LAT

Wal-Mart and the LAT

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Today's second installment (of three) in the L.A. Times front-page series on 'The Wal-Mart Effect" looks at how the world's largest corporation gets suppliers around the globe to cut costs. The lead anecdote today is about a Honduran seamstress whose daily quota is up to 1,200 shirts a day -- two a minute for 10 hours -- and pressure is on to do better, while Wal-Mart pays a few cents less per garment than last year.

Sunday's opening story looked at some of the trade-offs communities make in embracing Wal-Mart -- lower prices, less pay for workers, fewer retail and manufacturing jobs. Here are the series nut grafs:

Wal-Mart gives. And Wal-Mart takes away.

From a small-town five-and-dime, Wal-Mart Stores Inc. has grown over 50 years to become the world's largest corporation and a global economic force.

It posted $245 billion in sales in its most recent fiscal year — nearly twice as much as General Electric Co. and almost eight times as much as Microsoft Corp. It is the nation's largest seller of toys, furniture, jewelry, dog food and scores of other consumer products. It is the largest grocer in the United States.

Wal-Mart's decisions influence wages and working conditions across a wide swath of the world economy, from the shopping centers of Las Vegas to the factories of Honduras and South Asia. Its business is so vital to developing countries that some send emissaries to the corporate headquarters in Bentonville, Ark., almost as if Wal-Mart were a sovereign nation.

The company has prospered by elevating one goal above all others: cutting prices relentlessly. U.S. economists say its tightfistedness has not only boosted its own bottom line, but also helped hold down the inflation rate for the entire country. Consumers reap the benefits every time they push a cart through Wal-Mart's checkout lines.

Yet Wal-Mart's astonishing success exacts a heavy price.

By squeezing suppliers to cut wholesale costs, the company has hastened the flight of U.S. manufacturing jobs overseas. By scouring the globe for the cheapest goods, it has driven factory jobs from one poor nation to another.

Wal-Mart's penny-pinching extends to its own 1.2 million U.S. employees, none of them unionized. By the company's own admission, a full-time worker might not be able to support a family on a Wal-Mart paycheck.

Then there are casualties like Kelly Gray. As Wal-Mart expands rapidly into groceries, it is causing upheaval in yet another corner of the economy. When a Supercenter moves into town, competitors often are wiped out, taking high-paying union jobs with them.

Tuesday's final piece will be about Wal-Mart's clash with labor here in California. There's a photo gallery at LATimes.com. Some initial reaction to the series with plenty of comments is at CalPundit here and here.


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