Case Study:
Sweatshops: Are Companies Willing to Solve the Problem?
Imagine that every day you go to work you are exposed to toxic chemicals without having any protective clothing or safety training, and that the workplace has poor ventilation and poor fire safety. Suppose also that you are subject to physical and verbal abuse at the hands of your employer and that there is a lack of drinking water in the workplace. Suppose further that you are paid only a couple of dollars per day and forced to work excessive overtime hours. Would these be satisfactory working conditions—for anyone, anywhere in the world? Conditions such as these are found in businesses commonly known as sweatshops. Sweatshops exist throughout the world and in a variety of manufacturing industries, including apparel, shoes, toys, and electronics, among others. Sweatshops have become most notoriously famous within the footwear and apparel (or garment) industries. In these two industries, easy portability of work and technology from one region to another, or one country to another, has facilitated the ongoing presence of and reliance on sweatshop factories. For instance, from a historical perspective, apparel manufacturing has been a very mobile industry. It has migrated from Britain to New England in the United States, to the Southeastern U.S., to Mexico and Asia, with companies constantly pursuing less-expensive workers, a practice often referred to as “the race to the bottom.” In this race, clothing wholesalers and retailers have developed a manufacturing supply chain of a large number of contractors and an even larger number of subcontractors, all with the aim of securing the absolutely lowest cost anywhere in the world. Each move in the race to the bottom has been more fl eeting than the preceding one, with an excruciating toll being exacted from the workers at the lowest rungs of the “economic food chain” for the predatory benefi t of others higher up and at the top. Of course, this race to the bottom has not been confi ned to the footwear and apparel businesses. It is occurring in the production of computer motherboards, printers, laptops, and other electronics equipment. It can be found in any type of business that supplies products to large retailers—like WalMart and Target—that operate on the basis of a low-price strategy. “These giants increasingly control the pricing power in overseas manufacturing that in turn dictates how much money factories can spend on improving labor conditions.” Moreover, “[a]nti-sweatshop efforts are fatally undermined by the schizophrenia of the transnational ‘brands’ themselves. The brands’ sourcing department pays ever-diminishing prices for the products (with ever-shortening delivery times) while the same brand’s CSR (corporate social responsibility) department requires compliance with the minimum wage and hours of work limits in the brand’s code and local laws, often combined with other CSR initiatives to be paid for entirely by the contractors. If the contractor doesn’t like this deal, then the brand will find someone else who will meet the order as offered.” Unfortunately, most companies that are “benefiting from sweatshop labor around the world are doing nothing about it.” According to the Investor Responsibility Research Center, just 12% of S&P 500 companies have formal requirements that their suppliers address labor issues and only 4% have requirements that address all the issues—including the freedom to organize bans on child labor, forced labor, and discrimination—considered to be important by the International Labor Organization. “The latest corporate social responsibility (CSR) reports from companies like clothier Gap Inc. and toy-maker Mattel and multi stakeholder organizations like the Fair Labor Association and Workers Rights Consortium all document that sweatshop conditions in every country (including the U.S.) are alive and well.” Given that sweatshop conditions exist around the world, what can be done to counter these assaults upon human dignity and human rights that affect the most vulnerable people in the “economic food chain”? During the past several years a number of avenues of activism against sweatshops have emerged. For example, in the United States, student-led anti-sweatshop demonstrations and protests pressured some 200 colleges and universities into adopting “no-sweat” purchasing policies—especially for clothing emblazoned with the schools’ logos. Ten universities in Canada also have “nosweat” buying policies, as do several U.S. and Canadian cities. The Worker Rights Consortium (WRC) campaigns against sweatshops and helps to police factory compliance with “no-sweat” codes of business conduct. The WRC “does complaint-based and spot monitoring of plants that supply goods to its over 100 member universities.” In 2003, the Fair Labor Association (FLA), whose members include companies such as Adidas-Salomon, Eddie Bauer, Inc., Levi