Gap Labor Problems

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Major ethical issues:
Gap Inc. is a multinational casual apparel chain retail store with “3000 supplier in 50 different countries”. The manufacturing environment, human right treatment and labour policy vary substantially among suppliers from substandard to appalling. •Gap Inc.’s customer were deceived to assume the products were “Made in USA”, under United States labour standards and human right policies; whilst, manufacturing factories were located in Saipan –a U.S. protectorate in Southeast Asia. Although Saipan conformed to majority of U.S labour laws, it was exempt from federal minimum wage laws. Furthermore, the majority of the manufacturing factories located in Saipan are foreign companies from such countries as china and Thailand. •Workers’ rights have been systematically violated in supplier factories in other localities such as Central America, Thailand, Cambodia, Bangladesh, Indonesia and Mexico. •Workers were misled into entering contracts, advertised as a well-paying job in USA. In fact the jobs were located in Saipan and paid $3 an hour, moreover, the contract required workers to pay a hefty recruiting fee. •Significant human right violation has been committed by suppliers contracted by Gap and other major retailer. Basic human right violation occurred ranging from subjection to sexual harassment, lack of clean water, not being able to use bathrooms and harsh and cruel punishment as a method of discipline. Furthermore, employees were forced into consenting to a contract prohibiting marital arrangements and political or religious activities. •Fair labour policy violation came to light upon the employment of minors to fulltime positions. Additionally, employees failed to pay for overtime. Rampant harassment used as anti-union initiatives. Pregnancy test was required prior to employment. Underage teens have been hired as young as 13 with full time schedule and minimum pay. In one instance a 14 years old girl died of exhaustion after working several 14 hours a day shifts. As a part of their employment contract, employees were forbidden to ask for salary increase, nor participate in union activity or look for alternative jobs. In some instances, workers were given high quota of production and if they failed to meet the demand they wouldn’t receive payment or were forced to perform “volunteer unpaid time”. •Safety was a major issue in the working environment. For instant, teenage workers in China worked in a room that reeked of toxic fumes; some factories had more than a 1000 citations. Dwelling provided for workers was insanitary with exposed electrical wiring. •American union of apparel worker claimed, they weren’t able to compete with these foreign suppliers due to these low cost sweatshops. •Gap denied such accusations by shifting the accountability to the suppliers, and insisting that resolution of worker plight is the responsibility of their employers who employed them and not of Gap. Utilitarianism Perspective

Utilitarianism is a consequence based theory which suggests; those actions are permissible that create the most overall good (utility) for the greatest number of people (audience). Utilitarianism is the greatest advocate of free market and globalization. Free market encourages efficiency in the market, which pave the way to optimal distribution of cost and benefit in a society. Issues arising from unfair labour policies, human right conditions and hazardous working environment provided in the case is argued in such way that society in these underdeveloped –sometime developing- countries would benefit greatly from employment, economic prosperity and increase standard of livings in the long run. Concurrently, multinational companies in societies in which such products are marketed will benefit from lower costs, attaining competitive advantage in the global market. The ripple effects of their competitive advantage will reach their employees, community in which they operate, government and...
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