Welcome to the Theology and Economics students at Divine Savior Holy Angels High School in Milwaukee, Wisconsin! DSHA was founded in 1970 by the Sisters of Charity of the Blessed Virgin Mary and the Sisters of the Divine Savior. The school’s mission is to prepare young women “intellectually, spiritually, and personally” so I think it’s fitting that we tackle a question that deals with both economic issues as well as questions concerning the dignity of the human person. Thanks to Ellen Bartel, president of DSHA as well as Heather Mansfield, academic dean, for agreeing to participate in the forum. Thank you also to Chris Wiess and Judie Gillespie for donating you and your students’ time to this discussion.
So, a little context and some links to documents we’ll be using for this discussion. The ethics and economics of sweatshops has been a topic of debate ever since they first appeared. Today the discussion continues not only about the existence of sweatshops but what individuals should do when faced with the option of purchasing items produced in these factories. More important than whether or not to purchase merchandise is the issue of the working conditions and wages of poeple who are employed at sweatshops. I have attached a few documents to both give you a history of sweatshops and also provide a sample of the debates. We’ll be looking at the issue through both economic and theological lenses.
The question for the May discussion is:
Are sweatshop wages just and efficient?
The documents we’ll be using are a short history provided by Wikipedia, a definition of just wages from The Compendium of the Social Doctrine of the Church, agruments against sweatshops found on the Green America website, and two excerpts from “Sweatshops-Choice and Exploitation” and “Sweatshops – Definition, History and Morality” by Dr. Matt Zwolinski of the University of San Diego.
In addition, we have a PowerPoint presentation you can view which was authored by James Gwartney and Joseph Connors demonstrating the income levels of individuals in developing countries from 1980 to 2005. While this is not directly linked to sweatshops, it can help to give us the big picture of what’s happening in the economies of developing countries where sweatshops are usually present.
There is no right or wrong answer to this question, and in fact experts are still debating this issue, so responses in both the affirmative and negative with supporting reasoning are welcome. Thank you in advance for your responses! Stephen Haessler and I will be answering all of your comments. We look forward to hearing what you think.
Sweatshop wages are neither just nor efficient according to both Nader and Friedman: Nader states that businesses have social responsibility and Friedman stresses that businesses must engage in open, free competition without deception or fraud. Sweatshops go against both of their arguments, and therefore sweatshops are not even justifiable in the business world despite the fact these businesses are maximizing profits. They could easily pay worker’s wages if they balanced their money better, which is to say justly. When even the staunchest capitalist’s views are breached, evidently there is something wrong about what is transpiring here. Businesses retain the ability to pay their workers – there is no need to keep lowering their prices, but they are becoming greedy to the point where CEOs are earning more than an excess amount of money while others suffer.
Businesses that use sweatshops are able to have such low prices because their total costs are low: wages for laborers are practically non-existent. Many people argue that to them, having these jobs are better than nothing, but these companies use them to the point of enslavement, where these people owe them money without any hope of paying them back. The use of child labor, though, is crossing the line because children most of all should not be exposed to such harsh conditions – to begin using children in your industry to generate more profits that basically benefit higher status people is sick. They are all being taken advantage of when businesses could easily pay them much more than they are now while still making a profit. No one person needs to make 25.1 million a year when there are a thousand-fold people starving.
Thank you Kristen for your comment. Your viewpoint that sweatshop wages are not efficient or just is supported with reason. In reviewing the Church statement on just wages, it says the mere voluntary agreement between employer and employee is not sufficient to make a wage just. But I think voluntary agreement between the parties is a necessary part of a just wage. Involuntary wage “agreements” conjure images of slavery, prison work, and servitude. So, while voluntary agreement may not be enough in itself to define a just wage, I think such agreement is necessary to distinguish just from clearly unjust wages. Would you agree so far? Prof. Zwolinski’s paper stresses the importance of not depriving sweatshop workers of a more attractive alternative. Sweatshop conditions may be horrible, but as Prof. Krugman, a liberal economist, argues, sweatshop jobs beat the even more dreadful alternative of crushing rural poverty. One more question, to which I do not know the answer, but I’d like to search for one. The Church’s statement mentions the just wage must be above subsistence to qualify as just. In general, do sweatshop wage levels meet this requirement?
The progress of globalization and its constant growth in the modern world has promoted the existence and endurance of sweatshops as a consequence of the common practice of outsourcing, and most commonly offshoring, a company’s labor. Although this practice of offshoring is an acceptable right for producers under a free enterprise system, the development of sweatshops that seems so frequently to accompany it serves as an issue of significance since the ethics of such institutions are most commonly in great need of reform. Specifically, that lack of ethical practice involves the issuing of wages within these sweatshops. Many argue that the issuing of highly low wages falls within the fair practices of a corporation. Mainly, this belief stems from the Friedman view of ethical and social responsibility in which a producer is really only restricted from outright lying to the public about its product and using government intervention to undermine competition. Although there is nothing wrong with this point of view, it does not hold a corporation responsible for the way in which the product is produced and therefore, leaves wide open the possibility of worker exploitation. Therefore, even though the use of sweatshops is justified by the fact that their existence promotes the main objective of a corporation by making profits, with the additional benefit of providing jobs, as a Catholic, I can not help but to consider the chance of negligence that such a focus permits. I believe that a focus on profits alone can cause a corporation to forget its responsibilities to promote a system of labor that is just and does not pay workers a wage that is extremely unsatisfactory merely because they can do so without complaint from the workers. Thus, although sweatshops may allow for corporations to earn more profit, which I cannot object to, the fact that sweatshops also exploit workers by paying them minimal wages simply because there exists such a shortage and desire for work in many developing nations that workers agree to a wage of any amount, fights against my sense of workers’ rights within Catholic social teaching. In other words, I believe that although sweatshop wages may be efficient for the gains of corporations, they are quite often far from completely just.
Thank you very much, Natalie, for this nuanced comment. The last part in particularly indicates a thoughtful and informed conscience. If I’ve read your comment correctly, you answer that sweatshops wages may be efficient in an economic sense, but basically unjust in the moral realm. In looking at the Compendium quote that Tiara Zarcone provided us with in the post, it stipulates that even voluntarily agreed upon wage contracts are unjust if they are below subsistence. This makes me wonder what subsistence is. I think the Church is wise not to specify what subsistence wages are; doing so might confuse the moral concern with arbitary numbers and limits. But let me share a thought experiment and you tell me if there’s anything missing in it. One measure of global poverty is the number of people in a country living on one dollar or less per day. If we arbitrarily take this amount to be subsistence and then compare it to prevailing wages in sweatshops in that same country, we have one indication of the justness of that sweatshop wage. If, say, sweatshop employees received two dollars per day, or even $1.10, though pretty low by United States monetary standards, there is a case it seems to me that the local sweatshop wage is just in that country. I would like to know if this imaginary comparison holds up with real examples of prevailing sweatshop wages, and if the dollar per day measure is reasonable to incorporate into a moral evaluation. Lastly, I think that during the economic development of the United States, wage levels were low because productivity (output per person hour) was also low. Might sweatshop wages be considered “stepping stone” wages?
