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At What Cost Bargains?

November 26, 2003

Las Vegas hotel worker Chastity Ferguson earns $400 a week and depends on Wal-Mart's low prices to feed and clothe her four children. Isabel Reyes, a Honduran laborer who struggles to push fabric through a sewing machine 10 hours a day, makes the bargains possible with her low salary, equal to $35 per week. The two women chronicled in "The Wal-Mart Effect," a three-part series by Times reporters in the U.S. and abroad, put human faces on the painful dichotomy being created as Wal-Mart reshapes how the retail world works.

In the Southern California supermarket strike, established grocers demand wage and benefit cuts to stay competitive as Wal-Mart lays plans for 40 "Supercenters," with full grocery sections, in California. The 70,000 union workers walking picket lines fear their middle-class comforts are about to slip away. Yet union-conducted surveys show that their members shop at Wal-Mart. Wal-Mart's ceaseless pressure for lower-cost goods speeded the shift of domestic apparel production to lower-cost plants in China and Central America. Yet workers and governments in countries where $35 a week is a good wage clamor for Wal-Mart's business.

The issues are powerful and global but not new. Think of the Triangle Shirtwaist Co. fire in New York in 1911. The deaths of 146 people, mostly low-wage female workers, aroused the public to demand powerful workplace protections, culminating decades later under Franklin D. Roosevelt. It took that long to build social consensus on balancing business and worker rights.

The issues surrounding Wal-Mart are far less dramatic, and not all of them are clear-cut. Certainly Wal-Mart should suffer more than a regulatory slap if, as alleged, it knowingly allowed cleaning contractors to hire cheaper, undocumented workers. The same goes for charges of forcing employees to work overtime without pay and of discriminating against women in promotions. Unions must be allowed to conduct legal organizing drives.

After that it gets harder. Henry Ford's aim when he built his first automobile assembly line was to make a product that his workers could buy. Now, what good is served if low-paid labor cannot afford to buy even the cheap merchandise lining Wal-Mart's shelves? If "always lower prices" also means "always lower wages," what does it mean to the larger economy that is still being kept afloat by consumer spending? Or to overstressed public health systems caring for workers who can't afford their employers' health plans?

Asking these questions is only a start, as the long debate after the Triangle fire tells us. In the early part of the 20th century, America was deciding whether to keep accepting child labor and grueling, filthy working conditions in its cities and on its farms. The questions have grown more complicated, as have the answers. Wal-Mart is a prosperous business because it responds so aggressively to the demands of consumers. But Wal-Mart's actions fuel global wage competition. Americans must learn to ask themselves -- and tell their legislators -- what they want, why they want it and what the true costs of an $8.63 polo shirt are.

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