...Sweatshops and Third World Living Standards: Are the Jobs Worth the Sweat? Benjamin Powell David Skarbek Independent Institute Working Paper Number 53 September 27, 2004 100 Swan Way, Oakland, CA 94621-1428 • 510-632-1366 • Fax: 510-568-6040 • Email: info@independent.org • http://www.independent.org Sweatshops and Third World Living Standards: Are the Jobs Worth the Sweat? Benjamin Powell and David Skarbek• Department of Economics San Jose State University San Jose, CA 95192-0114 benjamin.powell@sjsu.edu ABSTRACT Many studies have shown that multinational firms pay more than domestic firms in Third World countries. Economists critical of sweatshops have responded that multinational firms’ wage data do not address whether sweatshop jobs are above average because many of these jobs are with domestic subcontractors. In this paper we compare apparel industry wages and the wages of individual firms accused of being sweatshops to measures of the standard of living in Third World economies. We find that most sweatshop jobs provide an above average standard of living for their workers. Benjamin Powell is an Assistant Professor of Economics at San Jose State University and the Director of the Center for the Study of Entrepreneurial Innovation at the Independent Institute. David Skarbek is an economics major at San Jose State University and intern at the Independent Institute. The authors thank Jeffery Hummel, Charles Murray, Larry Pratt and Edward Stringham for helpful comments...
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...In this essay, I will argue that sweatshops are not immoral because they create employment opportunities and help to enhance the economy of a country. Further, I will show that the strongest objection to this claim, namely that sweatshops exploit workers fails. Although sweatshops are often criticized for the poor working environment and low-wages they offer, I strongly believe sweatshops positively influence the poor and thus; they must not be abandoned. The anti-sweatshop supporters strongly oppose the idea of promoting and running sweatshops around the world, however, the advantages of sweatshops must not be disregarded. To begin with, both workers and employers of sweatshops share a mutual beneficial relationship. Sweatshops allow corporations,...
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...Introduction Working conditions vary all over the world. Some countries have strict rules on the conditions that people can work in and other countries have limited to no rules on the working conditions of people. The difference in working conditions has caused people to form groups to make standards for every country. These groups are fighting against sweatshops and fighting for labor right on behaves of the poor. A couple of the larger groups are, The Institute for Global Labour and Human Rights, The International Labor Rights Forum formally non-as the National Labor Committee. While there are people fighting against sweatshops, there are also people fighting for sweatshops and educating people on the impact that they have in the communities and in the countries. So what is a sweatshop? According to Global Exchange (2015) sweatshops can defined in many different ways: “The US Department of Labor, a sweatshop is any factory that violates more than one of the fundamental US labor laws, which include paying a minimum wage and keeping a time card, paying overtime, and paying on time. The Union of Needle trades Industrial and Textile Employees (UNITE), the US garment workers union, says any factory that does not respect workers’ right to organize an independent union is a sweatshop. Global Exchange and other corporate accountability groups in the anti-sweatshop movement would add to this definition any factory that does not pay its workers a living wage—that is, a wage that can support...
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...that span multiple countries, influenced people in many aspects. If you go to a supermarket and able to buy French wines African coffee beans as well as Germany sausages, you are enjoying the convenience of globalization. According to Reem Heakal who wrote What Is International Trade?, he said “International trade allows us to expand our markets for both goods and services that otherwise may not have been available to us. It is the reason why you can pick between a Japanese, German or American car. As a result of international trade, the market contains greater competition and therefore more competitive prices, which brings a cheaper product home to the consumer.” As it does more than this, the economic globalization largely benefits the world wide poverty reduction. The first reason that globalization helps reduce poverty is based on one of the most essential economics concept-comparative advantage. Basically it means when countries are trading with others, they are allowed to specialize in the areas they good at and therefore allocate the resources more efficiently which will result in more benefits for every party involved in trades. Take China and United States as an example, given that china has relatively low cost of labor and the US is more sophisticated at advanced technology, it is natural or beneficial for Apple company to choose design and programming the Iphone in US however let Foxconn, a Chinese electronics contract manufacturing company, to produce it. And when China...
