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Sweatshops: Wage and Labor Conditions Essay

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Global economics operate at an extremely expedient pace. Producing goods and services efficiently and quickly is the focus of thousands of corporations. These corporations are constantly competing to gain an advantage that will increase profits. Opportunities for capital investment and expansion are discovered daily. Unfortunately, many times these massive corporations can be linked to unjust labor practices occurring in developing countries. Companies such as Nike, Microsoft, and Apple have all had to handle claims that their factories or subsidiaries violate various labor laws.

Situations such as these exist across the globe. Basic human rights are violated and vulnerable individuals are thrust into a life style that no person desires. However, are there implicit benefits for all parties involved? Some believe these conditions are necessary for profitable production. Others protest the severe exploitation of individuals from developing countries. Regardless of a particular position, it is crucial that sweatshops be investigated for economic efficiency and moral justification.

The term sweatshop has been in society for many generations.

In actuality it is a term that is hard to define. Often times a sweatshop does not want to be discovered. The factories are not highly publicized or placed in the public eye. The U.S. General Accounting Office defines a sweatshop as “any employer who violates more than one federal or state labor law” (Wiki). However, it is often difficult to measure the magnitude of sweatshops around the world because they do not want to be classified as such. By definition, a sweatshop is a factory or manufacturer that is operating illegally under federal or local labor laws. One problem that arises with this definition is that there are different laws and regulations for different countries.

Enforcement of stricter labor laws may not be plausible in countries that have a larger concentration of sweatshops. These labor violations are often coupled with human rights violations. For example, people can be forced to work 15-hour shifts meticulously constructing various products. They may only be allowed two bathroom breaks and two quick meals. (MIT). The conditions workers are placed in compromise health, welfare, and morale. Economically, many individuals have no recourse to these factory jobs and are thus forced to enter a seemingly endless cycle of exhaustion.

The violation of human rights is the underlying constant that connects sweatshops across the world. Some countries may have different laws pertaining to how long shifts may be or what minimum wage is, but when considering basic humane practices, it does not matter what the country’s specific laws state. Human rights violations are violations regardless of where the sweatshop may be located. It comes as no secret that these labor practices stem from the desire to produce products at the lowest cost. Low costs result in increased profits for corporations around the world. The goal of any business is to increase the bottom line.

Subsequently, as corporations benefit, so do millions of consumers who pay less for luxury items. For example, thousands of technological instruments, such as the iPhone, iPod, and iPad, are assembled in Chinese mega-factories (Balfour). Nike, Adidas, and Reebok are just a few of the leading apparel manufacturers who have factories in Indonesia, Vietnam, and China. Statistics from 2009 reveal that China itself exported $128.5 billion in simply apparel and footwear. The United States alone imported nearly a quarter of these products (USCBC). The individuals who make these products are often unable to purchase the item they assemble day in and day out. Massive assembly lines exist across South East Asia, wherein workers toil at astounding paces.

For example, the Chinese manufacturer Foxconn employs over 900,000 people. In one factory, the workers can produce close to 90 iPads per minute (Balfour). Information such as this causes many to question whether consumer demand takes priority over human livelihood. Certainly labor statistics are hard to acquire from developing countries where local governments look to conceal illegal practices or audit practices are poor. For instance, until recently, Chinese statistics were never included in wage or hourly reports. Fortunately, the Bureau of Labor Statistics included China in a 2006 release that compares international compensation costs. It is important to study these reports because the information is staggering.

For example, the average total compensation for manufacturing workers in China was $0.67 per hour (BLS Report). A San Jose State University study reveals Bangladesh’s hourly wage as a mere $0.13 per hour with nearly 83% of the population living on less than $2 a day (Powell). In addition to these extremely low wage rates, social insurance benefits, such as government taxes, pension, health insurance, and sick leave, are often deducted from a worker’s salary.

Manufacturing workers in China are left with a mere $837 dollars a year (BLS Report). One report highlighted the working conditions and wage rates for individuals in the Nike shoe factories located in Vietnam. It stated that the average hourly rate was a mere $0.20. For a full eight-hour workday they are unable to cover meal expenses, which total 2.10 (Nguyen). These salaries must support the all needs such as housing, food, water, clothing, healthcare, and education. It is not perceivable to live upon these wages alone.

