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Wal-Mart The Transnational of Poverty

Wal-Mart The Transnational of Poverty

By Gustavo Castro Soto and Ryan Zynn

In Mexico it already controls at least 54% of the total market. However, for the state government and for the majority of the people this is a symbol of development, but it is enough to review the role that the world's largest transnational corporation has played in the global economy to get an idea of ​​the impact it will have on peoples and communities.

Wal-Mart has arrived in Chiapas under the name of the companies it has bought such as Sam’s Club, Bodegas Gigante or Bodegas Aurrerá, and with it the echoes of underdevelopment, exploitation and the poverty it generates. But the multinational company also owns the Superama and Suburbia stores and the Vips, El Portón and Ragazzi restaurants. In Mexico it already controls at least 54% of the total market. However, for the state government as for the majority of public opinion this is a symbol of development in an entity that is torn between migration and the poverty that drives it. With Wal-Mart in Chiapas, poverty is increasing and now that it intends to settle in the city of Comitán, the consequences will be serious for the countryside and local commerce. It is enough to review the role that the largest transnational corporation in the world has played in the global economy to get an idea of ​​the impact it will have on peoples and communities, and especially in an indigenous, migrant region full of small local border trade companies.

The Transnational Monster.


Wal-Mart first opened in 1962 in Rogers, Arkansas. In 1991 it entered the international market by opening its first store in Mexico. It currently mis-employs more than 1.5 million people worldwide. It is estimated that around 70 million people make their purchases at Wal-Mart each week and other sources confirm that there are 20 million customers who visit their stores daily. In just one day in 2002, its total sales exceeded the Gross National Product (GNP) of 36 countries. In 2003 it generated $ 244.5 billion in sales and is 3.5 times larger than its closest competitor. The following year its sales were for 256,000 million dollars (equivalent to 50% of the military spending of the United States in the last year). Outside the United States, it sold 47.5 billion dollars in the last year. Wal-Mart opens a new store every 42 hours. At the rate at which the market is devouring, it is estimated that by 2010 it will be able to double its size. However, other sources consulted assure that Wal-Mart generates 600 thousand unemployment due to the opening of 70 stores a year, which affects small and medium-sized merchants located around its stores. However, according to WalmartWatch, for every two precarious jobs it generates, it causes three job losses in the area where it is installed.

In the United States, it employs 1.2 million people in 3,500 stores. Its expansion is overwhelming and it announced the "continuation of the aggressive proliferation of its units during the fiscal year that began on February 1, 2004". In the United States, it plans to open 55 new discount stores, 230 new Super Centro markets, 30 new neighborhood markets and 40 new SAM's clubs very soon. For John Menzer, president of Wal-Mart's international division: "Country by country, the world is discovering the great value of shopping at Wal-Mart." Menzer warns that Wal-Mart is becoming a global brand like McDonald’s or Coca Cola. It is estimated that by 2010 it could have up to 6,000 Wal-Mart stores outside the United States.

In Mexico Wal-Mart opens a store every 5 days, currently having 764 stores, although other sources affirm that there are 641. It is presumed that by the end of 2005 it will have 834 stores operating. Wal-Mart International estimates opening up to 140 new units in existing markets. In March 2004, Wal-Mart do Brasil announced the purchase of the Bompreco chain of stores, which has 118 units (hypermarkets, supermarkets and mini markets). According to other sources consulted, in April 2004 Wal-Mart had a total of 1,494 units in the following countries: Mexico (641), Puerto Rico (53), Canada (236), Argentina (11), Brazil (144), China ( 35), South Korea (15), Germany (92) and the United Kingdom (267).

Wal-Mart at the Corporations-Nation Concert.

Although it is the multinational that moves the most money in the world, Wal-Mart ranks fourth in Latin America and the Caribbean with sales reaching 10 thousand 676 million dollars after the Spanish Telefónica, the American General Motors (whose capital is greater than Australia's GDP), and the auto parts producer Delphi, whose workers in northern Mexico have maintained a strong fight against the company due to the terrible working conditions in which they maintain men and women who work in their maquiladoras. According to the Economic Commission for Latin America and the Caribbean (ECLAC) Wal-Mart is followed by the German automakers Volkswagen and DaimlerChrysler; then the American Ford, the Spanish oil company Repsol YPF, the Korean electronics company Samsung and the Japanese Nissan. Altogether, according to information from ECLAC, the 10 largest transnational companies operating in Latin America generate annual sales of $ 115.8 billion, equivalent to 18% of Mexico's Gross Domestic Product (GDP).