Sweatshop wages are unfair and unjust to the workers who are working under these factories. By hiring these poor people, it is supposed to be doing them a favor by helping them make a proper living, but from the articles I been reading concerning this issue, it portrays that hiring these people doesn’t seem to help them as much. With this little money given to them, what are they to use it for? At times they are not even paid on time after all the work they’ve done. These people are shedding their sweat, tears, and blood for so little money that could probably just feed them some sort of a snack, not even a proper meal. Along with that, how are they to educate their children, pay for rent, electricity, gas, insurance, hospital visits, etc. With the low wages they receive, these people do not have any of the opportunities others have nowadays. These people are struggling in order to make a living. The little money they make isn’t fair; it is unjust for the long hours they work. The conditions of the factory itself aren’t appropriate. Laborers are being abused verbally, sexually, and physically by their supervisors, even children under the age. Yes, these people have the choice to work under these conditions, but then again they also don’t have the choice. Because they are less educated they are less likely to find better jobs that would hire these people, therefore they have no other options and are stuck with this job. From looking at several different arguments and articles, I would have to look at this issue based on the terms of the costs and benefits behind employees working in sweat shops. Although I am against sweatshops they could be somewhat positive as to portraying the growth in developing nations. The more these shops open the more the more people can find work and support themselves in a way. When more people work, the competition for labor will continuously push wages higher little by little as time passes. The increase in employment and wages then causes the societies standard living to increase to the better which isn’t a negative thing for the future.
Thank you very much Suna for this comment. It seems you are struggling with the question which is a good thing. It is a challenging question. In the first part of your answer the injustice of sweatshop wages is addressed. Near the end of your answer the promise of longer term development is considered. It seems your answer reflects a paradox about sweatshop wages that are simultanesouly unjust but economically promising. Hmmmm. Perhaps an extension of the question, and of this apparent paradox, would be to ask if buying products made in sweatshops was acceptable according to the Catholic social doctrine of solidarity. On the one hand, how can I express support for a better life for sweatshop workers? On the other hand, how can sweatshop workers obtain a better life for themselves? Another way of putting this might be to picture someone coming up to me asking me to sign a petition advocating that a certain sweatshop be closed down by government. Should I sign the petition in good conscience knowing what I know about the morality and economics of sweatshops?
The developing countries in which the majority of sweatshops are located compete to produce goods at the cheapest prices because they wish to stimulate their economies through better international relations with countries like the U.S. Economically speaking, it is more effective for corporations to offshore and to choose suppliers who produce goods cheaply by means of minimizing their workers’ salaries and benefits, but with so many of these workers living in abject poverty, their wages prove unjust. There is no question that the wages some of these workers earn who are living in third-world countries are decent by their standard of living, and only appear unjustly low by U.S. standards, but there is even further reason for people to be apprehensive about sweatshops. Because workers are not paid adequately enough to afford basic necessities such as food, many are overworked and exhausted, producing poor quality products as a result. Thus, it is actually less beneficial for corporations to choose suppliers who produce goods cheaply by paying low wages to workers. Also, the conditions under which the labor works are so dangerous that the qualities of the products are bound to suffer. While the use of sweatshops has certainly proved to be beneficial in somewhat stimulating some poverty-stricken countries, such as Korea and Taiwan, the conditions of the workplaces and the low wages are still inhumane and can be corrected. Justifiably, sweatshops provide workers with the best opportunity to earn money in some of these developing countries, but that does not mean that better opportunities cannot be created through some slight improvements.
Thank you, Katie, for your wonderful comment. You make a very good point that while sweatshop wages may be economically efficient, we cannot ignore the moral factor. We do not live in a black and white world but rather one with many gray areas. What may look good from one perspective may not be so great from another. Questions we should ask ourselves in thinking further about the issue are: where can we find the data indicating income vs. cost of living and what does that data tell us, and how do we determine what qualifies as overworked? While sweatshop workers may not earn enough to put as much food on the table as American families, are they earning enough so that their families do not starve to death? Farmers are engaged in manual labor and sometimes they work very hard to grow crops but the price of goods falls and the farmer will not earn as much as he anticipated or needed, thus impacting how much food he can put on the table for his family. Does that mean farming is unjust? As for the question of overworking employees, how do we gauge that? A farmer arguably works much longer and much harder than someone in an office, so does that mean the farmer is overworked? Where do we draw the line? These are very difficult questions, but we have to ask them when examining sweatshops under the lens of morality.
I think one would be hard-pressed to find anyone who honestly thinks that sweatshop wages are just, unless they are a part of a company benefiting from those wages. The easiest way for me to decide if something is just is to ask myself if I be okay doing that job and earning that wage. The only way I would ever even consider working in a sweatshop is if I was, like most sweatshop workers, desperately poor. Even in that situation I would not actually be okay with working in a sweatshop, I would be working out of desperation does not justify unjust treatment. In fact, it is those in the worst situations that need to be given preferential treatment, as the Catholic Church teaches. To understand what makes sweatshop wages unjust, it is important to consider what a just wage consists of. I believe a just wage is a livable wage. By livable, I mean that if a person only received that wage they would be able to live a decent life, consisting of having enough money to eat what the government considers a healthy diet, afford a place to live, and have access to healthcare. These seem like reasonable standards, but people making minimum wage in the United States barely meet these standards, so by these standards sweatshop wages are clearly unjust for the workers. People arguing in favor of sweatshop laborers will agree that their labors are unjust, but those on the other side, the employers, believe that they are just. This is really a misunderstanding. If employers and companies that include sweatshops in the production of their product believe that they provide just wages, it is because they have different standards for their workers than they do for themselves. Because these companies have lower standards for sweatshop workers than they do for themselves, they view their workers not as humans but as laborers. In fact, the existence of sweatshops creates a cycle of degradation and eventually dehumanization that the workers are not able to get out of on their own. So, based on this observation, although many justify sweatshop wages because they are the best alternative to poor, unskilled workers and say they serve as a way out of poverty, this is simply not true. I doubt anyone has ever gotten above the poverty line and lived a better life because they were able to work in a sweatshop for a couple years. One could easily argue that sweatshop wages are efficient in the short run for many reasons: products produced through sweatshops are less expensive and therefore available to more people to purchase and outsourced products give developing countries jobs and are a foreign investment. However, because sweatshop wages are not just, then they are also not efficient in the long. Although they provide some short-term benefits, they do not improve the lives of their workers or give them an opportunity to better themselves. In this way, sweatshop wages are actually inefficient when you consider all of the problems they will cause for humanity in the long run. Just like slavery, the repercussions for sweatshops will probably affect humanity for many years after they are completely stopped. Sweatshop workers get caught in a cycle of desperation that they cannot get out of without outside help. Someone has to stand up for the rights of those workers because they are human beings and deserve just and efficient wages.
