A page one story in Sunday's Washington Post looked at the increasing connection between Wal-Mart and its Asian suppliers, focusing specifically on what the paper terms the "ultimate joint venture" between the company and China, "their symbiosis influencing the terms of labor and consumption the world over."
Noting that Wal-Mart is the biggest retailer in the world (with sales of $245 billion) and China is the world's most populous country (with 1.3 billion people), "more than 80 percent of the 6,000 factories in Wal-Mart's worldwide database of suppliers are in China. Wal-Mart estimates it spent $15 billion on Chinese-made products last year, accounting for nearly one-eighth of all Chinese exports to the United States." If Wal-Mart were a separate country, the Post notes, "It would rank as China's fifth-largest export market, ahead of Germany and Britain."
Ironically, China's Community Party "has become perhaps the world's greatest facilitator of capitalist production, beckoning multinational giants with tax-free zones and harsh punishment for anyone with designs on organizing a labor movement."
It is the working conditions in China that make it possible for Wal-Mart to obtain products at low cost and sell them at low prices. Reporting from Shenzhen, China, the Post writes, "Most of the 2,100 workers here are poor migrants from the countryside who have come to this industrial hub in southern China for jobs that pay about $120 a month. A sign on the wall reminds them of their expendability in a nation with hundreds of millions of surplus workers: 'If you don't work hard today, tomorrow you'll have to try hard to look for a job.'"
While Wal-Mart says that it is rigorous about maintaining labor standards in countries like China, labor activists there say that the government often is willing "to overlook labor violations to appease businesses that can be milked for taxes, fees and bribes. The activists argue that as Wal-Mart pits suppliers against one another and squeezes them for the lowest price, the workers suffer."
Noting that Wal-Mart is the biggest retailer in the world (with sales of $245 billion) and China is the world's most populous country (with 1.3 billion people), "more than 80 percent of the 6,000 factories in Wal-Mart's worldwide database of suppliers are in China. Wal-Mart estimates it spent $15 billion on Chinese-made products last year, accounting for nearly one-eighth of all Chinese exports to the United States." If Wal-Mart were a separate country, the Post notes, "It would rank as China's fifth-largest export market, ahead of Germany and Britain."
Ironically, China's Community Party "has become perhaps the world's greatest facilitator of capitalist production, beckoning multinational giants with tax-free zones and harsh punishment for anyone with designs on organizing a labor movement."
It is the working conditions in China that make it possible for Wal-Mart to obtain products at low cost and sell them at low prices. Reporting from Shenzhen, China, the Post writes, "Most of the 2,100 workers here are poor migrants from the countryside who have come to this industrial hub in southern China for jobs that pay about $120 a month. A sign on the wall reminds them of their expendability in a nation with hundreds of millions of surplus workers: 'If you don't work hard today, tomorrow you'll have to try hard to look for a job.'"
While Wal-Mart says that it is rigorous about maintaining labor standards in countries like China, labor activists there say that the government often is willing "to overlook labor violations to appease businesses that can be milked for taxes, fees and bribes. The activists argue that as Wal-Mart pits suppliers against one another and squeezes them for the lowest price, the workers suffer."
- KC's View:
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Not being en economist, we're not sure what the answer is to this question. (Though we are pretty sure that a dozen economists probably would give us a dozen different answers, and that the one thing the answers would not have in common is simplicity.)
But what we think needs to at least addressed is whether the availability of low-cost goods imported from China is worth the cost of all those manufacturing jobs that have been exported outside the US. We're not saying that this is just a Wal-Mart-related issue, nor that the Bentonville Behemoth is solely responsible for the trend.
But the Nation of Wal-Mart and its foreign policy need to at least be part of the debate. And we're not sure that "always low prices" is, by itself, a justification.
