Onshoring exploitation

Posted: 29 July 2012 in Uncategorized
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Much of the discussion of the so-called Wal-Mart model focuses on the offshoring of low-wage manufacturing jobs, especially to China. What we tend to forget about is the onshoring of other jobs, especially those involved in transportation and distribution. Those jobs create surplus for the firms that run the warehouses for Wal-Mart and other big-box retailers, and are an important condition of their low prices.

Paul Harris describes the conditions in California’s Inland Empire:

While much recent attention has focused on abuses at the outsourced Chinese supply chains of companies like Apple, some experts believe Walmart’s US-based supply chain is built on a similar model, but one constructed within America US itself.

As is common in China, the supply chain is marked by layers upon layers of subcontracting. So, while every single box packed and unpacked at NFI Crossdock is destined for Walmart, the warehouse is owned, run and staffed by myriad other companies. The supply model has been dubbed “insourcing”, and experts say it is defined by ruthless cost-cutting as each layer of subcontracting seeks to eke out a profit margin.

“Walmart’s suppliers run out of places to squeeze out the costs, and they are left with the workers,” said Catherine Ruckelshaus, co-author of a recent report on the supply chain called Chain of Greed, that was produced by the National Employment Law Project.

Walmart is not the only big-box retailer supplied by the huge warehouses of the Inland Empire. Other major firms, such as K-Mart, Home Depot and Toyota, also work there. But Walmart sets the model for the others by its sheer size.

The impact of the immense pressure on Walmart suppliers can easily be seen at what workers call simply “the Crossdock”. Workers say they are given brutal quotas for the number of boxes that they need to shift each hour. Supervisors, they say, make it clear that any failure to meet those quotas – even at the risk of physical injury – could be the loss of a job. “I feel that I am just something they could use and throw away,” said Limber Herrera, 29, pictured, who is supporting a wife and two children on his wage.

The supply chain of Wal-Mart and other sellers of cheap goods in the United States involves the exploitation of workers in both offshore manufacturing and, lest we forget, onshore warehousing.

  1. […] I explained back in July, the supply chain of Wal-Mart and other sellers of cheap goods in the United States involves the […]

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