Thank you very much for your comment, Arielle. Asking ourselves if we would be comfortable performing a certain task for a certain wage is a good place to start. Let’s take it a step further. Would you be comfortable working as a firefighter knowing that if you enter a building to save someone, you may die in the process? The median salary of a firefighter is $40,317. Are their wages unjust because of the danger involved? You also make a very good point about just wages being livable wages with enough money coming in to purchase enough food for a healthy diet, obtain a place to live, and have the ability to pay for healthcare. If we define a healthy diet as that based on government standards, we will have very different results throughout the world. In some countries a bowl of rice and some fish is considered healthy whereas other countries say a certain amount of fruit every day is necessary. This wide range of definitions of a healthy diet forces us to ask ouselves what is necessary for people to survive and stay healthy. You did well demonstrating that this is a complex issue with many factors to take into consideration and you are correct that sometimes misunderstandings happen between employers and employees. To add more food for thought for the discussion, I invite you to look at a New York Times article about sweatshops that appeared in January.
In order to support my reasoning on the debate of sweatshop wages, I researched articles about the first sweatshop-affiliated company that came to my mind: Wal-Mart. According to the United Food and Commercial Workers International Union, international clothing workers for Wal-Mart make as little as nine cents an hour. I make over eighty times that much money, and I struggle with the idea of affording college. These workers barely can afford a bottle of water. The International Labor Rights Forum claimed that many workers are paid up to thirty percent below their country’s legal minimum wage. This is unjust to the extreme. No laborer anywhere in the world deserves to make such little money in order to provide for herself or himself; there is nothing sensible about the idea. A person who makes clothing for others so that people can be protected from exposure to multiple things is paid less than a dollar a day; yet, for example, a professional basketball player whose duty is to bounce a ball around a court for entertainment receives an income of several million dollars for training and playing in one season. While I have nothing against basketball and know that it takes effort, talent, and determination to be performed well, I see no justified reason for this difference in wages.
The UFCW also states that a study done in 1999 revealed that Wal-Mart workers for the Kathie Lee Gifford clothing label had shifts on weekdays from 6:50 a.m. to 6:10 p.m.; these hours alone are horrendous, but it is unacceptable that the people dealing with these shifts every day were paid nothing worth that amount of work and time. The ILRF reports that Wal-Mart workers routinely are forced to work overtime, yet rarely are paid for it (if at all). In addition, the required health care clinics do not exist, and women who are allowed to work are most often denied their maternity leave and benefits.
Although these facts stray slightly from the subject of wages, everything involved in sweatshop labor goes hand in hand. It does not matter if the company or franchise benefits in some way from paying low wages to its workers. Companies and franchises would not exist at all if not for its workers, so there is no reason for businesses—especially those that are successful—to pay such low wages to its workers who are, inevitably, their heroes.
Thank you very much for your comment, Liz. You make a good point that workers are paid as much as 30% below the country’s minimum wage. What we need to ask, then, is if this is the case then why are sweatshops still in existence in these places? If people are willing to work long hours for little pay what does this say about the living conditions for people who opt out of working in factories? What was life like before the sweatshop was built? Chances are very good that people choose to work in sweatshops because it is better than not working. So now our question is: how do we make conditions better so that sweatshops like those you mentioned no longer exist? It’s a question that anyone involved in the debate must struggle with. Also, your comment about the professional basketball player is an interesting one. Wages are partially influenced by the demand for a certain job. If a large number of people want and are qualified for a certain position, the amount of pay will decrease because employees are easily replaced. Highly specialized jobs like a basketball player allow for higher incomes because so few people are able to meet the requirements. So, part of the reason sweatshop wages are so low is because the demand is so high. The questions is, if demand is high and people are willing to work, does that make the wages unjust? What should we do with these factories if people keep applying for positions?
The modern day slavery that is going on is economically immoral and unjust to the workers. The conditions of sweatshops and how they are ran goes against economist Ralph Nader’s and Milton Friedman’s views of how businesses are suppose to be run. According to Nader businesses have ethical and social responsibility. Friedman’s point of view the only social responsibility of business is to use its resource and engage in activities designed to increase its profits as long as it engages in open and free competition. Although sweatshops are making a profit, they are not considered to be a business according to Nader and Friedman.
Sweatshop wages are unfair and unjust to the workers. By hiring these people who are in the midst of poverty sweatshops should be providing better wages and conditions for people to work in. It is unfair for someone to have to work long hours in a factory with horrible conditions just to get a wage that is not even enough to provide a stable household and provide food for families. In my opinion the problem with sweatshops needs to be brought to gain more attention. In the media we seldom hear about the problems that are going on with sweatshops leading to many people to be unaware of what is going on in sweatshops. The people that are working in these sweatshops are treated with no dignity and are abused verbally, physically, and sexually by their bosses. Even though sweatshop workers do have the choice to work under these condition many of the workers are not educated enough to find better jobs to provide for themselves. How these workers are suppose to provide a study household for their children with such wages? We need to come together as a country and fight these conditions and pressure sweatshops to change the conditions and wages of the workers. If we were to come together we will be able to bring change to people who have to work under these horrible conditions and hopefully provide information to people about what is going on in sweatshops.
Thanks Asia for your comments. There is a tone of moral urgency in your comments and that is good, as far as it goes. Passion for justice’s sake is good, but so is right reason directed to seeking the common good. Good intentions are not enough. We need to think things through with the tools of social science as well. The very liberal, Nobel Prize winning economist Paul Krugman wrote an article for Slate magazine in 1997 called “In Praise of Cheap Labor” . He made two observations about the outrage expressed by his readers when he noted the positive role played by cheap labor, globalization, and economic development. First he said “The lofty moral tone of the opponents of globalization is possible only because they have chosen not to think their position through. While fat-cat capitalists might benefit from globalization, the biggest beneficiaries are, yes, Third World workers.”
Next, Krugman wrote: “Why, then, the outrage of my correspondents? Why does the image of an Indonesian sewing sneakers for 60 cents an hour evoke so much more feeling than the image of another Indonesian earning the equivalent of 30 cents an hour trying to feed his family on a tiny plot of land–or of a Filipino scavenging on a garbage heap?
The main answer, I think, is a sort of fastidiousness. Unlike the starving subsistence farmer, the women and children in the sneaker factory are working at slave wages for our benefit–and this makes us feel unclean. And so there are self-righteous demands for international labor standards: We should not, the opponents of globalization insist, be willing to buy those sneakers and shirts unless the people who make them receive decent wages and work under decent conditions.”
Would justice be better served by closing down a sweatshop, or demanding that the employer that runs it pay a wage we deem appropriate? Possibly, possibly not. But if sweatshops are an important step in a process of economic development that leads to better wages, as unpleasant as they might seem, sweatshops might be important preferential options for the poor.
Economist Bruce Blonigan compared wages of foreign owned sweatshops to locally owned firms. Here’s what he found:
“The first thing that everyone always focuses on with multinational firms is the wages of the workers. So, let’s focus on that first. A new wave of research has had access to plant-level data on manufacturing production from less-developed countries. The researchers have obtained data on every single manufacturing plant in Chile, Mexico, Colombia, Taiwan, Venezuela, Turkey and more new countries are being added every year. Every single one of these studies comes to the same conclusion: Controlling for all other plant-level characteristics, foreign-owned plants pay higher, often substantially higher, wages than locally owned firms. Note first, this is examining the universe of all manufacturing plants in a country and is the overall effect, which is much more powerful than previous case studies that either document a few “good” or “bad” foreign-owned plants. Second, note that the relevant comparison is between the wages at foreign-owned plants versus local-owned plants, not how these wages at foreign-owned plants compare to U.S. wages or some other metric that is not directly comparable. In the end, the stark conclusion is that no matter which country you look at, multinational firms pay higher wages. ” Reference here.
