AbstractThe horrifying conditionsthat a labor faces in developing countries have been well documented. Fromreports of workers losing their limbs to many cases of young blood toiling longdays in factories have been published. Many business power houses employunskilled poor labors to maximize profits and gain a competitive edge.
However,what remains un-negotiated is their working conditions and wages. The exploitation ofvulnerable workforce leads to low cost production, which is crucial to produceinexpensive goods for fulfilling the needs of developed nations and muchimportantly, paves way for advancement of the developing countries by providingemployment. But the existence of moral hazard of poor working conditions cannotbe overlooked. The purpose of this paper to investigate and qualify why peopleengage to work in such unhealthy conditions and how the burden of progress canshift from employers to parent industry to enforce proper labor standards, withan intent to understand the complex nature of work and harsh economic realitiesacross the globe.
We will start with an introduction to labor market indeveloping nations, then look into current practices and policies and what arethe ethical stakes regarding this dilemma and thus, move to suggested remediesand associated challenges. OverviewWith the advent ofglobalization many multinational corporations, to gain higher margins, started”sourcing” their goods in developing economies with low labor costs, wherelabors had negligible expectations for job security or benefits and there existabsolutely no pressure from/of organized workforce. Driving search of suchcompanies ends with manufacturing plants with least costs which is in turnattributed from low wages and fewer safety measures. This global competitionhas shaped the poor structure of economic progress in developing countries. Majorindustries like clothing, footwear, rugs, toys, chocolate, coffee, etc.
producein such factories. World-known brands like Apple, H&M, Nike, Adidas,Walmart, Hersey and Uniqlo are involved in such cases, to name a few.Based on poor workingconditions and pay of factories, in the 1800s writers coined the term”sweatshops”, speaking frequently of “sweated labor” employed by “sweaters” whowere intermediaries between retailers and workers. Today, Sweatshop is a widelyused pejorative term for a workplace that has poor, socially unacceptableworking conditions. The work may be difficult, dangerous, climaticallychallenged or underpaid. The US Department of Labor defines a sweatshop as afactory that violates two or more labor laws, such as low wages/benefits, childlabor or improper working hours. At the forefront, asweatshop can be seen as a vicious circle of exploitation which traps theworkers, who generally fall under socially backward class or below the povertyline. One of the many arguments againstsweatshops is that it denies a worker basic treatment that all human beingsshould receive.
Featuresof SweatshopsWorking conditions:1. Long wages2. Long working hours3. Health/ safety hazrads4.
Arbitrary discipline by management5. No job security6. Physical abuse, threats, intimidation7. Child labour8. No representation of workers for voicingagainst governing concerns Contributing factors:1. Dense population2. Limited education3.
High unemployment4. Few job alternatives5. Extreme poverty6. Workers with low productivity7. No safety net8. Corrupt or undemocratic government9.
Non transparency or secrecy of workplace10. No system to protect basic human rights11. Consumer ignorance SweatshopconditionsConcerns over sweatshopsare hardly new. Many reported incidents have galvanized public concerns andsometimes legal action. If only recent controversies are taken intoconsideration, among them is much talked about controversy about Nike sourcefactories in 1990s where workers were paid much below minimum wages and were allegedlyintimated to ask for an exempt from regulations.
Apple too produces its widelyloved Iphones in Foxconn factories, China where thousands of employees aresubjected to low wage, long working hours and unsafe conditions with several casesof suicides. In 2013, in a building collapse of a manufacturing unit producingWalmart goods in Bangladesh a whooping number 1127 workers died and accordingto a series of reports from the Asia Floor WageAlliance suggests very little has been done to improve conditions for garmentworkers in developing Asian nations till now. The year 2016 oversaw scathingreports against H&M for intensive labor exploitation and abuse in Cambodiaand India. While discussionsof sweatshops often embark illegal working environment in developing conditions,many economists believe that such factories provide jobs which they wouldn’thave had otherwise and a future prospective to pay off their debts and live acomfortable life. Despite of substandard conditions, workers eagerly sign upfor such jobs to avoid a life of abject poverty.
