CWS 3.0: June 13, 2012

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Costs: New Report Is Critical of Outsourcing, Walmart

A new report that is critical of outsourcing —and the use of staffing firms in such circumstances — was released last week by the National Employment Law Project, a New York-based group. The report calls for several steps to get tougher on outsourcing by companies. However, Walmart has already blasted the report as distorting facts.

Entitled “Chain of Greed,” the report says outsourcing harms workers by offering lower pay and more hazardous conditions.

It focuses activities at Walmart’s warehouse in Mira Loma, Calif., which has been subject of a lawsuit by workers. Claims in the report include workers being paid on a piece-work basis that resulted in wages that were lower than the mandated minimum wage. The warehouse is operated by a Walmart subcontractor which, in turn, contracts with staffing firms to provide workers.

A Walmart spokesman told the Los Angeles Times last week that the report distorted facts. NELP’s report was critical of Walmart’s outsourcing of warehouse activities and its subcontractors’ use of staffing firms.

The report said outsourcing is on the rise across key U.S. industries including construction, day labor, janitorial, warehousing, meat processing, trucking and other areas. “Often relying on the use of temporary and staffing agencies, outsourcing in these industries has also resulted in comparatively lower wages for work similar to the jobs previously performed in-house,” according to the report.

Recommendations in the report for fixing the problems include:

  • “Enforce existing labor standards that hold multiple entities joints responsible for any work performed in the business.”
  •  “Adopt innovative state and federal laws and enforcement strategies to target contracting abuses.”
  •  “Secure agreement from Walmart and other supply chain controllers to adopt and follow strong codes of conduct.”
  •  “Document the scope of contracting-out and its impact on U.S. workers.”

For the full report, click here.

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