Of the 100 main economies that exist in the world, 51 are corporations and 49 correspond to countries. Transnational corporations control 70% of world trade. If Wal-Mart were an independent country, it would be China's eighth trading partner. Its influence in countries is so great that it can influence them economically and politically. Wal-Mart is ranked 19th out of the 100 largest economies on the planet, surpassing Sweden, Norway and Saudi Arabia. It is the largest direct-to-consumer sales company in the United States, Canada, and Mexico.

This is the dynamics of large corporations that are merging, wiping out everything in their path and are giving rise to the next and last economic model of dying capitalism: nation-companies. These transnationals that have their own budgets, their own labor, salary and health policies all over the world. They maintain their diplomatic relations with various governments. They develop their own values, identity, culture, uniform, ways of thinking and living, even their own hymns that workers must sing and clubs and family associations to reproduce those values. They can move their capital and even specialist workers across any border. They have more budget than any other nation on the planet. They also have their own security, their own infrastructure and controlled territory. They can also count on safe access to public services and even to their electric power generating plants.

The Wal-Mart Style Violation of Labor Rights.

Generally, an employee's salary in the United States is $ 8 an hour for a 26-hour workweek. But with what Wal-Mart charges for (voluntary) medical services, it absorbs almost 75% of the worker's salary. On the other hand, a unionized employee of a supermarket in San Francisco in the United States earns an average of $ 42,552 annually, which is affected by the arrival of new Wal-Mart stores. Although more than two-thirds of Wal-Mart employees are women, less than 10% hold managerial positions, which was the average for a company in 1975. In fact, there is a lawsuit in the United States against Wal-Mart for sexual discrimination, but there are also lawsuits for wage inequality; or for hiring Mexican immigrants without social security and without paying them overtime. In March of this year, although it did not admit to an illegal act, Wal-Mart paid a fine of 13 million dollars for having hundreds of undocumented Latino employees (especially Mexicans), working under semi-slave conditions (doing cleaning tasks when stores were closed, for wages less than half the minimum wage).

Since 1995, the transnational has faced in the United States more than 70 legal processes for anti-union activities, as well as multiple other processes including fines of more than 120 thousand dollars in three states for destroying and hiding evidence in cases of client lawsuits against the company . In another case, he had to pay $ 18 million for falsifying evidence about a woman who died in the parking lot of one of his stores. In 2003, The New York Times magazine declared in an editorial that the "walmartization of the workforce threatens to push thousands of Americans into poverty." In February 2004, George Miller, a US congressman, released a report on Wal-Mart that documented abuses including using child labor.

The new organization WalmartWatch reported in a paid insert in The New York Times that taxpayers lose the $ 1.6 billion that the government designates to public assistance because the corporation does not provide its employees with adequate wages and benefits. Wal-Mart is also accused of abusing child labor and without rest, during school class hours, without time for lunch and without overtime pay. Other workers, after closing the store at 11 pm and without breaks, must stay to clean the store and leave after midnight without enjoying overtime pay. In the United States, half of Wal-Mart employees have such precarious salaries that they fall within the range of the federal food stamp program intended to support low-income or unemployed people. Wal-Mart employees in Washington state make up the vast majority of low-income program attendees. Interestingly, California reported a 24% increase in crime growth after the arrival of Wal-Mart ..

In Mexico, according to the National Front against Wal-Mart, the transnational does not pay overtime to its workers; wages are pitiful; it does not provide social coverage for its employees and it does not have a union within its company. ‘Uni-Comerce’, the global trade workers union, characterized Wal-Mart as "an obsessively anti-union company, at home and abroad." Therefore, the installation of Wal-Mart stores brings misery wages and local unemployment due to the closure of thousands of stores around them.

