The Walmart Effect on Warehouse Workers in the US

Posted by on Jun 7, 2012 in Walmart Watch Blog | One Comment

Labor law violations and poor working conditions in the sweatshops of the Global South (where many of Walmart’s products are manufactured) are common knowledge among consumers and activists. This week, however, the less-told story of Walmart’s impact on the supply chain right here in the United States is making headlines.

A new report by the National Employment Law Project (NELP) sheds “…light on this shady side of outsourcing by profitable corporations like Walmart, and the devastating impact of the practice on U.S. workers… In the case of Walmart’s logistics systems, it is a story of low-paid and extremely dangerous warehouse work, with workers unloading and loading boxes, up to 200-pounds, from shipping containers on a piece rate system for days and hours on end.”

The L.A. Times covered the report outlining the current state of Walmart’s domestic warehousing practices, under which a large portion of workers are hired by third party labor contractors which “often rely on poorly paid temp workers.” The story also notes that Walmart “has applied its aggressive cost cutting to logistics, helping to drive down wages and benefits for U.S. warehouse workers… [the] complex hierarchy of contractors and subcontractors has lowered the quality of warehouse jobs across the country, including in Southern California, where the mostly Latino workforce has been disproportionately affected.”

The NELP study found that Walmart’s cost-cutting pressure has induced competitors to imitate the company’s irresponsible behavior; the ‘Walmart Effect,’ as documented in the retail and manufacturing sectors, has made its way to U.S. warehousing as well. According to the LA Times, “Wal-Mart’s practices are being imitated by competitors who are demanding the same low prices from logistics companies to compete,” which has depressed labor standards in the already low-wage industry.

So why does Walmart work with intermediaries to hire warehouse workers in the first place? One theory, presented in the LA Times article, is that the presence of contractors and subcontractors “could be used to insulate the retailer from responsibility for pay and personnel practices on the warehouse floor.” Of course, there is no way to know what the company’s internal hiring strategy might be, but it is clear that egregious wage and health and safety violations have recently occurred in warehouses supplying Walmart.

In the Inland Empire, an area east of Los Angeles in Riverside and San Bernadino Counties that is the nation’s hub for imported goods coming in from the Pacific, multiple warehouses serving Walmart have recently received citations. Cal/OSHA levied $256,000 in fines against four warehouses for safety violations in January 2012 and the California Labor Commissioner issued a $616,000 fine for wage violations at Walmart subcontractor Schneider Logistics in November. Warehouse workers, with the support of Warehouse Workers United (WWU), have sued three companies that handle Walmart goods in the Inland Empire over alleged fraudulent pay practices. Edna Bonacich and Juan David de la Lara of the University of California (Riverside and Berkeley, respectively) have also noted that most warehouse workers don’t earn a basic family wage and that employment through temporary staffing agencies increases economic insecurity for Inland Empire families, who are already struggling due to the recession.

This post was written by Rebecca Cassler.

1 Comment

  1. Anonymous
    June 8, 2012

    Walmart Try on Warehouse because CEO Mike Duke been cutting all Walmart and all Sam’s Club Wage With Unaffordable Healthcare

    From Tom P Noonan


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