The Problem of Sweatshops - A Necessary Evil - Assignment Example

Edmund Budiono The Problem of Sweatshops: a necessary evil? Introduction: Definitions and Origins of Sweatshops Sweatshops have been operatingsince the early 1880s when the “Spanish conquerors put the native population of the South American continent to work in sweatshop conditions in the manufacture of cloth, rough garments, and assorted textile goods.” (“Sweatshops”1). By the early 1900s, sweatshops had spread throughout the United States. They are business operations which usually have three distinguishing features: “long hours, low pay and unsafe or unhealthy working conditions” (“Sweatshops”1). The United States General Accounting Office defined sweatshops in 1994 as “a workplace that violates more than one federal or state labor law governing minimum wage and overtime, child labor, industrial homework, occupational safety and health, workers compensation, or industry regulation” (Wilson 1). A very famous and terrible incident known as the Triangle Waist Company accident, resulted in the deaths of 146 workers in which most of whom were young women. There were plenty of laws and regulations in place at that time which were designed to protect the workers from risks to their health and safety, but when the whole facts of the matter were examined, it was found that “in reality, no one – contractors or city authorities – paid meaningful attention to laws against overcrowding” (Von Drehle 47). Since this terrible fire, there have been many more such incidents, and new sweatshops are being created all the time. Despite the large amount of negative publicity that sweatshops have brought, they have not been abolished to this day. The attractiveness of sweatshops has spread to other countries, particularly in developing countries such as Indonesia, India, China, and Vietnam because low wages and low labor enforcement laws attract American corporations to exploit this “loophole.” The truth is, that the world’s economy encourages the development of industries in regions where a desirable commodity is plentiful. In some countries there is a valuable natural resource like oil, or minerals, and in others there is good land for agriculture. The one thing that many poor countries have in abundance is labor. Countries like India and China which have huge populations are therefore attractive places for inward investment by companies who want to keep their wage costs low. Some kinds of manufacturing, like the clothing and toy industry, requires a great many workers to finish the goods with hand work like sewing and painting. In China there is also much less regulation in terms of building regulations, and sourcing of raw materials. This is because China has a policy to expand its industrial base and modernize its economy to compete in the world. It is only natural that such a country will exploit its main advantage of cheap and plentiful labor in this early expansion phase. Labor regulation is expensive, and Chinese factories want to continue being the most cost-effective places to produce mass products for the global market. They are only following the same path that more developed nations already had to follow many decades before. The Role of Sweatshops in a Developing Economy Generally, people have been deceived by the idea that sweatshops were made as a way to exploit labor. However, they often forget that sweatshops have actually provided job opportunities, capital investment, and economic growth for developing countries. Stereotypically, we believe by the definition that sweatshop factories usually pay low wages, have poor working conditions, and require long deadly hours. On the contrary, although this is partially true, what’s more important is that sweatshops still provide job opportunities and pay minimum wages according to the country’s law. Oftentimes, American corporations are put to blame for exploiting this field, but our focus should be upon enforcing international labor regulation. For example, Apple, Nike, Gap, Wal-Mart, and GE are famously known for promoting sweatshops and exploiting workers in China and Indonesia. However, it is not because these giant companies are incapable of enforcing strong regulations for their labors, but because China and Indonesia prefer not to enforce laws in order to attract multinational corporations to boost their employment rate. Rather than enforcing strong labor protection laws, both countries are more inclined to use their comparative advantage and compete with one another in order to attract international investors. Whenever there is a big difference in the cost of labor, there are likely to be sweatshops in the cheapest place. Capitalism drives prices down, and this is where the bottom of the pile is reached. Emerging Movements to Abolish Sweatshops across the World Since the 1990s there has been a growing awareness of the existence of sweatshops across the world, and many organizations have begun to take an interest in them from the point of view of human rights. Part of the reason for this is the sudden opening up of China to the world, and the number of studies that were conducted on new multinational business ventures arising in that context. The International Labor Office, for example, has produced several studies reporting serious workplace abuse and violations of workers’ rights throughout the world, especially in the garments industry (Pollin et al. 2). One such study made a comparison of factories in China, El Salvador, Mexico, Pakistan, South Korea, Thailand and the United States, in an attempt to discover the conditions under which products that are sold and used in the United States