According to researcher Silvia Ribeiro, among many other "awards", Wal-Mart was named in 2000 "Sweat Workshop of the Year" by Maquila Solidarity Network of Canada. In 2003, the National Organization for Women in America (NOW) named her a "merchant of shame" for her policies of sex discrimination against female employees. Equal Rights Advocates, Impact Fund and Public Justice Center filed a lawsuit on behalf of 700,000 plaintiffs against Wal-Mart for sex discrimination, which would be the largest lawsuit in history against a private company. According to Wal-Mart Watch, a civil organization that publishes complaints from citizens affected by the company, the transnational's warehouses have had multiple negative impacts on the communities where they were established. For example, for every two jobs created by that company, an average of three jobs that already existed in the community have been destroyed.

Wal-Mart's Land Use Violations.

Wal-Mart's violations go beyond the workplace. In Mexico, he tried to violate the use of the land at the “La Hacienda” Golf Club, where it is residential; violated the use of land in Teotihuacán, which is agricultural; violated the use of land in the Vistahermosa Fractionation in Cuernavaca, Morelos, where it is residential; violated land use in Tepeapulco, in the state of Hidalgo where it is agricultural; violated land use in Tecamachalco, Puebla where it is agricultural; tries to violate the use of land in Amecameca, State of Mexico where it is industrial; He tried to violate the use of land in Mérida, Yucatán, where it is residential; In Acapulco, Guerrero, and in Ixtapaluca, State of Mexico, he violated the Ecological laws due to the excessive felling of centenary trees. He is also accused of deteriorating and destroying historical centers such as Teotihuacán, Amecameca, Pátzcuaro and Puebla. This concept of an Americanized mall aims to wipe out any culture that gets in the way.

For environmentalists this does not end there. According to some studies, a typical Wal-Mart store draws 3,315 cars a day. But a 250,000-square-foot super center with a 16-acre parking lot generates 413,000 gallons of runoff for every inch of rainfall, which means that annually those parking lots generate 240 pounds of nitrogen, 32 pounds of phosphorus and 5 pounds of zinc for local streams. , in addition to creating "hot islands". For other opponents of Wal-Mart, the criticism focuses on the aesthetic contamination of its stores when it tries to settle in colonial and indigenous cities such as the Michoacan city of Pátzcuaro, or in archaeological regions such as Teotihuacán. Thus, with Wal-Mart, communities, consumers, workers and the environment lose as the concentration of wealth increases and poverty at the same time.

Wal-Mart's Impoverishing Strategy.

Wal-Mart seeks a monopoly by achieving the best comparative advantage over other companies. This advantage is built by combining market competition


with low prices; precarious working conditions; bankruptcy of small and medium businesses and local producers; tax evasion by simulating sales abroad to avoid paying VAT; and authoritatively and ruthlessly squeezing its suppliers to ruin with the use of various mechanisms such as imposing the price, paying them after 90 days, demanding a high quota of products that they can little support, charging them for the losses of broken products, or imposing on them special fees for advertising and opening of new stores. Another Wal-Mart strategy is to use free trade agreements that offer the lowest tariffs. According to WalmartWatch, about 70% of the items Wal-Mart sells come from China and according to data from the Institute for Economic Policy, the United States has lost nearly one million jobs since the 1990s due to imports from China by numerous companies, of which Wal-Mart represents about 10% of the total volume. For this reason, when Wal-Mart arrives in a small city such as Bodegas Aurrerá in the Chiapas city of Comitán, it creates a strong displacement of economic, labor and fiscal activity.

Wal-Mart, after it has displaced / finished all independent and local stores and companies (pharmacies, clothing, food, hardware, etc.), begins to close the ones it has bought consolidating the market and forcing people to buy in the Super Center. Then, Wal-Mart does nothing with the stores, leaves them empty like the 371 closed in the United States, or they rent them, but their contract stipulates that whoever rents it cannot use it in a business that competes with the products that Wal-Mart sells in their stores (pharmacies, clothing stores, food, etc.). In addition to this local impact, Wal-Mart benefits by not paying some taxes and other tax incentives or infrastructure facilities that a federal, state or municipal government offers it as long as it "invests in the progress of the region." In the United States, Wal-Mart pharmacies (many times the only pharmacies for miles) are denying married and single women to fill their contraceptive prescription for religious reasons, but without any legal justification.

