BUS 216: Business Ethics
Dr. Scott Browne
November 9th, 2014
An Ethical Debate for Sweatshop Labor
Business ethics seeks to address issues that arise while doing business internationally. Not all states enforce ethical standards for business. Consequently, the global community regards the conditions of workers in certain states, particularly in the developing world, to be in direct violation of human rights. With the emergence of globalization, there are now low transaction and communication costs driven by advances in computer and telecommunication technologies; therefore, making the global market truly global. In the production of shoes, clothing and other commodity goods, business conducted internationally is now more the norm rather than an exception. This emergence has given rise to an issue known as Sweatshop Labor.
The United States General Accounting Office defines a sweatshop as a “workplace that violates more than one federal or state labor law governing minimum wage and overtime, child labor, industrial homework, occupational health and safety, workers’ compensation or industry regulations.” While human rights activists and others have argued that a sweatshop is any workplace where the employees are exploited by not providing them with benefits, acceptable working conditions, or a living wage. A living wage is different from a minimum wage because it covers the costs of basic necessities to survive, which minimum wage does not cover. Both definitions agree that the working conditions within sweatshops should be improved; however, activists and other critics can often overlook the benefits of having a factory in these developing countries.
In today’s highly globalized and competitive economy, top producers of shoes and clothing constantly search for ways to reduce their cost of production and maximize their profits. In order to do so, these multinational corporations place their factories in underdeveloped or developing countries like India and China where there are few legal protections for employees. These countries often disregard worker health and safety, and government taxation on foreign investment is minimal in order to attract business from multinational corporations.
In most circumstances, the practices that take place in the sweatshops are far from humane. Although the managers of sweatshops abide by the local law, sweatshop workers do not receive a living wage, work long and strenuous shifts and are almost never paid overtime. For example, one of the contacted factories of Nike paid their workers as little as $2 per day while living cost was $4 per day. Secondly, workers of sweatshops are frequently exposed to hazardous working conditions. Sweatshops, like the ones used by Nike, are believed to create an environment for the workers that can become potentially dangerous in regards to their health and safety. In 1997, Nike became the subject of a health and safety controversy when information became public that workers in one of Nike’s contracted factories were exposed to highly toxic fumes. In another Nike sweatshop, the workers were humiliated in front of others and were often subjected to debilitating mental and physical abuse including kicking, slapping in the face and name calling. A report published by Global Exchange demonstrated that in some Chinese factories contracted by Nike, workers were not allowed to talk during work, and if they did so, they were fined $1.2 to $3.6. Similarly, Indonesian factories punished worker mistakes by forcing employees to stand in the sun for prolonged periods of time. Eventually, the ethical debate faces a few important questions that arise while addressing the issue of sweatshop labor. Is the treatment and conditions provided for sweatshop workers morally justifiable? And should multinational companies be responsible for the actions of their factories abroad?
There are conflicting opinions in the ethical discussion...
Bibliography: Do Something, (2014). Background on Sweatshops. [online] Available at: https://www.dosomething.org/tipsandtools/background-sweatshops [Accessed 10 Nov. 2014].
Dosomething.org, (2014). 11 Facts About Sweatshops | DoSomething.org | America 's largest organization for youth volunteering opportunities, with 2,700,000 members and counting. [online] Available at: https://www.dosomething.org/facts/11-facts-about-sweatshops [Accessed 10 Nov. 2014].
General Accounting Organization, (2014). www.gao.gov. [online] Available at: http://www.gao.gov/assets/80/77185.pdf [Accessed 10 Nov. 2014].
Kesik, J. (2014). Ethics of Sweatshops: Managing Global Labor Standards in the Sportin…. [online] Slideshare.net. Available at: http://www.slideshare.net/JenniferKesik/ethics-of-sweatshops [Accessed 10 Nov. 2014].
Marcoux, A. (2008). Business Ethics. [online] Stanford.library.usyd.edu.au. Available at: http://stanford.library.usyd.edu.au/entries/ethics-business/ [Accessed 10 Nov. 2014].
Wong, A. and Schorr, B. (2014). Two Faces of Economic Development: The Ethical Controversy Surrounding U.S.-Related Sweatshops in Developing Asian Countries. [online] Globalethicsnetwork.org. Available at: http://www.globalethicsnetwork.org/profiles/blogs/two-faces-of-economic-development-the-ethical-controversy [Accessed 10 Nov. 2014].
Please join StudyMode to read the full document