The New York Times recently dropped
a bombshell about Wal-Mart, the world's largest retailer and biggest private U.S.
employer.
The Times revealed that in 2005, an internal Wal-Mart investigation found evidence that its rapidly growing Mexican affiliate had distributed $24 million in bribes to speed approval of new stores by government officials.
Rather than pursue the evidence or alertU.S. and Mexican authorities as
required by law, Wal-Mart shut down the investigation.
The Times revealed that in 2005, an internal Wal-Mart investigation found evidence that its rapidly growing Mexican affiliate had distributed $24 million in bribes to speed approval of new stores by government officials.
Rather than pursue the evidence or alert
The news probably didn't surprise Betty Dukes. She was the lead plaintiff in a class action lawsuit filed on behalf of 1.5 million female workers who accused Wal-Mart of gender-based discrimination regarding pay and promotions. The Supreme Court rejected the suit last year when its conservatives deemed the "class" of current and former Wal-Mart employees as too broad.
Wal-Mart wasn't as
lucky in dozens of other lawsuits. Its current and former workers have
repeatedly sued it for forcing them to work extra hours without pay. The
company has lost or settled over and over at a cost of hundreds of millions of
dollars.
Wal-Mart also got into legal trouble for responding to successful
union organizing drives by closing unionized stores or departments in the United States and Canada . After Wal-Mart bought Chile 's
largest supermarket chain in 2009, labor law violations in those South American
stores spiked. Viewing Wal-Mart’s overall record, it's hard to avoid concluding
that this is a habitual offender. The corporation is so arrogant that it seems
to think it can ignore the law.
But it would be a
mistake to view Wal-Mart as a single bad apple. Just to take one example, sex
discrimination suits have been brought against numerous other retail chains,
including Abercrombie & Fitch, Best Buy, Home Depot, and Publix.
Even
Costco, sometimes held up as a worker-friendly "anti-Wal-Mart," has
faced similar lawsuits. And looking beyond retail, we know that leading up to
the market's 2008 crash, dozens of financial service firms and executives bent
or broke the law. The problem isn't a few bad actors. It's an environment that
incubates unethical and even illegal corporate behavior.
It's tempting to throw
up our hands. What can we do when a dog-eat-dog market pushes companies to
compete even to the point of cutting corners?
There's an answer to be
found where you might not expect it: Brazil . In that sometimes chaotic
country of 200 million people, Wal-Mart is the No. 3 retailer and a relatively
responsible corporate citizen. Wal-Mart generally complies with Brazilian labor
laws, engages in collective bargaining with Brazilian unions, and has even
cooperated with unions and government officials to eliminate child labor in the
meat-packing plants that supply its stores.
Tight regulation
contributed to this distinction. Since 2002, the Brazilian government has
stepped up the enforcement of its labor laws, supporting unions and boosting
pay for those at the bottom as part of a drive to increase productivity and
build a bigger middle-class market. Brazilian regulators have particularly
targeted large companies like Wal-Mart without hurting the economy. Brazil has
enjoyed rapid and across-the-board growth as nearly 30 million people moved out
of poverty in the past decade.
The irony of the latest
revelations on Wal-Mart’s wrongdoing in Mexico
is that Mexico
had been viewed as the biggest success story in Wal-Mart’s global empire. At a
time when Wal-Mart’s U.S.
stores were experiencing declining same-store sales, Wal-Mex continued to boom.
Now it appears that boom may have been bought, not earned.
What the cases of Mexico and the United
States , on the one hand, and Brazil on the other, tell us is
that corporate wrongdoing flourishes where it's permitted. Corporate arrogance
will reach its limit only if we draw the line.
Chris Tilly is the
director of the Institute for Research on Labor and Employment at the University of California ,
Los Angeles .
He's writing a book on retail work around the globe.
Distributed via OtherWords (OtherWords.org)
Distributed via OtherWords (OtherWords.org)