Will Wal-Mart Mexico Bribery Scandal Help Build Support for Labor?

by Administrator

“Wal-mart [is] a company that, more than any other on earth, sets labor standards across industries that feed its vast global supply chain,” observed Spencer Woodman in The Nation.

From factories in China and Bangladesh to transportation hubs where “perma-temps”  labor for dirt-cheap wages to feed supply lines to the company's ubiquitous stores, Wal-Mart has successfully resisted unions and kept wages low. Disclosures about Wal-Mart’s brutal but sophisticated low-wage strategies have failed to seriously dent the company’s image as a friendly provider of low-cost goods. And Wal-Mart has been essentially impervious to attacks by organized labor and the Occupy movement, two marketing professors argue.

But Wal-Mart's smoothly-running PR machine seized up this week when a major front-page New York Times investigation revealed that top Wal-Mart de Mexico executives shelled out approximately $24 million in bribes to speed up permits for its rapid expansion in Mexico during the last decade. (Wal-Mart is the largest private employer in Mexico, with 200,000 workers and one-fifth of all Wal-Mart stores.) The newspaper presents detailed evidence that top Wal-Mart officials knew about the illegal behavior, but effectively shut down the investigation and did not notify authorities in the U.S. and Mexico.

The bribery scandal threatens to shatter Wal-Mart’s carefully-manufactured image as a company based on strong moral principles and concern for the public. The bribes represent a flagrant violation of the Foreign Corrupt Practices Act which forbids payment of bribes by U.S. businesses to foreign governments. “What's perhaps worse, top executives in the U.S., including the current and former CEOs, allegedly knew about this and covered it up,“ NPR reporter Chris Arnold noted.

It remains to be seen how deeply Wal-Mart’s image will be wounded and if the corporation’s loss of legitimacy may lead to increased public awareness of and support for Wal-Mart workers' struggles for justice. Joe Hansen, president of the United Food and Commercial Workers (UFCW) union, which has been seeking for years to organize Wal-Mart workers and to alert the public to a wide range of alleged abusive practices (e.g., wage theft, sex discrimination), issued a blistering statement on the meaning of the bribery disclosures:

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