Wal-Mart is the place to go if you want a discount on a book, cheaper deodorant, or a slashed grocery bill. But where do all of these savings come from? Who is paying for the $10.00 you saved today? Wal-Mart is infamous for its every-day low prices, but those low prices are the result of externalizing costs to Wal-Mart’s suppliers. Wal-Mart demands its suppliers to decrease their operating costs in order to maintain a contract with Wal-Mart, one of the biggest companies in the world. Doing so often times is the only way a company can stay in business.
However, whenever costs are lowered among suppliers, this can often result in lower wages and longer hours for factory workers. Many factories end up not complying with the laws of their country such as minimum wage and safety standards. But shareholders are starting to take a stand.
In May, at Wal-Marts annual shareholder meeting, the New York City pension funds who own $311 million dollars in stock (only .2%) of Wal-Mart, proposed that Wal-Mart require its suppliers to publish an annual report that details the working conditions of their factories. Wal-Mart is resisting this proposal because it would have to renegotiate with thousands of suppliers. However, bringing to light this severe issue of human rights issues to the leaders of Wal-Mart and before other shareholders is a step in the right direction towards eradicating human trafficking around the globe.
To read more about the New York City pension funds’ proposal, click here.