished clustered together with no way out, as there were no emergency exits, and not enough exits for those numbers of people to escape a rapidly spreading conflagration. They would have burned to death or died of asphyxiation due to extreme heat or smoke.  Absolutely no consideration had been given to the safety of these people.

In 1960, 95% of the clothing purchased in the United States was made in the United States. Today the figure is 5%. The Canadian garment industry has seen a similar and equally dramatic decline in production.

Entire former garment districts of cities are now home to fancy loft style condos, offices and bars or restaurants.

Despite widespread belief to the contrary, it is not true that the United States does not produce anything anymore. In terms of the overall value of the goods it produces the U.S. still leads the world and this value of total production has doubled since the mid-80's. Factories across the U.S. produce many industrial and military goods, for example, that are highly valuable and that, for a variety of reasons, cannot be "outsourced" to the Third World. This is true in the food and beverage industries as well. The reasons range from "national security", to the costs associated with and the availability of skilled labour, to quality control requirements, to obvious factors such as the proximity of factories in the food and beverage industries to farms and to markets. 

What is true, however, is that far fewer people are employed by the manufacturing sector; a sector whose often unionized workplaces meant higher wages. In fact the precipitous decline in the percentage of Americans working in  manufacturing over the last 20 years has as much to do with "efficiency" in production methods as it does with outsourcing. In other words, American factories can produce what they did a generation ago with significantly fewer workers. This is one of the reasons that employers have been able to put downward pressures on their manufacturing workforces' wages and benefits even in industries that remain largely within North America. There are many more people available to do fewer jobs.

But when it comes to garments and shoes specifically, and to other products that can be made in whole or in part with unskilled labour, production has been almost entirely shifted to countries where the labour conditions are identical to those that existed in the "Dark Satanic Mills" of the industrial revolution in England. This has allowed the "rollback", disposable goods, consumerist model of North American retail; a model embodied by Wal-Mart, but equally true of other major brands, chains and retailers.

And it is not only true of the garment industry. An expose published in England in October details the "living hell" that workers in "Communist" China endure to put the iPhone 5 in our pockets:

The horrific human cost of producing the phone has been exposed at Foxconn in Taiyuan, northern China by the Sunday Mirror. The investigation revealed that low-paid factory staff have been given targets of producing one gadget every 30 seconds, 1000 a day, or be sacked.

They said that the exhausting workload is so high that they are banned from talking to one another during production, and even have paid fines for visiting the toilet more than three times in the grueling shift hours.

The take-home salary adds up to just 230 pounds a month, the paper said. Humiliation begins at the factory gates, where workers have to walk through a barrage of metal detectors and are subjected to a full-body search, it added.

The horrors of the Triangle Shirtwaist Factory fire of 1911 in the United Sates, hauntingly similar as they are to what happened in Bangladesh just mere days ago, helped to lead to the beginnings of real health and safety standards in American factories. Workers in many factories enjoyed relatively good wages and working conditions during the period of the great post-war "compromise", thanks to the struggles of unions and the pressures that this put on employers and governments. But with the growth of globalization and the rise of the middle-class consumerist culture in which "saving" money is a near spiritual belief, as is the overwhelming fixation of corporations on delivering returns to shareholders, even the lower wages and still often substandard working conditions in factories in North America with unskilled production lines became an obvious hindrance to the corporate urge to provide both profit and "cheap" prices.

It was not possible for retail chains and brands to recreate in North America the conditions of the Triangle Factory, so they did so in factories across the Third World. Out-of-reach of even the most inadequate health and safety standards of some US states, out-of-reach of the North American union movement, and, perhaps in many respects most importantly, out-of-sight-and-mind of the North American consumer. While images of their neighbours jumping to their deaths to avoid burning alive would likely cause an outcry, the direct hope is that, if this is happening far away, to people in countries that many would be unable to find on a map, consumers by-and-large simply won't care.

Given that, in spite of widespread awareness of Wal-Mart's appalling workplace practices and the low wages in their stores in North America, there has been no discernible shift away from Wal-Mart among consumers, there is little reason to think that the corporations are wrong.

Scott Nova, the executive director of the Workers Rights Consortium said in The Nation “Walmart’s greed and arrogance appear to be boundless...This is a company that siphons billions in subsidies from U.S. taxpayers, that has made billions in profits on the backs of Bangladeshi workers, then scoffs at the notion that it should be asked to pay one dime to protect those workers from dying in factory fires while they sew Walmart clothes.”

And Wal-Mart will continue to scoff at the notion, until they, and the entire consumer corporate sector complicit in these workplace practices are forced to do otherwise.

While encouraging consumer boycotts of the worst corporate offenders can be one aspect of this, their impact is ultimately limited. The problem is, there are almost no retail or electronic consumer chains or corporations who, in any meaningful way, differ from Wal-Mart in profiting by these practices in the Third World. Buying goods manufactured in horrific factories at Target, Best Buy or Giant Tiger instead of Wal-Mart accomplishes little.

In the end, allowing for free trade or the free flow of goods into Canada without regard for the conditions under which they are produced is the fundamental problem. We have to fight the entire notion of detaching consumption from morality, worker's rights and social justice. We have to take action to ensure that built into our trade with all countries is a support for the rights of workers in those countries; even if this means defying international trade organizations or abrogating trade agreements.

This will, without any doubt, mean higher prices on many consumer goods and a return to a less disposable consumer culture. But the alternative is to continue to treat the lives of hundreds-of-millions of people in other countries as disposable.

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