are made in these other countries (O’Rourke). This research highlighted the inconsistency in the way such data are gathered by various unofficial and semi-official bodies, citing problems in many areas of data collection, and the different perceptions of public and private organizations which have become involved. It was itself funded by the U.S. government and conducted by U.S. university staff, which in itself raises issues about who decides what is acceptable and what lies behind such judgments. Much of the criticism of sweatshops comes from Western industrial or post-industrial states which find it difficult to compete on the international labor markets because of relatively high wage costs. They have an interest in criticizing the much more cost-effective factories in developing countries, and though they may have a very vital and important contribution to make, it must not be forgotten that their perspective may be very different from that of the developing countries and the workers themselves whose lives are studied in such research. This problem of differing contexts and differing expectations is one which makes the subject of sweatshops a very sensitive one. The Negative Aspects of Sweatshops In the late 1990s and from the start of the new millennium, there have been a number of protests against global capitalism, and the greed of huge multinational companies which put their profits first and forget about their responsibility for workers and for the natural world in which they build their factories. It is true that many factories employ young people and run a shift system that has longer hours than in Western countries. There is also a problem with factories sub-contracting work to other managers, and some work being given out to workers for completion in their own homes. Often conditions here are very bad, with people having to work extremely long hours in poor conditions just to obtain a very tiny wage (Featherstone and Henwood 1). In recent times some industries outside the usual garment production line have been accused of running sweatshops, for example, the IT and call center trade in India. Reports suggest that workers are suffering health problems and relationship strains because of the long hours and the shift work which is designed to fit in with the distant time zones of the United States (Joseph 1). Social and Economic Advantages of Sweatshops It is important to consider the rights and wishes of workers in the issue of sweatshops. Often the application of Western standards reduces the money available to workers and increases the number of years they need to work in order to save for important purposes like getting married or going to college. Many sweatshop workers willingly put up with poor conditions as the first step into a better life. They do not spend their whole lives in the same factory but start at the bottom and work up to better and better jobs. This is a natural economic phenomenon, and it can be disrupted with inappropriate rules being imposed from outside the local environment. If you ask the workers what they want, they will usually say that they desperately need those bottom rung jobs so that they can earn at least something in an economy which otherwise has almost no jobs. Sweatshops are an imperfect but essential part of the economic landscape in these poorer countries, and without them there would be much greater distress as people would not be able to feed their families and educate their children without the income of some family members who work in sweatshops. The exploitation of workers and the ruining of land is a problem that is not only caused by multinational companies, but they would not be able to carry on with their strategies if people did not buy their products. Students have begun to protest against certain brands such as Walmart, or Nike, or Adidas because they have heard about child labor and abuse of workers. The truth is, however, that the presence of such big names in countries such as Vietnam and Indonesia actually raises the standard of local wages and factory conditions – the locally run companies are often much worse (Featherstone and Henwood 1). This point is also made by Galpin who notes in the case of Indonesian workers employed and making goods for multinational companies that there is very little else that the people can do to make a living, and he quotes a local economist as saying : “The first priority is stable income for the workers. Indonesia is a very poor country, it is in a crisis. There are millions of people without jobs” (Galpin 1). A bad job is better than no job, and this is the argument for sweatshops. Discussion: Risks and Benefits of Sweatshops in the Global Marketplace Opinions may differ on the paradigm of sweatshops, but sweatshops are proven to be a strong indicator of developing countries’ economic growth. Although sweatshops may be economically viable, working in poor conditions with little benefits does not seem philanthropic. However, economists often argue that in every decision, there is a trade-off and opportunity cost, where in this context this refers to sacrificing potentially higher skilled jobs for low skilled labor in order to accumulate wealth. Part of the problem with the image of sweatshops is that people who do not understand the economics of the situation are tempted to apply Western standards and wage levels in a very different situation of developing countries. Allegations were made against the huge technology company Apple, for example, accusing them of using child labor and exploiting workers who were making their iPod machines. It turned out, however, that when the matter was properly investigated, all