Unfortunately, not that many people are aware of sweat shops. Who will turn down the opportunity to buy decent and affordable clothes? Many of us do not have the option of resorting to designer clothes made by skillful fashion artists. In a perfect world, many of us would be strutting our Louis Vuitton handbags and Prada shoes. However, in our current economic crisis, even well-known fashion designers have turned to the successful industry of sweat shops. A smart consumer should be aware of the history and ethics of any business worth their money. If it is not true that many people are unaware of sweatshops, then, unfortunately, we automatically assume that the consumers of the world are negligent and irresponsible. But what about the needy homeless man or the single mother without child support? I am not arguing for sweatshops but I am simply saying that one cannot define oneself just or corrupt by buying an item from Wal-Mart. Corporations can argue that business is business but no one realizes that the consumers are the ones with the power. We can write to our local senators and sign petitions for the injustice to stop. If we commit ourselves to this, our poor and vulnerable no longer have to come across the controversial dilemma of human dignity and successful business, when they themselves are struggling with human dignity.
Thank you, Leticia, for your thoughtful response. Questions we must consider are how senators and petitions can stop injustice in other countries where sweatshop labor takes place. A sentaor’s power does not extend beyond the borders of the United States, so what kind of impact would petitions and senators have on the consumer’s indirect interaction with sweatshops? Tarrifs could be used to tax incoming merchandise from sweatshops, but higher taxes mean that the price that consumers pay will increase. Legislation may be put in place to tax companies that utilize sweatshops. In our economic climate where many companies are already struggling, that may mean more layoffs of people who work in the stores. What about a proposal reminiscent of Buy America? If goods from other countries where sweatshops produce merchandise are banned from the States, supply will fall drastically because so many companies have factories in other countries. If the supply falls and demand remains high, that means prices will increase. The homeless man and single mother may no longer have a guilty conscience, but the question becomes whether or not they can now afford to buy goods that used to be less expensive. It’s a very complicated situtation in which we have to consider our actions on a global scale. Shutting down sweatshops, as has been suggested in other posts, may prevent people from working in harsh conditions but it can also increase the financial burden for those who rely on the inexpensive goods.
As a result of globalization, there has been a surge in the use of sweatshop labor. Companies view cheap labor as a method of maintaining low costs to be able to compete in markets with ever growing numbers of competitors. However, many companies and consumers wither fail to realize or choose to ignore the other methods by which costs can be cut such as lowering the multimillion dollar salaries of the companies’ CEOs. According to Nadar’s view on economics the use of sweatshop labor to lower production costs is unjust although it may efficiently lower costs. Sweatshops fail to award their employees, or rather slaves, a living wage. The wages sweatshop employees receive does not give them the money needed to support themselves and their families let alone give them the opportunity to escape poverty. Supporters of Friedman economics may argue that the quality of life of a company’s employees is not of concern to the company and that only the success of the company matters. However, this calls us to question the definition of success: can success truly just be measured by a company’s profits or does the profit each employee earns a factor as well? I argue that the success of each individual is a factor because how can a company be deemed successful if the wages it awards do not allow their employees to live dignity-filled lives. Even though these employees sign contracts agreeing to these meager wages, often times there is no alternative and thus really they are not choosing to work in the sweatshop. Although meager wages may efficiently reduce the prices consumers pay for goods, as a proponent of the Nader view, I believe consumers have a social responsibility to support companies who pay livable wages. However, when companies pay these unjust wages to lower their costs and can then charge lower costs, some companies have created monopolies. Monopolies result when other companies, such as those who pay just wages, are unable to lower their production costs and charge higher prices, thus they cannot compete with companies using sweatshop labor. Therefore, because of the efficient manner in which they lower production costs, sweatshop wages creates unjust circumstances for laborers by stripping them of their ability to lead dignity-filled lives and small companies by creating markets in which they are unable to compete. Consequently we must search for a positive alternative which is both just and efficient so that people can live with dignity under just circumstances afforded by livable wages and, in a purely capitalistic sense, competition and choice exist to ensure efficient markets.
Hey Lauren, this is a really good comment. Thank you very much for writing it. What I like best about it is where you focus on success as defined by each individual’s thriving in determining the overall success of a company. That’s a tall order, but spot on it seems to me in promoting human dignity. Work is a human activity and when workers fulfill their own humanity by working for themselves and their families, society benefits.
I think your moral analysis is heading in the right direction, though I’d be careful in some of the terminology. Do you really mean to say sweatshop workers are slaves? When I think of chattel slavery, I picture workers like in antebellum South, working all day for no wages at all, just room and board paid in kind not cash. When I think of sweatshops, I guess I’m assuming that they are not slaves in the sense of receiving no monetary compensation. Another assumption I’m making is that there is competition among sweatshop employers, and that worker productivity drives living standards.
I don’t want to defend sweatshops as deadend occupations. But if sweatshops are stepping stones, maybe condemning them as unjust is too simple. The vast majority of economists are convinced that standards of living around the world are driven by productivity, or output per worker hour. Mankiw’s 5th edition of Economics (p. 554, I think) talks about the importance of productivity in determining living standards. Here is some of that reasoning applied. Imagine if one of your classmates was Queen of the World for one day and you advised her to increase wages in all sweatshops by 1000%. What would happen the next day, assuming no change in the output of those sweatshop workers. You see where I’m going with this, no doubt. While purchasing power might go up 1000%, there would still be the same amount of goods to buy and so the prices (costs) of those goods where go up too, probably eventually pretty close to 1000%. Workers are no better off. The only economic way to make workers better off is to raise output per worker; productivity. This can be done by adding more machines, more training and education of workers, or increases in the technological knowhow of the industry. Once output per worker goes up, living standards, rather than just nominal wages, can increase.
I think focusing exclusively on nominal wage levels at sweatshops as the basis for declaring them unjust side steps the challenge of thinking about how individuals, and their employers, and their countries, become more successful. If wages are low because output per worker is low, and the figures on international productivity comparisons suggest this is the case, the question is not so much how do we increase wages, but what changes promote increases in productivity. I think in this sense sweatshops may have a positive role to play.
Picture this- you just walked into a store and found a pair of Nike sweatpants on sale for much lower than the original price. You are ecstatic, and cannot wait to use your paycheck to buy them. However, what might slip your mind is where these sweatpants were made. Although Nike may be one of the leading sports apparel companies, the workers that are “employed” to them receive unjust wages and poor conditions. This example, is just one of the reasons I believe that sweatshop wages are neither just nor efficient.
