Walmart is Mexico’s largest private employer, according to Newsweek, and that doesn’t include the 4,300 unpaid teenagers that it lets “volunteer” to bag groceries at its Mexican stores.
The teenagers work for gratuities and Walmart says the teenagers “cannot be considered workers,” and are therefore exempt from Walmart’s “code of ethics” that prevents “associates” from going unpaid.
Meanwhile business is booming in Mexico for Walmart. They have plans to open 125 additional stores and “reported net earnings of $1.148 billion in 2006 ”
So why are the baggers going unpaid, relying only on gratuities? Local custom. From Newsweek:
The use of unsalaried youths is legal in Mexico because the kids are said to be “volunteering” their services to Wal-Mart and are therefore not subject to the requirements and regulations that would otherwise apply under the country’s labor laws. But some officials south of the U.S. border nonetheless view the practice as regrettable, if not downright exploitative. “These kids should receive a salary,” says Labor Undersecretary Patricia Espinosa Torres. “If you ask me, I don’t think these kids should be working, but there are cultural and social circumstances [in Mexico] rooted in poverty and scarcity.”
In a country where nearly half of the population scrapes by on less than $4 a day, any income source is welcome in millions of households, even if it hinges on the goodwill of a tipping customer. And Wal-Mart did not invent the bagger program that, as a written statement from the company notes, pre-dates the firm’s arrival in Mexico, nor is it alone within the country’s retail sector in benefiting from the toil of unpaid adolescents. But in Mexico City, for example, the 4,300 teenagers who work in Wal-Mart’s retail stores free of charge dwarf similar numbers laboring unpaid for Mexican competitors like Comercial Mexicana (715) and Gigante (427).
Can Walmart not afford the Mexican minimum wage? Newsweek says its less than $5 an hour. Just from a consumer’s perspective, we’d be annoyed at having to personally pay the wages of our grocery bagger, but obviously that is the cultural norm.