While it is true that all involved benefit from these low costs, many companies can afford to increase wages of sweatshop employees. For example, in a 2006 study by Dollar and Sense magazine, increasing factory worker wages in the Mexican textile industry twofold, only increased the cost of a jacket $1.80 (Breslow). Despite the overwhelming desire to cut costs throughout the supply chain, increases in wages at the bottom can be made without impacting profits. The impact would not be felt at the top on the bottom line because the increases are not that significant in American dollars.

The impact would send shock waves through communities in the poorest countries because the slight increase would go much further. The disparity between American workers and top management is large enough. However, the gap that exists between manufacturing workers and corporate officers is astounding. For instance, one study showed that it would take a Vietnamese factory worker 14,000 years to reach the salary of Nike’s CEO Phil Knight (Breslow). Individuals that run the companies and stress code of conducts must understand that their product is being manufactured unjustly and unfairly. On the contrary, advocates for cheap labor believe a wage increase would only decrease the demand for workers, thus thrusting people back into poverty (MIT).

In response, it is important to remember that a large percentage increase on a minimal hourly wage does not carry the weight of the same percentage change on say American minimum wage. Looking at the previously stated salaries, a 100% increase on Bangladeshi hourly wages would only be $0.26. In reality, many of these sweatshop workers are not receiving a living wage. Minimum wage is hardly a living wage in any country (Barnhart). As with any social struggle, there are proponents for both sides. Individuals who endorse these factories believe that job stability and salaries can move misfortunate people out of poverty.

The most common defense is that “any job is better than no job” (MIT). Unfortunately, across the globe, there are individuals who are so poor that they seek a job in a sweatshop. New York Times columnist Nicholas Kristof recently interviewed a Cambodian teenager who said, “I’d love to get a job in a factory. At least that work is in the shade. Here [the dump] is where it’s hot” (Kristof). For some the benefits of any job outweigh the terrible conditions of a job itself. More importantly, a job is supposed to give an individual an identity. Unfortunately, many of the jobs individuals work resort their livelihood to that of a robot.

A recent article about the Chinese company Foxconn, describes employees as “spend[ing] long hours on the factory floor, working compulsory overtime under regimented conditions, with no opportunity to put psychological distance between the work and off hours” (Ojo). Another major example of exploitation and manipulation can be seen in the Chinese technology manufacturer Foxconn. This massive exporter supplies for Apple, IBM, Cisco, Microsoft, and Sony to name a few. Interestingly, Microsoft again finds itself amidst controversial labor contracting. Foxconn, a manufacturing giant, employs over 300,000 employees at its Longhua factory in Shenzhen. The factory takes on the face of a small city as workers live on site in dormitories.

The compound includes restaurants, shopping malls, and a pool. Despite these commodities, the workload imposed on employees is strenuous and seemingly endless (Balfour). This company made headlines as a string of employee suicides prompted a closer look into the working conditions. In response, wages were increased thirty percent, resulting in $176 per month (Balfour). However, employees interviewed in the Bloomberg Buisnessweek report claim that the factory is too large, management is insolent, and employees are ‘squeezed’ out of rightful earnings” (Balfour). Interestingly enough, Foxconn may be considered one of the more enviable places to manufacture electronics. This is hard to imagine when it is also the factory that had to install nets on the sides of their buildings to prevent disgruntled workers from committing suicide.

Apple is the leading technology company that utilizes this global manufacturing technique. They are not alone however, as companies such as Dell, Hewlett-Packard, Motorola, and Nokia all employ similar strategies abroad. The working conditions in these compounds are constantly coming under scrutiny for violating labor laws and human rights. For example, workers claim they are forced to be on their feet so long that their legs swell and they cannot walk. Employees are exposed to hazardous materials and dangerous situations when creating the newest gadgets for the Western consumer (Duhigg).

Apple claims to work to improve conditions at their supplier factories and impress their code of conduct upon its manufacturers. Despite their efforts and documented change, many people are not buying that Apple actually cares about making a difference. A former management employee at Foxconn said “workers’ welfare has nothing to do with [Apple’s] interest” (Duhigg). Rather the system they have in place produces profit for Apple and they are not concerned with making any changes. According to some sources, the only reason Apple did not make more money last year was because they ran out of product.