Although most of these places are in third-world countries where someone may be able to survive on 14 cents a day—it still does not make it right. If you look at Friedman’s opinion on the social and ethical issues, it is clear that this is exactly what sweatshop owners are following. A company is only liable for telling the truth about a product that they are selling and using government power to get rid of competition. Although this is just one view and you can agree to disagree. There is nothing wrong with this but it can easily be disagreeable. This gives people who run the sweatshops to have a better chance at having poor working conditions as long as they are earning a “profit”. Being raised a Catholic, I do not think that is okay to pay someone 14 cents a day for hard labor, regardless of where that person comes from and if they could “live” on that amount.
Thank you, Katie, for your response. 14 cents/day is very difficult for we Americans to swallow especially since on average we make around $100/day, but we have to be careful not to succumb to ethnocentricity when comparing our own living standards to those of people in other countries. Let’s take a look at this issue from an economic perspective. Gregory Mankiw recently published an economics textbook in which part of a chapter is devoted to an explanation of the relationship between productivity and living standards. The SparkNotes version is that living standards will only go up if productivity goes up. We can see this in the equation AC=W/AP (avg. cost = wages/avg. productivity). The key here is productivity. What we’re seeing happen in countries with sweatshops is that wages are down because productivity is down which drives down the average cost. Now let’s do a thought experiment with this equation. We get to rule the world for one day and for that one day we decide that we’re going to increase wages for people who work in sweatshops. Productivity does not have to increase. So what happens when people are paid more but do not work more? The cost of goods increases. What we basically have here is inflation. With inflation, as you know, the cost of living increases while productivity remains stagnant. If we assume that people are being paid fairly for the work they do, that means they are not being paid more to meet the demands of the cost of living because they are not producing efficiently enough. So, while increasing the pay of sweatshop workers from 14 cents to, say, $1 day would not help them in the long run unless they become more productive. How do we know that the workers are not already producing at a rate worthy of higher pay? The Bureau of Labor Statistics provides a breakdown of hourly pay per worker in various countries for 1996-2007. In 2007, Americans earned $30.56/hour while in Mexico they earned $3.91. Why is this? Let’s compare a shoe factory in the United States to one in Mexico. An American has the technology available to produce 10 shoes in 1 hour because a machine works much faster than a person. In Mexico, they have to work by hand, which means that they only produce 1 shoe in 1 hour. The American can make ten times the amount of product, which is reflected in his paycheck. So why not move shoe factories back to the United States where we can produce more and people are paid a fair price? The result is that we deny people in Mexico a job opportunity and we also increase the amount we have to pay for shoes. If it costs $30 to employ someone for 1 hour to make 1 shoe and that $30 covers health benefits, bills the person has to pay, and a little extra to save, that means a shoe company has to charge a minimum of $31 for 1 shoe to make a $1 profit. That means 1 pair of shoes at Wal-Mart is now $62 instead of the average $20 that consumers pay. On a final economic note, 14 cents/day may be bad, but conditions are improving. James Gwartney created a nice research project examining how many people in various countries are earning $1/day between 1980 and 2005. In 1980, 42.5% of the developing world was earning $1/day. By 2005, it had dropped to 19.4%. People are earning more money. It just takes time. Finally, as a practicing Catholic myself, I encourage you to look at the link above to the Compendium of Social Doctrine of the Catholic Church. The Church states that if wages are enough for people to live on, then they are just. We don’t have to like the fact that some people live on low wages, but if they can live, that’s what really matters.
When asked if sweatshop wages are just and efficient, I become irate to the fact that sweatshops are still in existence. As a Christian, I view sweatshops as a moral wrong because those who put in countless hours of labor are not getting compensated adequately. As statistics have shown, the people who work in these sweatshops are amongst the hardest working people in the world, so to me, I cannot understand why their wages do not reflect the work done. The only reason these people are willing to work in inhumane conditions for more than eight hours per day, and while experiencing verbal and physical abuse is to support their families. A significant portion of the vicious sweatshop cycle is due to the extremely low wages workers are paid; by getting paid so little, laborers work extra hours to earn enough money to meet the basic necessities of living: food, shelter and clothing. Also, the argument of respecting human dignity comes into play. If these businesses are preventing its workers from securing the basic needs to life, the businesses obviously show indifference in regards to the human dignity of its workers. By allowing this system of sweatshops to prevail, we are fulfilling the cliché of letting the rich get richer and letting the poor get poorer.
However, from a business perspective I can understand why professionals will argue that sweatshops are efficient. The usage of sweatshops allows a firm to maximize profits because of the extremely low cost of labor. What these businesses fail to realize is that the option of not using sweatshops in general, still offers the opportunity to maximize profits while respecting the dignity of workers, meaning it is possible to compete in a market without the use of sweatshops. The elimination of sweatshops will not inhibit a business from making profit. For instance, in the green America sweatshops article, the fact is given that consumers would be willing to pay up to 28% more on an item if he or she knew it wasn’t made in a sweatshop. This substantial increase in price would allow for laborers to be sufficiently compensated while at the same time the business firm will prosper. Although sweatshops appear inevitable, until the wages significantly increase as well as the quality of the work environment, sweatshops do not outweigh the cost of sacrificing one’s human dignity and the rights which accompany that.
Thank you for your comments, Brittany. And thank you also for taking the time to incorporate the reading links to this discussion. It’s very important that we take the time to examine the issue from both moral and economic perspectives. I encourage you to take a look at my response to Katie Baumgartner concerning the economic reasoning behind low wages in sweatshops. Even if people are working hard, if they cannot produce a product at an efficient enough rate, it becomes inefficient to pay them more money. Keeping this in mind, are sweatshop wages still unjust? Let’s look at an example. I work at a vineyard where the rate of pay is $10 for 1 crate of grapes. In 8 hours I can fill 8 crates, earning $80 in one day. Someone else figured out a more efficient way to work and can fill 16 crates, earning $160 in one day. I worked just as hard as the other person and made half as much money. Does my employer have a moral obligation to pay me more money because I worked just as long as my coworker? Are my wages unjust? If my employer pays me the same amount to do half as much work, isn’t that like punishing the more efficient workers? And what kind of an impact would that have on productivity if I was paid more for less work? It seems like the more efficient employees would stop being efficient which could lead to layoffs and possibly eventually the closure of the vineyard. These are things we have to think about when considering the moral implications of sweatshop wages. Ultimately what we have to ask is: if the wages are enough to live on, how much should an employer pay an employee to ensure that the company remains open so that it can pay its employees and so that it can also maximize its efficiency? If the efficiency is too low, people could be out of a job. As a final note, you used a very important phrase in your comment: “these people are willing to work”. The excerpts from Matt Zwolinski’s papers point out that when people are willing to work in sweatshops, it means that they had a choice. Since people make decisions based on what they think is best for themselves and what will make them happy, it means that they think sweatshops are their best option and so chose to work there. In countries where the choice is rummaging in garbage dumps or working in sweatshops, should we deny people the choice of a factory job where money is guaranteed as opposed to looking through heaps of waste in the hopes of brining home enough money to put food on the table?
