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To begin, a fundamental fact: Most of what we buy from developing countries is grown or manufactured by workers whose rights are ignored in important ways. Cell-phone components from China, fruit grown in Mexico, and the Indian cotton in your shirt are commonly processed by workers who were not paid minimum wage, who were exposed to hazardous chemicals or dangerous machinery, who were forced to work overtime, or who were prevented from organizing to negotiate changes in such conditions.
From an ethical perspective, the answer seems obvious. But from a business standpoint, we still need to ask: Why should U.S. companies care?
First, avoiding sweatshops is good business. Not only do poorly treated workers typically make poor-quality goods, but U.S. companies that aren’t careful about sweatshops could face the costly job of reputation repair if a watchdog group links their brands to workplace abuses. Furthermore, desirable employees want to work for companies whose values they share, just as consumers want to buy from companies that put values into practice.
Second, respect for human rights leads to social and economic development. Some business advocates say that labor standards raise costs and thus limit the number of jobs that would otherwise be available to poor people. But fair work is a critical underpinning of social stability. Businesses that respect labor rights put more money in the hands of workers, helping them to educate their children, live healthier lives, and eventually, inevitably, buy American brands. Americans in general benefit when U.S. businesses act to enhance the rule of law in China, to be a model for anti-discrimination in the Middle East, to find education for child workers in India—all of which result from efforts to prevent sweatshops.
So the question becomes not if U.S. businesses should clean up their supply chains, but how. From 11 years of social monitoring, our organization knows where and when problems exist—and the companies do, too. The task at hand is investing in solutions, which are complicated but urgent and ultimately good business for everybody. To get there, companies have to measure themselves—and consumers, investors, and advocates have to measure companies—on how they meet this challenge.
By BW.com Staff
The overwhelming majority of Americans are horrified by reports of inhumane conditions in overseas factories. The U.S. itself has a proud tradition of unions and oversight boards that work to prevent such abuses as child labor, denial of overtime pay, exposure to toxic substances, and stiflingly hot working environments. Every day, immigrants cross the border for an opportunity to work hard in return for fairer, better-paying employment than they can find in their homelands.
Nonetheless, even in the U.S., many violations slip past authorities. Remember the controversy about some Wal-Mart (WMT) stores locking in employees—a fire hazard—to make sure they didn’t steal? It’s no secret that illegal aliens, under the threat of deportation or violence, have been forced to toil at agricultural or sweatshop jobs. Just this May, it came to light that a number of families living in the U.S. were forcing immigrants into slavery, making them perform household chores for up to 16 hours a day without pay.
That’s right, slavery on American soil, 144 years after the Emancipation Proclamation. With so many unscrupulous (and some downright evil) employers able to perpetrate injustices in the U.S., how can anyone expect American private enterprise to prevent them in foreign lands thousands of miles away? The Internet, video conferencing, and ease of trade rules notwithstanding, no one’s eyes can see that far.
And the fact is, U.S. corporations are already making a noble effort, with minimum-wage and overtime agreements with overseas companies to which they outsource business. Nike (NKE), for example, recently made headlines with its pledge to crack down on abusive levels of OT at the 700 factories the shoemaker contracts with worldwide. And many other U.S. corporations set guidelines for humane working conditions, and conduct factory inspections.
But the manufacturers, particularly those in China, know how to skirt regulations, whether by keeping multiple sets of books, hiding cramped worked quarters, or contracting consultants to help them pass surprise inspections (see BusinessWeek.com, 11/27/06, "Secrets, Lies, and Sweatshops"). Clearly, the local governments tasked with enforcing labor regulations have fallen down on the job; otherwise, abuses wouldn’t happen.
Overseas factory workers deserve fair treatment 100% of the time. But the revolution must come from within. Corporate America simply cannot take responsibility for injustice taking place in other lands across the seven seas.Opinions and conclusions expressed in the BusinessWeek Debate Room do not necessarily reflect the views of BusinessWeek, BusinessWeek.com, or The McGraw-Hill Companies.
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