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...work done) - Sweatshops are good for third world countries because they provide better wages and working conditions than the alternatives (e.g. prostitution) -Sweatshops are creating jobs for people in developing countries allowing them to have discretionary income - sweatshops are a major source of capital accumulation in a country. -Countries with sweat shops save on cost in production and so have increased capital investments by other countries and trade ports increases which lead to economic success -decrease in unemployment rate in the country that the sweatshops are located BAD -sweat shops create monopolies as small businesses can’t enter due to cost (they can’t get cheaper labour) -sweatshops often don’t pay tax and thus don’t pay for the public services they use for production and distribution and don’t contribute to the country’s revenue. SOCIALLY GOOD - They creates jobs for the unskilled people and people who unable to go to school not wasting mental capital, eliminating unemployment and income being generated. Some communities encourage people to work in a sweatshop. - Sweatshops are good because the clothes you and I are wearing today are made in a sweatshop so without them we wouldn't be clothed and made with good skill. - keep girls away from prostitution and therefore a decrease in the spread of stds and hiv -Living standards are better than what they could have been without sweatshop jobs BAD - sweatshop workers work in...
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...Business Ethics-Nike’s Sweatshops Ann T. Dale MGT/216 Global Business Ethics-Nike’s Sweatshops Nike is a worldwide sports name in wear and equipment. So, why is Nike’s ethics in question? Has greed and publicity become their motto at any costs? Nike spends multimillion dollars a year hiring well-known athletes to advertise their products yet cannot seem to stay out of the media’s eye of their contracting or subcontracting techniques of their products to be built in third world countries. In 1996, Nike has been charged by critics with engaging in a variety of unethical employment practices in countries that exercise little or no control over the conditions of labor or whose governments are corrupt and can be bought off (De George, 2006, chap. 20). In dealing with business issues, a company needs to be aware (what are the issues), articulate (justify and express decisions), and application (reach a decision, train and explain ethics to employees). Ethical behavior has to start at the top of a company and work its way down. Here we will compare ethical perceptions across cultures about the ethical situation, discuss the ethical issues that became evident due to globalization, and discuss the risks and consequences associated with the Nike ethical dilemma. Compare Ethical Perceptions Across Cultures About the Ethical Situation Trevino and Nelson (2007) defines business best stating the “definition of ethics—the principles, norms, and standards of conduct governing an...
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...McKenzie Napier English 101 September 8, 2016 Ravisanker begins his essay by stating that college students urge themselves to find the cheapest prices and how hectic black Friday is due to their huge cuts in prices. The problem he identifies is that these cheap products are made by people in sweatshops which are workplaces where, they’re is poor ventilation, and intense heat and many more terrible working conditions. Sweatshop worker’s worker for an extremely low pay rate and work from seventy to eighty hours a week to make these cheap products that everyone loves. He assumes his readers don’t fully understand what sweatshop workers have to go through. His purpose in this essay is to inform the readers of the injustice of sweatshop oppression,...
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...1. Assume that you are executive of a large U.S. multinational cooperation planning to open a new manufacturing plants in China and India to save on labor cost. What factors should you consider when making your decision? Is labor outsourcing to developing countries a legitimate business strategy that can be handled without risk of running into a sweatshop scandal? As an executive of a large U.S. multinational corporation planning to open a new manufacturing plants in China and India to save on labor cost. There are a few factors that must consider when making the decision. The factors are including the environment business of the both country. First factor that must be consider is regulations and laws of the country. It is a very important thing that the producer must care when planning to open a new business in a foreign country. It is because the business cannot against the regulations of the country that can be affect the business such as the company must close their business in the country. The regulations and laws that the producers must be mention such as minimum wage laws, labor laws, safety and sanitation requirement, and trade union organizing provision. This regulations and laws is made because the country have to protect their labor right. Second factors that the producers must consider to come in the foreign country is the culture of the country. It factor is important for producer to make their business suitable and acceptable by the country. It is because...