The question regarding whether or not wages within the sweatshop industry are just has been highly debated by people harboring numerous opinions. In a world so obsessed with progress, production, and profit, we cannot blame so many people who question whether or not to support sweatshop labor even though it is so highly controversial. The fact is, companies who maufacture products are created for one purpose; namely, to earn money. And as the global market has evolved, so have companies in order to keep increasing profit. Globalization of manufacturing and distributing has added so much to the economies of the United States and countries abroad, and sweatshops were a direct result of this. Truthfully, sweatshops are efficient. They have proved to be the most successful medium by which companies are able to maximize profit beacause of their ability to minimize production costs. Thus, they allow the manufacturers to complete their purpose. However, simply looking at this issue in terms of its efficiency would like viewing genocide as a means of reducing overpopulation. The desired end result is there, but the ethics of the process must not be overlooked. Indeed, in my opinion, the end does not justify the means.
While some may consider sweatshops just because of the fact that the workers are usually voluntarily hired, I disagree. Whether you are a disadvantaged person who lives in a third world country, or someone living within the United States who is just going through hard times financially, when work is offered, you are going to take it. That is why it is so easy for sweatshops to exploit the situations of thousands of people. And even if the person voluntarily seeks out a job there, the sweatshop needs to grant them a wage that is sufficient for them to maintain a good quality of life. Indeed, “natural justice precedes and is above the freedom of the contract” because the law of human dignity dictates that people have to be paid a fair wage, regardless of what governmental laws allow.
Another major issue regarding sweatshops is the question about what constitutes a sufficient wage to maintain a good quality of life. In my opinion, being able to support oneself and one’s family without having to work overbearingly long hours is sufficient. Many sweatshops pay their workers so little that workers need to work unbearable amounts of time just to be able to live. This draws a line between men and women working for a living and men and women living at work.
In the end, it is clear to me that it is obvious that sweatshops are efficient, but they are in no way just. Due to exploitation, low wages, and cruel conditions, sweatshops have become the epitome human greed and its ability to transcend all morals. Companies need to stop viewing their workers as capitol, and start thinking of them as human beings. Sweatshops do not pay their employees just wages because the entire existence of sweatshops is unjust.
Hey, Andrea, thanks for this comment. I admire the high level of sophisticated analysis in your thoughts. Loved that line about looking only at sweatshop efficiency issue is like looking at genocide as one way to reduce population. Yours is a sharp mind. And I think the weight of Catholic social doctrine is on your side in pointing out it is not enough to have workers agree to wages that may be unjust. Catholic social doctrine also acknowledges that business conditions are part of what needs to be taken into account in determining just wages. Therefore, there is no such thing as a just wage (singular), but there are just wages (plural) that vary from industry to industry, region to region, and country to country. It would be unjust in itself to insist that McDonald’s pay its workers a just wage of $100 per hour because the typical McDonald’s worker does not add that much revenue in an hour to the firm. It would ignore business conditions.
What effects wage levels? Economists usually say productivity, or output per worker unit of production time. The Church does not identify, to the best of my knowledge, an exact numeric value of what would be a just wage. Rather, it articulates principles, like those you and I mentioned, that should enter into prudential judgments about wage calculations. I’m learning quite a lot from the comments of students like you and your classmates.
I think I see why you answer the question by saying sweatshop wages are unjust but efficient. I’m thinking more and more now that sweatshop wages are just but inefficient. They are just in the sense that they are transitional, stepping stones in a process of economic development that moves a society from crushing poverty to more prosperity. Sweatshop wages are inefficient because they reflect low output per worker, lower than is possible if entrepreneurs innovated and made the production process more, well, productive.
Sweatshops have been a part of the global work force for many years; however, deplorable conditions remain in many of them. Not only do many of the workers receive verbal and physical abuse on a daily basis, but also the wages are appallingly low. The intent of minimum wages is to meet basic human needs, yet the wages in sweatshops barely cover the necessities. In this new global economy, where exploitation of cheap labor forces has increased sweatshop production, the benefits outweigh the costs by a large margin. The use of sweatshops can be directly linked to the expansion of corporate globalization. Adam Smith, the author of The Wealth of Nations, believes that people will only trade if they feel they are benefiting from the business. It may simple to turn to the questions “why do people choose to work in sweatshops” or “isn’t a job in a sweatshop better than no job?” It is important to keep in mind that in many cases there are no other available jobs. In addition, just because a bad job is better than no job, there is no justification for labor abuses. According to Nadar and Friedman, sweatshops are neither just nor efficient. Nadar believes a business should have social responsibility; something sweatshops lack. Friedman says businesses must be open and have free competition without dishonesty or fraud; again, where sweatshops fail. The manner in which sweatshops currently operate falls short of both of these goals. Sweatshops may be efficient for the corporations as far as profits go, but they are completely unjust. Companies can achieve low selling prices because the costs to make their products are dreadfully low, yet the cost in human suffering is extremely high. The conditions in sweatshops should be a major global concern today in order to bring about change in the manner at which humans are treated.
Scarlett, thank you for your comment. To summarize your view, sweatshop wages are unjust but efficient. To summarize my view, sweatshop wages are just but inefficient. I think they are just in the sense that they are stepping stones in a process of economic development, painstakingly slow, that raises standards of living. Sweatshop wages are inefficient in the sense that in a more productive world, one in which workers were highly skilled and educated, one in which there were lots of sophisticated machinery to aid in the production process to make each worker more productive and so more ‘valuable’ in the labor market, there would probably be fewer sweatshops. But the question is how we get from our current world to that one in which sweatshops are few and far between. I say by advocating more freedom and the rule of law around the planet. Could this be what the Church means when it advocates a loving solidarity?
Sweatshop wages are indeed unjust, but efficiency is a different story. In this current time of globalization, many markets are spreading their wings to all parts of the world which include offshoring. The unintended effects of sweatshops include the financial conditions and the ideology behind a firm’s decision to use them. Employing workers on a large scale, forcing them to work long hours, and paying wages that the workers can barely survive on, result in a greater profit for the producers and a cheaper selling price for the consumer. According to the demand curve for labor, as the wage rate decreases the number of workers increases. Therefore, firms placing factories in decrepit, third world countries receive a greater labor force. Many growing corporations use sweatshops to produce their goods on a large scale at the lowest possible price, but disregard the people producing the goods altogether and the conditions they work in. Essentially, the economic benefits for companies using sweatshops prove greater then those paying fair wages and providing good working conditions, but morally speaking the sweatshops and their wages provide no benefits to the people. With regards to the ethical and social responsibility of the business, companies that use sweatshops would fall closer to the view of Milton Friedman and not that of Ralph Nader; although in most cases the companies act unethically when concerning the labor. The simple fact that people simply cannot live on a dollar a day is unfortunate, but considering the alternatives, there seem to be few. Though, providing higher wages seems ideological to continue keeping profits elevated, the option to allow more reasonable hours and more sanitary working conditions seems a suitable alternative. Despite the producer and the consumer, the workers should be the primary concern in order to better the global economy.