that was found was some extra overtime that was voluntary, and no child labor (Associated Press 1). As a result of this accusation, Apple has become worried about its reputation and it has hired researchers to monitor its factories. This introduces layers of interference into the businesses of the third world which would not be tolerated in the West. No-one checked the procedures in European and American factories at the beginning of their industrial revolution, and they developed their own systems for fixing this problem according to the rules and standards that were acceptable in each country. Chan makes the comment that the current position in Guangdong, Southern China, is like Manchester in Victorian times, where business is booming and the industrial sector is expanding very fast and pulling people out of the countryside and into the cities to find work (Chan 1). There is even evidence that factories are able to avoid detection when they break the rules, and so occasional monitoring by outside companies is a waste of time (Bernstein 1). Pollin et al. (2002) analyze the production costs and sales price of garments made in Mexico and sold in the United States, and argue that raising wages even by 100% in Mexico would have only a very small effect on the final cost of garments at point of sale. This shows that there is potential to gradually improve wage rates in sweatshops until they become properly and well regulated businesses that can stand comparison with other kinds of organization. It just takes some time for them to become established and change the local economy. In the words of Cheryl Grey: “It’s an ugly path, dirty and brutal. But it’s proven to work. Can the same be said for other forms of foreign aid?” (Grey 1). Sweatshops are, unfortunately, a necessary stage which has to exist before a country is rich enough to industrialize with proper regulation and wage packages for workers. Other countries have followed this path, and it is a better alternative for the people than to have no work at all and to rely on foreign aid, which only makes the situation worse in the long term as people lack the skills to get themselves out of poverty. The best way forward, then, to ensure that people in developing countries have work that is at least safe, even if it involves long hours and poor conditions, for a rather low wage, is to enlist the help of their overseas customers since they are so evidently concerned about the conditions for workers (Viederman 1). With international partnership, instead of arguing about sweatshops and trying to close them down, there is some possibility that things can improve. Conclusion: In Defense of Sweatshops, with Some Qualifications There have been various controversies for the continued existence of sweatshops. Generally, they fall into two main categories: those who perceive sweatshops as a form of exploiting labors and societies, and those who view sweatshops as the initial step to achieve economic growth. Many activists, world organizations, and students are against the existence of sweatshops. As we have seen, some economists, usually from developed countries, argue that sweatshops should be removed because they promote poor working conditions, low wages, less breaks, and no safety requirements. On the other hand, economically, sweatshops have provided job opportunities for workers in developing countries and signal potential growth. Local economists in the third world recognize the disadvantages of sweatshops but still recommend that they be allowed to continue because they are the only known way of growing an economy from a very poor base into something that can sustain itself. This is why many economists and even governments are opposed to the idea of abolishing sweatshops. They view sweatshops as one of developing countries’ greatest assets to attract global investments from multinational companies. The idea of “agglomeration economies” or notably known as economies of scale, suggests that successful investment in a poor country could initiate signals for other potential investors, thus creating more investment, job opportunities and long-term economic growth. Sweatshops are here to stay, and they are a lifeline for poorer citizens of the world who would otherwise be homeless and hungry. Observers in rich capitalist countries should not be too quick to judge other countries which are less privileged, and further behind in their path to modernization. The sweatshop phenomenon is a vital first step for people, for companies and for whole countries, and they do, in time, lead to more wealth and better conditions. They must be permitted to start off economic activity in desperately needy areas. There is no other effective mechanism to do this, and that is why they deserve our qualified support. Works Cited Associated Press. "Apple: No Sweatshop IPod Labor." Wired.com. Conde Nast Digital, 18 Aug. 2006. Web. 04 June 2012. Bernstein, Aaron. "Secrets, Lies, and Sweatshops." 27 Nov. 2006. Web. 30 May 2012. Chan, John. “Chinese Capitalism: Industrial Powerhouse or Sweatshop of the World?” 31 Jan. 2003. World Socialist Web Site. Web. 2 June 2012. Featherstone, Liza, and Doug Henwood. “Clothes Encounters: Activists and Economists Clash over Sweatshops.” Lingua Franca March 2001: 26-33. Print. Galpin, Richard. "Spotlight on Indonesian 'Sweat Shops'" BBC News. BBC, 03 July 2002 Web. 2 June 2012. Grey, Cheryl. "Outsourcing: The Good Side of Asian Sweatshops." Citizen Economists. 14 Aug. 2008. Web. 1 June 2012. Joseph, Manu. "IT Sweatshops Breaking Indians." Wired.com. Conde Nast Digital, 7 Nov. 2003. Web. 1 June 2012. 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