"Sweatshops" & Corporate Ethics
We had a discussion in one of my classes today about corporate ethics. At issue was American corporations use of “sweatshops”—categorized by poor working conditions, long hours, low wages, and the use of child labor factories in developing countries. The discussion centered on the question of whether this was an ethical and/or socially responsible practice. My professor and several of my classmates made the point that even though workers in sweatshops may not be treated/paid to the same standards of American workers, they are still better off than many of their countrymen. In other words, some wages are better than no wages. If the factories weren’t there, the people would be unemployed, starving, and living in poverty. My professor also made the point that the cultures of many developing countries value money differently. He surmised that people in these countries may not care about having a lot of money (and the goods/privileges that come with it) and therefore don’t mind low wages. According to him, they are just happy to have a job.
To me, that’s a cop-out and a way to justify the exploitation of poor people in developing countries. Even if corporations are supplying jobs to people who would otherwise be unemployed, it does not justify paying them slave wages and forcing them to work in deplorable and unsafe conditions. It’s taking advantage of their plight. To say that the people are better off to have jobs is merely an attempt to skirt the issue and rationalize an otherwise disgusting practice.
Plus, I’m sure the decision to place factories in developing countries has nothing to do with bringing jobs to poor countries. It’s all about lowering labor costs and increasing revenues.
What do you think? Is it a question of corporate ethics and social responsibility? Or should corporations stay out of the ethics business and just focus on the bottom line?
posted by ze roberto @ 9/26/2005 08:18:00 PM
4 comments
4 Comments:
The optimal solution, in my opinion, would be to let the free market rule. Businesses should be motivated primarily by the bottom line, and consumers should dictate what practises are acceptible. For example, if it comes out that Dick's Sporting Goods, Inc. is using transgendered Eskimo children working for 35 cents a day to produce canoe paddles, consumers should not buy said paddles.
The problem with this approach is that it does not work. Just as democracy requires an educated and interested electorate to function correctly, so does capitalism. Looking at the current state of the country, I would argue that democracy is not working out so well for us right now, and likelise, big companies with exploitative labour practises are, by and large, getting away with it.
So what is the answer? The liberal in me screams "regulation", but the libertarian in me recoils at that thought. I think a good start would be to stop giving these damn companies huge tax breaks for offshoring! If large corporations deserve tax breaks at all, they should be awarded for keeping jobs in America or being environmentally friendly. Not just for making money (and then contributing it to various politicians).
So my answer to your question would be that I would prefer companies to be good citizens, ethically, morally, environmentally, etc., but the question of how to force them to be that way is a tricky one. Certainly, we need to come down hard on them with the full force of the Law when they cook the books or dump sludge in the river. And I think that if we simply stop rewarding legal, but disgusting behaviour such as sweatshop labour, with tax breaks, and instead use the tax break carrot for socially conscious goals (upgrade your old, pollution-spewing coal power plants for tax credit, anyone?), we can probably make a difference in corporate behaviour. And then, it is just up to the consumers themselves to shop responsibly. Which takes some effort.
I had a similar reaction. Of course, we would like our citizens to be educated and aware, and not support a company that employs such practices. But, look how many people shop at Wal-Mart. The bottom line is the bottom line. Especially in our current economy, consumers are loathe to pay a premium in order to support ethical labor practices. Its easier to pay less, and ignore what the company is doing.
Also, its hard to compete in this global economy because our workers require more money/benefits. So, many companies are forced to open factories overseas just to compete with the products coming in.
Its hard to answer.
But, I heartily agree that companies should be rewarded for keeping jobs here, instead of receiving tax incentives for moving jobs overseas. I just don't understand that logic - never did.
Maybe there's a Schmolitician who can explain the rationale for encouraging companies to move their operations overseas.
But, the argument that these workers are just happy to work in terrible conditions for two cents a day because they're not as materialistic as we are is baloney.
I think the rationale on outsourcing is that it contributes, in the short- and mid-term, to the overall profitability of American companies, benefits shareholders and equity holders, and, in the long run, allows those companies to re-invest in the American economy with higher-wage jobs. Also, the outsourcing proponents suggest that it reduces friction in the global economy, placing low-skill, low-wage jobs in countries where the population fits that profile, and is accustomed to the standard of living allowed allowed for by those jobs. Over time, as those countries' general economic prosperity increases, demand for American services and products is stimulated and the American economy benefits (as do Americans). Or that's how it's supposed to work.
Well, what you're describing makes sense. I'm not sure that's actually what happens, though. I remember a piece on NPR last year about Dell. They had promised job training to move around employees that would have lost their jobs when some of their operations were moved to India. It didn't happen. And, the wages for the support people in India were less than a quarter for the same position here. I guess the problem there is they were moving higher-wage jobs overseas, not lower paying ones.
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