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...Wrongful Beneficence: Exploitation and Third World Sweatshops Chris Meyers Much of the merchandise produced by U.S. companies and sold to U.S. consumers is manufactured by workers in third world countries who earn as little as 12 cents per hour drudging away in harsh and even dangerous work environments. Such workplaces are referred to as sweatshops and are especially common in the apparel and shoe industries and in toy making. Many critics object to sweatshops on the grounds that they harm the workers or violate basic human rights. These moral objections are aimed at certain sweatshop practices such as coercion, unsafe working conditions, deception, paying workers less than promised, etc. These practices are not seriously defended by many people, if any. But the “sweatshop” label can still apply to jobs that do not involve any of these more obvious moral atrocities. A difficult job with long hours that pays very little may still be referred to as a sweatshop job and, I will argue, may still be morally objectionable. The question I want to consider is whether it is morally justifiable to pay the very low sweatshop wages for the very arduous sweatshop labor even if there is no coercion, deception, or direct causing of harm. Some defenders of capitalism and supporters of free-market economics have defended sweatshop wages on the grounds that they benefit the desperately poor workers of these impoverished countries who are very glad to get the work. In an important and widely reprinted...
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...2003, Gap Inc. was sued for its usage of child labor and sweatshop factories in its subsidiary in Saipan. The decision to use child labor and sweatshop in Saipan was made by the management of Gap Inc. that could either be seen as egoism or utilitarianism (Smith, 2004). On one hand, on the egoism perspective, Gap Inc. could have decided to use child and sweatshop labor to cut its costs and maximize its profits. On the other hand, on the utilitarianism perspective, Gap’s decision to use child and sweatshop labor, cruel and ethical as it might seem, provided the people in Saipan a source of employment and income. As a poor, third world country, Saipan could not create enough jobs to sustain the livelihood of all its citizens, so it the citizens could choose between starving to death and making a difficult living in Gap’s sweatshops, the sweatshop is apparently a better option. Hence from the utilitarianism approach, Gap’s unethical behavior was actually better than its doing nothing at all. However, this decision gave Gap an international lawsuit over ethical treatment of labor, which does not cost Gap considerable fortune and energy, but also severely harmed its international reputation as an ethical player in the apparel industry (Smith, 2004). It turned out that the public citizens and the media prefer to use the Kantianism when viewing a corporate ethical issue (Iwanow and McEachem, 2005). After this Saipan sweatshop incident, the stakeholders of Gap Inc. placed huge pressure...
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...Yen Ngo Tafara Dube Julia Morena ! ! ! Kira Gottlieb Business Communications: Disney Report ! Table of Contents ! 1. Introduction.....................................................................................................................................2 2. Market analysis...............................................................................................................................3 3. Product analysis..............................................................................................................................5 4. Problem: Ethical issues regarding the working conditions.............................................................6 5. The Chinese Government..............................................................................................................10 6. Proposal using SWOT analysis......................................................................................................10 7. Stakeholder Analysis.....................................................................................................................12 7.1. Supply Chain..........................................................................................................................12 7.2. Return on Investment.............................................................................................................12 7.3. Employees.................................................................
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...JUST DO IT RIGHT MGMT591 December 15, 2013 Introduction I am a track and field athlete that markets for Nike. They are my sponsor. Nike Inc. produces footwear, clothing, equipment and accessory products for the sports and athletic market. It is the largest seller of sports garments in the world. It sells to approximately 19,000 retail accounts in the US, and then in approximately 140 countries around the world. Just about all of its products are manufactured by independent contractors with footwear products in particular being manufactured in developing countries. Nike developed a strong working relationship with Japanese shoe manufacturers, but Nike moved on to other countries seeking after alternative, lower-cost producers. Today the company manufactures in China, Taiwan, Korea, Pakistan, Vietnam, Indonesia, and Mexico as well as in the US and in Italy. Nike has around 700 contract factories, within which around 20% of the workers are creating Nike products. Conditions for these workers have been a source of heated debate, with allegations made by campaigns of poor conditions, with commonplace harassment and abuse. As its founder and Chief Executive Officer, Phil Knight lamented in a May 1998 speech to the National Press Club, “the Nike product has become synonymous with slave wages, forced overtime, and arbitrary abuse.”(HBS Case # 9-700-047) “Hitting the Wall: Nike and International Labor Practices,” HBS Case # 9-700-047 Problem Statement ...
