Corporate Responsibility Mondays

This week’s featured company is Kohl’s. At another attempt to try and show how unbiased I am, Kohl’s is a store that I love to go to because it has cheap “name brand” clothes. I mean currently, I’m wearing a pair of shorts I got at Kohl’s. I chose this company because it’s somewhat in the same genre of other stores that I enjoy like Nordstrom Rack and TJMaxx. And just because it’s “cheaper” for us to buy doesn’t mean it costs any less for those who make it.

Again my attempt is not to be a moralist . . . but began with me wanting to be more informed about what goes in to the low cost of the products that I buy.

Don’t forget about Ariah’s post on a company that is playing its role in creating a sustainable world.

Kohl’s is a rather large company with over 107,000 employees. It also brought in 13.4 billion in revenue in 2006. By all inidications a rather lucrative and profitable company. But they have a litany of complaints against them.

They sell clothing produced by the Leader Garment Factory in El Salvador. This factory gave mandatory pregancy tests. Women who tested positive were immediately fired. This factory also had an obligatory overtime shifts which was 6 days a week, 13 hours a day. Which is 78 hours a week. As compensation the workers were paid $0.60 an hour. Which is a third of the cost of living (which is extremely, extremly small). Meaning that these employees get paid $46.80 for 78 hours of work. Which is what I spent in the store when I bought my pair of shorts and 2 t-shirts.

In other factories that supplied Kohl’s clothing . . . in addition to the 80 hour work week and wages that were 27 percent below the national required minimum wage . . . employees had to work in unsanitary conditions where in the summertime the temperature in the factories would easily be over 100 degrees.

Another large garment factory supplier to Kohl’s (owned by the Taiwanese and operated in Nicaragua) fired employees who attempted to form a legal union. Shortly after its formation, over 400 of the new union workers were fired including their newly elected leaders. Despite government pressure, the factory has refused to reinstate the workers and make upgrades to their labor practices.

Here are a couple examples of their mark-ups. When a shipment of carpenter shorts cleared customs in Miami they had a customs value of $7.15 but were sold in store for $34 . . . a 320% mark-up. A shipment of carpenter jeans had a customs value of $11.52 per pair and sold at $34 . . . for a 195% mark-up.

In addition, their CEO Lawrence Montgomery (the guy who does the least amount of work along the food chain) $1.646 million dollars in 2005 alone. And cashed out $8.4 million in stock options . . . leaving $35.37 million in unexercised stock options.

The rich get richer and the poor get poorer.

Sources: Responsible Shopper, National Labor Committee

Don’t forget about Ariah’s post on a company that is playing its role in creating a sustainable world.

[tags]Social Responsibility, Corporate Responsibility, Kohl’s, Department Stores, Sweatshop Labor, Responsible Shopper[/tags]