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Friday, October 24, 2003

Productivity Mismeasurement Problems

Those of you who don't know my surfs down piece on undocumented workers and structural labour reform really should take the opportunity to check it out. So WalMart has been caught in the act. And like WalMart just how many more are there? Of course the WalMart productivity revolution is much more than this scam. But still it is worth asking just how big this is. Between the low Chinese wages, and the undocumented workers in the US (do they exist? Do they show up in the productivity numbers?) no-wonder margins are high. One things is IT enabling a cost revolution, another is squeezing the lemons out in a very time-honoured way. WalMart, which is it?

Wal-Mart probed over illegal staff

US officials have arrested 250 workers at retail giant Wal-Mart, as part of a clampdown on the hiring of illegal immigrants. The US Immigration and Customs Enforcement (ICE) Bureau, part of the new Department of Homeland Security, said the immigants were hired by a contract cleaning firm, and that Wal-Mart executives had turned a blind eye to the practice. The ICE's investigation, known as "Operation Rollback", targeted workers at 61 Wal-Mart stores in 21 states. Investigators are still pursuing at least 50 workers.

According to ICE, some Wal-Mart officials had direct knowledge of the recruitment of illegal immigrants. Federal agents have reportedly conducted searches at Wal-Mart's Arkansas headquarters. And federal grand jury subpoenas have been issued for the Wal-Mart executives to testify. Wal-Mart said it was "committed to cooperating" with federal officials, and stressed that it was not directly responsible for the behaviour of third-party contractors. The probe is another stroke of bad news for Wal-Mart, the world's biggest retailer. The firm already faces a wave of lawsuits alleging sexual discrimination, and has been criticised for its apparently anti-union stance.
Source: BBC News

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