Thousands of adolescents work as unpaid baggers in Wal-Mart’s Mexican stores.

The retail giant isn’t breaking any laws.

Wal-Mart prides itself on cutting costs at home and abroad, and its Mexican operations are no exception. The company’s practices have aroused concern among some officials and nongovernmental organizations (NGOs) that Wal-Mart is taking advantage of local customs to pinch pennies at a time when its Mexican operations have never been more profitable.

Wal-Mart is Mexico’s largest private-sector employer in the nation today, with nearly 150,000 local residents on its payroll. An additional 19,000 youngsters between the ages of 14 and 16 work after school in hundreds of Wal-Mart stores, mostly as grocery baggers, throughout Mexico—and none of them receives a red cent in wages or fringe benefits. The company doesn’t try to conceal this practice: its 62 Superama supermarkets display blue signs with white letters that tell shoppers:

"OUR VOLUNTEER PACKERS COLLECT NO SALARY, ONLY THE GRATUITY THAT YOU GIVE THEM. SUPERAMA THANKS YOU FOR YOUR UNDERSTANDING. "

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.

Federal District Labor Secretary Benito Mirón Lince. “In economic terms, Wal-Mart does have the capability to pay the minimum wage [of less than $5 a day], and this represents an injustice.”

In its defense, Wal-Mart says it fully complies with a 1999 agreement covering the teenaged baggers that the Mexico City municipal government negotiated with the Supermarkets and Department Stores Association of Mexico. The company also says it goes beyond the obligations of that accord, awarding bonuses twice a year to baggers who maintain high grades in school and also providing accident insurance that covers the kids not only when they are on duty, but also when they are en route between home and workplace. The company’s written statement cited a study conducted by the Mexican government and a U.N. agency that found that teenagers participating in the baggers’ program were less likely to use illegal drugs than peers who panhandled or hawked merchandise on city streets.

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