The factories that are scattered across China run 24 hours a day with continuous shifts. Young Chinese men and women are forced to live in dormitories, some times as many as twenty people to a three bedroom sized apartment. To add to the suffocating working and living conditions, an employee with a college degree only makes around $22 dollars a day (Barboza). This paycheck includes overtime and is well above the normal wages earned by other individuals who may not be fortunate enough to have a college diploma. The employees live under a constant threat that inept performance will thrust them deeper into poverty. For example, banners drape the factory walls stating, “work hard on the job today or work hard to find a job tomorrow” (Duhigg).

The environment that is created in these technology factories is detrimental to the human psyche and morale. Unsurprisingly, companies look to distance themselves from these contracted manufacturers or subsidiaries. Apple releases statements and produces annual reports that claim to document active changes and improvements in how their suppliers conduct manufacturing. It is sometimes difficult to police the management conduct of major suppliers if there is not a constant watch placed upon the suppliers. When Apple does look to institute change, it is often viewed as a publicity stunt that does not carry the wide reaching effect that is portrayed to the media. Former Apple executives state that the annual audits that are performed return violations of Apple’s code of conduct. However, these violations continue to appear in the next year’s audit.

The threat that Apple will pull its supplier contracts does not carry much weight it seems because the problems remain. Damaging publicity is never coveted by a corporation such as Apple or Nike. For instance, when University of Oregon students protested the school’s lucrative apparel contract with Nike due to suspicion of unjust labor practices, its CEO Phil Knight, pulled $30 million from development projects (Rust). The struggle to produce in countries where low wages are acceptable challenge companies to look at their codes of conduct and see what they are willing to accept. Despite denials, it is clear that major corporations retain some responsibility as to the conditions of their supplier factories. The student protests at Oregon were certainly not the first time there has been public outcry for Nike to improve worker conditions abroad.

As the industry leader for athletic apparel, Nike represents an industry wide problem of worker exploitation. Adidas, New Balance, and Reebok also share headlines with Nike for being violators of providing respectable working conditions and a living wage. The factory conditions for the Vietnamese who produce a great deal of Nike products are far from optimal. These factories are usually stocked with dirt-poor teenage girls from the rice paddies and farmlands. Their shifts can last up to 12 hours and they are only allowed one bathroom break and two drinks for an 8-hour shift. They are ridiculed and humiliated to instill order and discipline. One woman described the experience by saying “They treated us like animals” (Nguyen).

In addition to the disrespect and wage gauging seen in Vietnam, Nike has faced accusations of using child labor to produce products in Pakistan and Indonesia. The laws of these countries state this is illegal, however little is done to combat the problem. What is even more interesting is the fact that the “United States Constitution states that child labor is illegal and inhumane, and any U.S. company found guilty of practicing and encouraging it will be prosecuted (TED).” Children as young as 4 and 5 may be working in Nike factories across Southeast Asia, keeping production costs minimal and therefore driving up the profits Nike sees on the balance sheet. It paints a very disturbing picture of a company that claims to stand for ethical conduct, yet it employs labor practices that are unacceptable by Western standards.

Major corporations cannot continue to turn a blind eye to the situations present in their manufacturer factories. For instance, KYE is a Chinese company that produces products for technology giant Microsoft. In a report conducted by the National Labor Committee, one employee said, “We are like prisoners. It seems like we live only to work. We do not work to live. We do not live a life, only work” (Fleming). The report includes accounts of 90-100 hour workweeks, with many employees being predominately 16-18 year old females. Within this work environment, sexual harassment is rampant and injury is frequent. Alarmingly, any stoppage of the assembly line can result in fines or punishment. Even health absences can get an employee fined.

These punishments are taken from a wage of merely $4.75 per day (Fleming). As accounts strengthened about the illegal conditions, Microsoft issued statements, but failed to ever investigate or audit the actual factories. The cycle can never be broken if companies with the most influence fail to uphold their personal codes of conduct and ensure just working conditions. Some believe that increased wages causes a decline in demand for workers and thus place some people back on the street. Others insist that the blame cannot be placed on the large corporations because they are simply contracting to local communities (MIT).