When entering a city Wal-Mart never opens directly to the public. Use other strategies first. He buys a company that is operating locally and successfully and gradually takes control. Then close them. Eliminate a big competitor and gain presence even with the army of employees and their massive local advertising. It also assumes control of the stocks of stored goods and does not open new lines. Al Norman, who is a strong leader in the anti-Wal-Mart movement in the United States, pointed out that “what was done in Mexico is very instructive: that country was an experimentation field for the method of operation. They basically acquired existing warehouses, they moved throughout all of Mexico and that became the applied practice in other countries, such as the United Kingdom, Germany and Japan. He bought existing operations, as if to leave without a scratch ”. In the UK, Wal-Mart bought the Asda chain had a devastating effect. Joanna Blythman, a food journalist, in her book “Shopping: The Powerful Blow to British Supermarkets”, published in May 2004, states: “I learned that British supermarkets now dance to the beat of Asda, our second largest chain. big. Since 1999, when the world's largest retailer, the US Wal-Mart chain, took over, Asda's strategy of 'every day lower prices' unleashed a price war in supermarkets, where chains without strength in your purchasing power. To stay alive with Asda, our major UK chains must always be more ruthless in the way they operate, or else they risk losing their place at the top of the supermarket superpowers. "

Wal-Mart also threatens small stores in countries where it doesn't even work. They squeeze urban and rural providers. Its stores are supplied by cheaper suppliers from other countries and not from local producers, where wages are low and human rights and environmental standards are not respected. It is estimated that 50 specialized stores (butchers or bakeries) close weekly in the United Kingdom, and some farmers have even committed suicide due to the crisis that has been generated in their economies.

In 1998, the Irish government decided to regulate the size of its stores despite pressure on government officials to increase the size of its stores. On the other hand, many products that Wal-Mart sells in its stores are about to expire or are of poor quality or wasted. The meat is of poor quality and is exported frozen for many months from the States, which have not passed adequate sanitary tests or filled with transgenic hormones for livestock. The Diario Reforma in Mexico conducted a study in 2003 analyzing the samples of beef, pork and chicken that enter via Wal-Mart, Sam's, etc. Many of them tested positive for E. Coli, Salmonella, and were also frozen for more than 9 months.

David Anderson, associate professor at Center College in Danville, Kentucky, says that “artificially low prices do not improve the standard of social life, all they do is consume more than necessary by buying items that are not needed, that are acquired just because they're cheap and supported by the machinery of the $ 1 billion a year advertising industry. " Anderson adds that the reduction in prices has a cost in labor and environmental exploitation in exporting countries, whose lower regulations companies such as Wal-Mart take advantage of. In the case of Mexico, the National Front against Wal-Mart accuses the company of “gangster and thuggish attitudes through Mr. Raúl Argüelles Díaz González, Vice President of Corporate Affairs, as he threatens to put people in jail who oppose the construction of their stores with the complicity of corrupt authorities in addition to drawing up criminal records, even death threats to opponents. " The Front affirms that “Ing. Eduardo Castro Wright, General Director of Wal-Mart in Mexico, of Ecuadorian nationality, we ask for your guidance to inform the public about your arrangements outside the Law for tax fraud, violations of land use, ecological laws and regulations of roads nationwide. "

The Struggles Against Wal-Mart

1) The government of the State of Mexico granted permission to Wal-Mart to install a store in the restriction perimeter C of the archaeological zone of Teotihuacán. In 2004, the Civic Front in Defense of the Teotihuacán Valley intensified the protests: "They will not defeat us, now we are calling on the population of the country and of the various countries to carry out a boycott against Wal-Mart. The authorities have deceived us, the governor is a liar because he said he would relocate the mall. Now more than ever our movement will continue, ”said Emmanuel D’Herrera, one of the three activists who are on hunger strike. On January 18, 2005, the National Front against Wal-Mart announced its constitution. held a press conference to publicize the front's constitution.

