Wal-Mart and other major global retailers in the apparel and food industries are driving down working conditions for millions of mostly women workers worldwide, according to a new report by the British-based international development agency, Oxfam.

Despite the retailers’ claims that they demand their contractors comply with basic labour standards, their demands for ever-quicker and cheaper goods are making compliance impossible in many cases, according to the report, Trading Away Our Rights.

“This is where globalization is failing in its potential to lift people out of poverty and support development,” said Phil Bloomer, the director of Oxfam’s “Make Trade Fair” campaign. “There is a widening gap between the rhetoric of global corporate social responsibility and the reality of the corporate business model.

“Many corporations have codes of conduct to hold their suppliers accountable for labour standards, but their own ruthless buying strategies often make it impossible for these standards to be met,” he added.

The new report, which is based on hundreds of interviews with workers, factory and farm owners, global brands, importers, exporters and union and government officials in 12 countries, comes amid growing efforts by multinational corporations to reassure their consumers that workers who produce their goods are able to earn a decent living.

But a spate of recent newspaper articles and studies have suggested that these efforts may be undermined by growing competitive pressures created by the demands of retailers and the ever-growing number of poor countries that have heeded advice and pressure from international financial institutions (IFIs) to open their economies to attract investment and jobs.

“Globalization has hugely strengthened the negotiating hand of retailers and brand companies,” according to the report. “New technologies, trade liberalization, and capital mobility have dramatically opened up the number of countries and producers from which they can source products, creating a growing number of producers vying for a place in their supply chains.”

Wal-Mart, the world’s biggest retailer, has led the field in putting this model into practice, the report said. It is currently buying products from some 65,000 suppliers worldwide and selling to over 138 million consumers each week through its 1,300 stores in 10 countries.

It has made China, where wages are far lower than anywhere else in Asia and workers are denied the opportunity to form independent unions, the centre of production, a key point made in feature article that appeared in the Washington Post last Sunday.

“As capital scours the globe for cheaper and more malleable workers, and as poor countries seek multinational companies to provide jobs, lift production and open export markets,” the Post said, “Wal-Mart and China have forged themselves into the ultimate joint venture, their symbiosis influencing the terms of labour and consumption the world over.”

That marriage, however, according to the both the Post account and the Oxfam report, has come largely at the expense of the worker on the factory line. “Wal-Mart pressures the factory to cut its price, and the factory responds with longer hours or lower pay,” a Chinese labour official who declined to be identified for fear of retaliation told the Post, “And the workers have no options.”

That was also the message of a report released Monday by the New York-based National Labour Committee and China Labour Watch on a toy factory in Ping Township in Guangdong province that produces goods for Wal-Mart. The two groups reported that the mostly female labour force at the plant were paid only about half the legal minimum wage and forced to work longer hours than the legal maximum. It also reported that fire exits were normally locked.

Wal-Mart responded to the report by insisting that it conducted regular inspections of all of its plants in China, but the groups said that plant managers were always informed of the inspections in advance and coached the workers on what to tell the inspectors.

The report was largely consistent with the findings of the Oxfam study that put the main responsibility for the worsening situation on corporate buying teams that pressure suppliers to deliver “just-in-time” orders at ever-lower prices in hopes of squeezing maximum profit from goods once they are sold to shoppers in mainly wealthy countries.

“Today’s business ethos is ‘make it quick, make it flexible, make it cheap,’” said Bloomer. “Anyone appalled by labour conditions in the world today should be asking, ‘so who turned up the heat?’ The workers at the bottom of the global supply chains are helping to fuel national export growth and shareholders’ returns, but their jobs are being made more insecure, unhealthy and exhausting and their rights weakened.”

To minimize resistance, contractors are employing workers who are less likely to try to join trade unions in those countries where they exist. For the most part, these include young women, often migrants or immigrants, who are easily intimidated if they do not cooperate with management.

“Jobs in labour-intensive industries are celebrated as empowering women,” according to Bloomer. “While we welcome the fact that millions of women are getting a wage, the wage alone doesn’t free them from poverty. Instead, they’re being burnt out by working harder, faster, over longer hours and with few health, maternity or union rights. It’s a poor strategy for improving women’s lives,” he added, noting that the IFIs, such as the World Bank and the International Monetary Fund (IMF) were complicit in worsening the situation by encouraging governments to make their labour markets ever more “flexible.”

  • In Chile, for example, 75 per cent of women in the agricultural sector are hired on temporary contracts picking fruit and put in more than 60 hours a week during the season, but one third still make below minimum wage.
  • Fewer than half the women in Bangladesh garment factories have a contract, and the majority receives no maternity or health benefits. Some 80 per cent fear dismissal if they complain.
  • In China’s Guangdong province, young women face 150 hours of overtime each month in the garment factories, but only 40 per cent have a written contract and 90 per cent have no access to social insurance.

Given these kinds of situations, governments must step in to guarantee workers basic labour rights, including the right to join trade unions and bargain collectively. At the same time, a greater effort must be made to enforce labour laws, while consumers must insist that retailers do a far better job of monitoring labour conditions to ensure that the employment they are creating in poor countries is not exploitative, according to the report.