Others claim that because many of the factories are located in developing countries with low costs of living to begin with, that providing cheap labor is better than not providing anything at all (TED). However, companies have influence on what kind of labor conditions are provided. Without their business, many of the suppliers whom they contract with, would not be able to stay afloat. Companies like Nike and Apple have the power to change the labor environment. Changes need to be made with regards to how investigations are performed. Often times the audits or investigations of labor conditions are conducted with prior knowledge.

Factories are able to clean up their act for a few days and appear compliant (Fleming). The amounts of money companies make provides evidence that they can afford to pay manufacturers fair wages. Many believe it is unfair for a company to hide behind contractual agreements when their codes of conduct are being violated by hired subsidiaries (Balfour). Many organizations and companies have taken concern to the global issue of sweatshop labor. The Fair Labor Association (FLA) was established in 1999 as a non-profit organization focused on improves the working conditions for people around the world. Their mission is to construct industry wide codes of conduct that must be adhered to by all companies.

Penalties will be imposed when violations are discovered through audit or investigation (Wiki). Another organization is the Worker’s Rights Consortium (WRC). This group of individuals is focused on protecting the human rights of people who make apparel that is imported to the United States. This organization stresses that the U.S. must realize how their products are being created and disallow any manufactured items that have not been made in a dignified setting.

They have become prominent at many state universities, as growing support has shown that Americans do not want to purchase products made under unrighteous working and living conditions (WRC). It is difficult to argue against the necessity of these organizations because despite the belief some people have that sweatshops increase welfare, human rights are being violated and conditions must be improved. Mass production is not a crime by itself, however, if working conditions compromise human welfare, changes need to be enacted.

Business globalization is a phenomenon that is here to stay. However, it is important to identify areas where practices, such as outsourcing, violate the lives of human beings. Economically for many, a job in a sweatshop factory is better than no job at all. Unfortunately, the working conditions for millions do not provide the economic ability to advance from poverty. It is a dangerous cycle to become a part of. There is no advancing opportunities despite the fact an individual has a job. Working conditions are unhealthy and demoralizing for massive amounts of people. Wage rates in many developing countries are not high enough to sustain a family. Production of goods and services will continue at high rates despite outcries from small organizations.

Can change come through the efforts of these non-profit organizations or will the drive to earn more money continue to enslave individuals in sweatshops. Statistics paint a picture that must be investigated further in order to respect the rights of millions. Sweatshop labor has persisted within global economics forever. In certain areas today, it is glorified slavery. Millions of Chinese people for instance live on less than $1000 dollars a year. Many are separated from their families and forced to live 12 people in a single dormitory. Individuals sign exploitative contracts that force them to work endless hours with next to nothing pay. The cycle of their life is monotonous, hopeless, and often times dangerous.

As an American, I without a doubt have benefited from these labor practice overseas. It is demoralizing to research this topic because the conditions others are placed in are truly sad. I am hard pressed to believe that companies do not care some responsibility, if not all for the conditions in many of these factories. Although easy to do, it is unacceptable to hide behind the claim that these factories are merely contracted and they do not fall under the code of conduct. Major corporations carry enough influence to change the situations in other countries; they just choose to continually benefit from the higher profits. Americans would prefer to purchase a product, even at a more expensive price, if an individual who makes enough money to feed their family made it.

Change within global economics and global product manufacturing is essential to the protection of human rights. Without change, companies and countries that import products are acknowledging that the rights of another individual are inferior to profit and savings. Companies such as Apple and Nike have the ability to change labor conditions across the globe. They can also place pressure on foreign governments to make sure they enforce local labor laws and practices. For changes to be made in labor conditions, there must be a consolidated effort from governments, consumers and corporations towards improvement.

Bibliography

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Barboza, David, and Charles Duhigg. “In China, Human Costs are Built Into the iPad.” New York Times. Jan 25, 2012. 24 Feb. 2012 <http://www.nytimes.com/ 2012/01/26/business/ieconomy-apples-ipad-and-the-human-

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Sweatshops: Wage and Labor Conditions. (2017, Feb 17). Retrieved from https://studymoose.com/sweatshops-wage-and-labor-conditions-essay

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