2) In the State of Mexico, the “La Hacienda” Golf Club succeeded in getting settlers, merchants from San Mateo Tecoloapan, civil society, and the authorities to reject the installation of a Wal-Mart commercial store within the subdivision on land in the one who tried to violate the use of residential land.

3) In the city of Mérida, in the Mexican Yucatán Peninsula, the settlers of the Monterreal Fraccionamiento and the municipal authorities rejected the installation of a Wal-Mart Shopping Center in an area of ​​116,000 m2, trying to violate the use of the land. The colonists won all the legal proceedings against the company; despite the fact that the construction of its Shopping Center had already begun.

4) In the city of Pátzcuaro, Michoacán, protests against the multinational Wal-Mart intensified at the beginning of 2005. Citizen protests indicated that the state of Michoacán receives more millions of dollars in remittances from its migrants in the United States than any other Mexican entity. In 2004, they sent 2.2 billion dollars that Wal-Mart presumably intends to co-opt in the region.

5) In the United States, 248 projects against Wal-Mart have been rejected to date. Opposition to Wal-Mart overseas came from unions (for low wages), local regulators (for rapacious prices) and from small businesses that have gone bankrupt. Currently workers of ‘United Food’ and ‘Commercial Workers (UFCW)’ have a lawsuit against them for not allowing unionization. In Pineville, North Carolina, two Wal-Mart stores were rejected after they investigated that the property taxes generated will not cover the salaries of two additional police officers needed to serve the Super Centers. In a neighborhood of Los Angeles, California, a social resistance from the neighborhoods also began for the installation of a new Wal-Mart shopping center.

Consumption habits create, generate and give life and sustenance to an economic model and system. Consumption makes us, shapes us, shapes us; creates values, customs and ways of living for us. There is no doubt that we are what we consume. And there is also no doubt that another no less difficult trench of struggle against the neoliberal model and the nascent company-nation model will be the war of consumers. Although it could be the Achilles heel of corporations, it is one of the most difficult issues to agree or convince. When talking about what you eat or what you buy and where, the war of arguments and arguments are unleashed to justify consumption habits. Whoever takes the step to modify these habits, will have a political consciousness beyond what one imagines.

Sources and for more information: www.ecologycenter.org/terrain/ Wal-Mart: Que Remate ?, Terrain Magazine, Summer 2004; CorWatch www.corpwatch.org/; www.forbes.com; articles by Roberto González Amador from La Jornada; www.laopinion.com/; Economic Commission for Latin America and the Caribbean (ECLAC); WalMartWatch; National Front against Wal-Mart A.C. www.geocities.com/frente Frente Todos Contra Wal Mart In Pátzcuaro; The day, Mexico D.F. September 27, 2004 and October 7, 2004; La Jornada Michoacán, February 11, 2005; Andy Rowell “Wal-Mart Supermarkets Globalize Inequality at Low Prices” 12/6/2004; Al Norman's Sprawl-Busters Trust Community, www.sprawl-busters.com; Joanna Blythman 'Shopping': http://harpercollins.co.uk/books/ Friends of the Earth Supermarket Campaign, www.foe.co.uk/campaigns/ UK Clusters Coalition Against Supermarkets, www .breakingthearmlock.com; Wal-Mar and the Unions: www.union-network.org/; Selection of articles by Andy Rowell, www.andyrowell.com; To Norman of the ‘Anti-Wal-Mart Movement,‘ The Case Against Wal-Mart ’, www.raphel.com; Andy Rowell,: ‘Welcome to the Wal-World’, Multinational Monitor, International Monitor, October 2003; Steven Greenhouse, In-House Audit Says Wal-Mart Violated Labor Laws, January 13, 2004; Daniel Méndez, “mperialismo: Wall-Mart, the company-nation”, from the Center for Solidarity Collaborations, [email protected], EstaSemana Bulletin, Havana, July 2004; New York Times, November 15, 2003 and www.nytimes.com/2004/01/13/; www.nytimes.com/ads//index.html; Los Angeles Times, January 22, 2004; http://edworkforce.house.gov/democrats/).

* Gustavo Castro Soto placeholder image
CIEPAC, A.C. Center for Economic Research and Community Action Policies Website: http://www.ciepac.org/


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