ChallengesCompany such as Nikefaced public unrest and bad publicity due to indulgence in exploitation ofworkforce but a MNC like this often don’t own manufacturing units which prepareits products. The corporation generally buy its products from suppliers whoeither find a factory that can source them or use an intermediaries. The intermediariesfind providers in various locations to produce goods.
This model is howevercompletely dependent on the oversight and compliance of intermediaries. Since retailersare insulated from manufacturing units, they depend upon intermediaries to beanswerable and avoiding unfavorable media coverage is only possible if 1. No such conditions exist in first place2. Source factory is capable of hiding suchconditions, if existent3. Generally, consumers are incapable of verifyingsuch accusations. Even when consumers do learn of such problems, the MNC couldsimply ask for compliance and if still persists, can switch to other factory.
One such example is WalMart.However, maintaining contractswith corporations is an incentive for source factories to comply with laborlaws. EthicalstakesWelfareThe benefits ofsweatshops fall into two forms: first is wages that help them attain a morecomfortable life and second is preference satisfactions, for instance some maychoose these jobs because of being unskilled. Appeals to welfare do not resolvethe controversy over sweatshops though. “One size fits all” does not apply hereand a policymaker must appreciate it. Only a policy designed to encouragebetter conditions home and abroad without jeopardizing job prospects should beconsidered in light of other moral concerns.
Dignity and basichumanitySweatshops provide laborsan unfair choice between their gloomy status quo and working in hazardoussituation. Those in favor of sweatshop might argue that consent eliminates worriesabout mistreatment. It is true that there may be a desperate need foremployment on the part of worker but this is not an emergency that requiresrescue, rather it requires policy responses appropriate to improve things forthe best. Policies must in fact reduce number of people requiring rescue in thefirst place.
However, it should not become a mere barrier so that thecorporations move to different country for the ease of doing business, but atradeoff of mutually beneficial agreements. Complicity in injusticeMany developing countriesare often deficient in their rule of law and use arbitrage privileged todistribute benefits. Should policy discourage sourcing where minimum wages orworking conditions are not met? The answer lies in the fact that policiesshould facilitate improvements for the least well offs. Somepolicy recommendationsFraming policy optionsFraming issues are backgroundcommitments to morality, constraining available options to salientpossibilities. Trade agreements andtrade sanctionsCambodia in 1900s gainedaccess to US apparel market by imposing better labor laws which were monitoredby an NGO, International Labor Organization. The apparel industry is leadingemployer in Cambodia, while some will argue that conditions have stagnated. A policymakermight inspire for long lasting improvements. However, sometimes policy may seemto hurt they want to help the most.
Much still hangs on what is permissible, ifnot required. MonitoringDeveloping nations do notallow worker coercion, but there are huge inconsistencies on the part ofmonitoring authorities and bodies. However there still exists room forexperimentation on monitoring grounds. In Brazil, there were difficulties inconforming to labor laws and securing economic growth. So the governmentregulators experimented and found that promoting workers consortia minimizedcosts and led to reliable employment. When a developing country imposes onestringent policy it reduces the possibility of discovery of new alternatives. ConclusionSweatshops conditions arealarming and helping distant workers that produce those inexpensive commoditieswe enjoy is not an easy matter.
What might help them the best might actuallylead to closing off all opportunities available to them. So there exist an uncertaintyin how might they could be helped.Of course, public policyis what solves this dilemma best. The policy should therefore be framed keepingin mind the ethical stakes under considerations. Sometimes some considerationsmight conflict with each other, while at most times they might not. Public policymay increase minimum working conditions.
Investigation might be needed at timeswhat work best in a given conditions and disputes could be eliminated byclarifying the rooted considerations and ethical principles that influenced thepolicy.