Hi Katie, and thanks a lot for this comment. It is good. I quibble a bit with the Freidman-Nadar dichotomy. As I understand it, Milton Friedman advocated free markets and limited government, while Ralph Nadar advocates regulated markets and interventionist government. As the Church has condemned collectivism and socialism as being contrary to human nature, (I suppose I am sort of implying that Nadar is a kind of socialist, which I think he is…. which someone might object to), I think a better dichotomy between two economists might be say Paul Krugman (Obamanomics hasn’t gone far enough) and Russell Roberts (Obamanomics has gone too far).
What about sweatshops? Aside from the just/unjust and efficient/inefficient debate, do sweatshops promote economic development? If in the main they did not, I would not be interested in them. If they did, on balance, add to economic development, then I would hesitate to oppose them on moral grounds. The big culprit in my mind is coercion. Workers have to be free to improve their economic circumstances, and they are probably the best ones to decide how that is to be done, not government bureaucrats or do-gooders. But if workers are forced, I mean really forced to do work they do not want to do, then I think that is immoral. In other words, in my view, economic coercion, the opposite of economic freedom, is far worse morally than low wages (reflecting low productivity) or bad working conditions.
The question of are sweatshop wages just and efficient is not an easy answer. There are completely different answers, economically and morally. Truly, what determines wages? Economically speaking, the equilibrium wage rate is the wage at which the quantity demanded of labor equals the quantity supplied of labor. Or that it is the wage at which the umber of people employers are willing and able to hire is the same as the number of people who are willing and able to be hired. Now, does this information answer the question? No, that is only how wage is determined but answering if sweatshop wages are just and efficient is a lot more complicated than a definition from a book. Morally, sweatshop wages are neither just or efficient. The Catholic faith strongly believes that sweatshops should not exist without higher wages. Yes, people choose to have these jobs, but a lot of them it is there only options. In today’s society there is a such a focus on making money because of the economic recession, company’s are losing sight of the vision of their work. Many believe that money does not buy happiness, but to big corporations that is all care about these days because no one is making money. Economically, sweatshops are efficient, but only for the sake of companies making money. Yes, having low wages for sweatshop workers indeed gives the companies huge profits, but who is to say that is most important? To corporations and companies, yes that is important but to the people working in the sweatshops that is not. However, according to Nadar he feels that businesses have ethical and social responsibilities they owe to their companies. And Nadar strongly believes that businesses should also treat their employees with respect. Opposing Nadar, Frieidman believes that businesses do not have social and ethical responsibility. And the sole purpose is for the business to use its resources and engage in activities designed to increase the profits. Very two different views, both economically speaking, The question is simple, but the answer is very complicated. Morally sweatshop wages are simply not just, but economically speaking the wages are efficient. Low wages causes major profits for corporations, but low wages put the employees in difficult economic statuses. Sweatshop wages are not just, but are economically efficient.
Hi Moira. Thank you for your comment. I have to say that I am very, very impressed by you and your classmates’ answers to this challenging question. A pattern is emerging in the responses: sweatshop wages are unjust but efficient.
This pattern seems to be holding together two contradictory elements, respresented by the Friedman-Nadar comparison. Your reasoning is solid as far as I can tell. But let me raise a question.
Economists talk about Pareto optimality by asking would it be possible to alter social circumstances in a way that made one person better off without making anyone else worse off. Let’s apply this to sweatshops. Taking the position that sweatshops are unjust and so just-minded people should not buy products produced at sweatshops, and that government agencies should try to close them down, who would win and who would lose from these events? If even one worker was willingly and freely employed at a sweatshop, closing it down or boycotting its output would arguably harm this one worker and her family. And so closing down sweatshops is not Pareto optimal.
Sweatshops are an unfortunate and unavoidable reality due to globalization and the off-shoring of domestic labor. Companies promote the existence of sweatshops when they outsource their production to other nations across the world in order to make more “efficient” use of their resources. While these companies increase profits and efficiency, laborers are paying the price. Sweatshop wages are neither just nor efficient with respect to the workers.
One of the main reasons that the existence of sweatshops is justified by economists is that, according to Milton Friedman, it helps fulfill the main goal sought by companies: making a profit. This philosophy states that companies have no social responsibilities and need only avoid lying to their consumers. If one views the issue through a purely economic lens, sweatshops are justifiable. But no problem is ever one sided. The welfare of laborers who depend on sweatshop wages must be taken into account.
The sole achievement of a company should not be simply to make a profit. Though Friedman argues that businesses should have nothing to do with social welfare, Ralph Nadar emphasizes that the well-being of workers should be a top priority. This belief also corresponds with Catholic social teaching. According to the Compendium of the Social Doctrine of the Church, just wages are defined as “the instrument that permits the labourer to gain access to the goods of the earth”. The meager wages distributed in sweatshops certainly do not adhere to this definition. Workers who depend on these wages are unable to create a better life for themselves and are forced to continue their participation in sweatshops. They are unable to use their wages efficiently due to the lack of sufficient compensation from their employers. Sweatshop wages are unjust and therefore the existence of sweatshops cannot be validated.
Thanks very much Julie for your comment. You make a compelling case that sweatshops ought to be closed down. Do I have that right? Should they be? How would they be closed? I imagine police, maybe even soldiers would be involved. Perhaps at some locations there would be violence. How would the sweatshop workers respond? I would imagine not all of them would be disappointed. Some would cheer the police or soldiers’ actions. Others might not care at all what was going on. But I think there would be more than a few who would strongly object. If the sweatshop job was the best alternative, what do they do now? Could these workers not apply the Church teaching you mentioned in this context, that their sweatshop wage was an instrument that permitted them for a time to gain access to the goods of the earth? What would I say to this worker? Well, your sweatshop was judged to be unjust, and we had to close it down. To me, the key in all of this is what workers choose freely. We know now that poverty is not lovingly addressed with handouts alone. People must be free to struggle to develop themselves by overcoming the obstacles they encounter. Solidarity means cheering them on in this struggle, because it is they who matter, and because it is we who struggle with the same things.
I would argue that sweatshop wages are by no means just; however, it can attempt to argue that they are efficient through the eyes of the foreign companies that are outsourcing. In order to succeed as a competitive market in today’s world, one must do everything he or she can to minimize costs and maximize profits. The CEO’s of companies act as residual claimants meaning they receive the excess of revenues over costs as income; therefore, despite the injustice of sweatshop wages, they still decide to outsource jobs for the much lower total costs incurred. One might argue they are technically following the Friedman view of economics; they are simply using their resources and engaging in activities designed to increase their profits. They are by no means, however, engaging in open and free competition free from deception or fraud. Companies do not go out of their way to inform consumers that the product they are buying has been made in a sweatshop and, according to a survey on consumer attitudes, it was found that the average consumer would pay up to 28 percent more for a product if it was know said product was sweatshop labor-free. Therefore, companies are deceiving by omission of truth. Overall, despite sweatshop wages’ supposed efficiency, it is in fact the case that a change could be made for the better without any long standing detriments for companies; CEO’s will just have to be willing to reduce their ridiculously large salaries and then sweatshop conditions and wages can be drastically improved.