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...Adam Michel Professor Kofler English 1120 7 March 2015 Social Injustice: Sweatshops If an unfair conflict was developing right in front of you, would you go out of your way to do something to stop it? What if it would be to your benefit to stay uninvolved? Many people would say yes, but would they believe strongly enough to continue to fight for what is right? In the mid 1990’s and early 2000’s, several warehouse abuse scandals tainted the reputation of large companies such as Shell, Wal-Mart, and Nike. Cases of employee abuse in factories and sweatshops in Asia and Africa have raised awareness of human rights violations and have inspired people all around the world to continue to fight together to end human rights violations. One case of human rights violations occurred at a Shell oil facility in Nigeria. “Shell is different from other oil companies because it stations its facilities in Nigeria, rather than in the United States, where the company was founded” (Kaeb, 324). By doing this, the company has a higher risk of human rights violation incidents because the distance makes it much harder to monitor what goes on in Nigerian factories and refineries. When the American public gained knowledge of employee abuse in Shell facilities in Nigeria, Shell responded saying that employee abuse is not simply an issue of cruelty within the company, but rather “within a nexus of corruption, poverty, poor public services and infrastructure, government instability, and other factors...
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...Globalization and our Responsibilities Vanessa Strachan Saint Leo University Globalization and our Responsibilities Globalization Globalization is the integration of the world’s economies; it helps to increase productivity, which can raise the standard of living. It is driven by technology advancements in communications and transportation and motivated by the desire for free markets. “Globalization can be technological (the Internet), economic (trade, pro- duction), cultural (television). Globalization can also foster international solidarity. But the dominant view is that globalization means increased commercial relations between people of different countries” (Unknown, 2009). Globalization is the opportunity for developing countries to tap into the world’s economy, which will allow the opportunity to sell many goods to as many people around the world. Globalization includes markets and production. “Globalization of markets refers to the merging of historically distinct and separate national markets into one huge global marketplace and the globalization of production refers to sourcing goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production (such as labor, energy, land and capital)” (Hill, 2011). Globalization is an opportunity for big corporations as well as for small businesses; it is the movement of jobs, goods, finances, and investments. With the advancement of technology...
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... promoting freedom and choice, but these same people leave out the obvious facts that show how this company exploits third world countries by using cheap labor. II. History of Nike Inc. A. Founders B. Co-founding business 2 C. Business Success 3 III. Anti-Nike A. Cheap labor 4 B. Definition of sweatshops 5 C. Locations of sweatshops 6 D. Working conditions 7-8 IV. Nike Defended A. Ruined reputation 9-11 B. Target of organizational protests 12-13 C. Significant progress 14 V. Conclusion 15 1 We all know the slogan, "Just Do It," that Nike developed to sell its products. But just do what? Nike is a company-- young and yet mature--developed and respected by popular athletes both past and present, whose icon remains a "swoosh" printed both large and small on many different forms of apparel. The "swoosh" constitutes a dream of being the best because it is associated with the best. Steve Prefontaine, Michael Jordan, and Tiger Woods are all icons that helped Nike promote its excellence by all three being exceedingly successful in their respective sports ("Our History" ½). Many people can prove that Nike is a company that continues to push the boundaries of design and performance, promoting freedom and choice, but these same people leave out the obvious facts that show how this company exploits third world countries by using cheap labor. It is necessary to raise that awareness so we can be responsible consumers and remember the...
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