Strauss & Co., Liz Claiborne Inc., Nike, Inc., the Phillips-Van Heusen Corporation, and Reebok International Ltd., as well as about 175 colleges and universities, began publicizing audits of factories regarding possible sweatshop conditions, including labor and human rights violations. These publicized audits put “pressure on Wal-Mart, Disney, Gap, and every other company that does labor monitoring, to release their audits, too.” In May 2004, Gap Inc. issued its fi rst social responsibility report in which it acknowledged that “many of the overseas workers making the retailer’s clothes are mistreated and [the company] vowed to improve shoddy factory conditions by cracking down on unrepentant manufacturers.” Gap uncovered “thousands of violations at 3,009 factories scattered across roughly 50 countries,” including unacceptably low pay, psychological coercion and/or verbal abuse, lack of compliance with local laws, workweeks in excess of 60 hours, poor ventilation, and machinery lacking operational safety devices. Gap CEO Paul Presser says, “We feel strongly that commerce and social responsibility don’t have to be at odds.” These are some of the more notable efforts that have been undertaken to combat sweatshop conditions around the world. They have met with varying degrees of success. Ultimately, however, true success only will be found in putting the brakes on the “race to the bottom,” and in establishing an acceptable minimum level of conditions and compensation for workers on the lowest rungs of the “economic food chain”—acceptable minimums that will ensure them a living wage, protect their rights, and respect their dignity as human beings. Currently, three major groups oversee factory inspections to monitor sweatshop conditions. These are Social Accountability International (SAI), with members including Toys “R” Us and Otto Versand, the German direct-mail giant; the Fair Labor Association (FLA), which was established by footwear and apparel makers such as Nike, Reebok International, and Liz Claiborne; and the Ethical Trading Initiative (ETI), a London-based organization composed of European unions, companies, and nonprofi ts. All three groups have codes of conduct that specify standards and also oversee factory monitoring targeted toward enforcing their codes and remedying violations of the standards. Due to considerable variation in the methodologies used by SAI, FLA, and ETI, many companies have engaged in some form of self-monitoring. For instance, “Wal-Mart says it inspects thousands of supplier factories each year in dozens of countries. But since no outside body such as SAI or the FLA is involved and Wal-Mart won’t release its audits or even its factories’ names, the public is left to take the company’s word for it.” However, the perceived confusion among the methodologies of SAI, FLA, and ETI appears to be on the verge of changing as a consequence of an ambitious 30-month experiment, called the Initiative on Corporate Accountability & Workers’ Rights that is being sponsored by six anti-sweatshop activist groups and eight global apparel makers. This initiative seeks “to devise a single set of labor standards with a common factory-inspection system that will ‘replace today’s overlapping hodgepodge of approaches with something that’s easier and cheaper to use—and that might gain traction with more companies.’ If it works, the 30-month experiment would create the fi rst commonly accepted global labor standards—and a way to live up to them.” “This 30-month experiment is a great fi rst step in bringing order to the piecemeal manner in which even the biggest companies set and monitor workplace conditions across the developing world. But a much broader solution is required to make real progress against sweatshop conditions. There are currently only about 100 large, mostly Western companies actively involved in the anti-sweatshop movement. Their efforts over the past decade are laudable but ultimately insuffi cient because thousands of other manufacturers don’t participate. Building consensus around basic universal standards for particular industries, say apparel or consumer electronics, is crucial. Otherwise, why should one manufacturer incur the cost of upgrading and continually monitoring its workplace standards if it has to compete with factories without the same obligations?”
Q1. Why are sweatshops so common around the world?
Q2. Why are sweatshops viewed with disgust and abhorrence? Does a sweatshop accomplish anything positive?
Q3. What is a reasonable objective (or set of objectives) for addressing sweatshop conditions throughout the world? Explain your answer.
Q4. What is your assessment of the potential of the Initiative on Corporate Accountability & Workers’ Rights for making significant progress in alleviating sweatshops around the globe?
Your answer must be typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format and also include references.