The supposed efficiency of sweatshop wages is completely invalid and their injustice only further discredits them. A just wage is one that can allow someone to live decently and provide for those under his or her care. It can be clearly seen that although the supposed “best option”, these wages are not bettering the lives of impoverished people in most places. Instead, people are enslaved in a life of debt that they will most likely never pay off and that will carry on to the next generation.
Thanks Brittany for your comment. I almost fell off my chair when I read the phrase “residual claimants” in your post. I think I learned that term in my first graduate course in economics. You reasoning made me think a lot about the question ‘are sweatshop wages just and efficient.’ If you’ve read some of my other responses to comments, you can probably anticipate that I would classify sweatshop wages as just wages in so far as they are truly voluntarily agreed to, and that they are transitional in the sense that they are stepping stones to something better. If sweatshop wages are part of what makes economic development happen, then I would hesitate to oppose them on moral grounds.
But what I am re-thinking now is the efficiency of sweatshop wages. I don’t think they are efficient at all. Let me explain. I was looking at some international employment cost figures at the Bureau of Labor Statistics site (my favorite site in the whole world!!!) and noticed that in 2007 dollars, it cost an employer about $3.91 to employ the average manufacturing worker in Mexico compared to about $30.56 for the average manufacturing worker in the United States. See table here. Now those figures refer to what it costs to employ the worker on average. It does not refer to wages. But presumably those labor costs have to be covered if the worker is to keep his or her job by enough revenues. But I wondered why it is so much cheaper to hire a worker in Mexico than it is to hire one here. It is probably because, on average, the American manufacturing worker is more productive than her Mexican counterpart. There is probably more capital equipment, more years of schooling, more tools, more technology per American worker than is the case for the Mexian worker.
These differences in part explain wage differentials between the two countries. American workers are more productive, more “valuable” in the sense that they produce more goods and services with higher retail price tags, and so they are more costly to employ.
So, in a way, sweatshop workers are not efficient in that they are not producing as much as they could if they had more training, more capital equipment, more tools, and so on. I’m realizing the importance of free market competition as an avenue of development for workers in countries with lower productivity rates. Picture two sweatshops making t-shirts using the same process and paying equal wages. The only way wages at either or both sweatshops could increase is if the t-shirts they made went way up in retail selling price, or if the workers got more productive. In a competitive t-shirt market, it is unlikely t-shirt prices will rise dramatically. So how could sweatshop workers become more productive? I guess one way would be for one of the sweatshop owners to seek an edge on the competition by innovating how the t-shirts were made. Maybe acquire a machine that increased the speed of production. The fact that sweatshops pay low wages (and assuming little or no coercion) reflects lower than optimal productivity levels. Sweatshops are not getting as much as they could from their workers and tools and resources. Thus, they are inefficient.
But the way to overcome efficiency limitations is not to close or condemn sweatshops. Rather, it is to hope that an entrepreneur figures out how to make t-shirts faster, better, or cheaper.
This question, while highly controversial, also contains multiple dimensions; to answer fully this question, one must analyze each of its two components, for to be just and to be efficient involve separate criteria.
For many people, when witnessing or even hearing about an issue of injustice, it is quite easy to label it as wrong due to moral obligations. With highly tuned compasses of just and unjust behavior, Americans are eager to point out the manner in which something is not fair. While this is vital to the progress of equality, safety, and justice to all nations, one must acknowledge the distinct difference between declaring a condition as unjust, and acting upon these emotions. Therefore, the simplicity of declaring sweatshop wages as unjust does not suffice unless one is willing to eliminate participation in all its products.
American consumers place the utmost value on finding low prices on the goods they need; searching the web, clipping coupons, and shopping around, they strive to avoid overpaying. It is this mindset which highlights this country’s, as well as many others’s dependence on sweatshop wages. When large firms pay these lower wages, they greatly cut costs; this allows for them to charge at prices lower than many other competitors and furthermore still make a substantial profit. As a result, consumers are presented with low priced products. The less expensive products which result from sweat shop wages encompass all aspects of consumer goods: clothes, kitchen wear, furniture, small appliances, and more. To pay sweatshop workers wages equal to American employees would produce a very steep increase in these areas of goods. Prices would easily double or triple, and buying, for example, a pair of socks for $25 is not too far fetched. Clearly, the concept of avoiding sweatshop products poses a difficult challenge.
It is also important to note that varying cultures have different standards of living and thus varying wages may suffice as providing adequate sums. While many sweatshop wages are too low to sustain life, the American hourly rate exceeds the sufficient rate for some countries, and therefore lower wages may still provide a better life than other firms located within that nation. Furthermore, in true Friedonite Capitalism, workers have the power to control the wages firms pay. If workers consider a firm’s salary too low or unfair they should refuse work there; if enough support follows, a firm will encounter a shortage of labor and need to raise the wages. Thus the free market can connect itself.
In essence, while one may simply declare sweatshop wages as morally wrong, countless people depend on the low prices which result from them. While, the wages are not always just in the aspect that they are not high enough to support a person, they frequently provide a better outlet than firms within a foreign nation. Furthermore, the firm’s ability to lower costs, charge so low that the demand is high, and still make a profit, exemplifies the manner in which sweatshop wages are indeed efficient.
Hello Marisa and thank you very much for this nuanced comment. You make a connection between bargain-hunting consumers worldwide and suppliers striving to meet those consumer demands. I think this is an important point. You go on to observe, correctly it seems to me, that sweatshop wages and conditions are complex and varied. To me, so much depends on the presence of freedom. If someone opposed to sweatshops urges people to voluntarily avoid buying this or that product because they are made in sweatshops, no problem. I don’t agree with the economic position, but if the person seeks to alter consumer behavior or some part of it through voluntary means, then again, no problem. So too with sweatshops. If workers are free to express their preferences with their feet, no problem. Coercion is the culprit. If workers are forced against their will to work there, then I have a problem not so much with the sweatshop itself but with the interests involved in forcing workers to do something they don’t want to do. Without freedom, the self-correction mechanism of markets you mention cannot work as well.
Another point I would like to raise with you, one that I am not sure I agree with but one that is out there, is the German notion that no job is better than a bad job. For a while, Germany pursued a policy of high-wage, high-quality manufacture and export. I remember talking to a German grad student in an economics seminar, and he kinda scoffed at the American notion that a job, any job is better than no job. This goes to your point about the cultural aspect involved in assessing sweatshops. I’m tempted to ask that German student, how’s that strategy workin’ out for ya. I think Germany’s unemployment rate is over 8% now, and has been high for a dozen years or so. The US unemployment rate is close to 9% now, but we’re in a deep recession. Our unemployment rate was about half Germany’s for many years in the 1990s and 2000s.
I’d be interested in how you would answer that question; is a job, any job, better than no job (USA), or is no job better than a bad job (Germany). Sweatshop jobs could be viewed as “bad jobs”, in the sense that they pay low wages and have harsh working conditions. Is a bad job better than no job? Should government policy ban bad jobs? Some questions to consider.
According to the Compendium of the Social Doctrine of the Church, a just, or living, wage dictates that “remuneration for labor is to be such that man may be furnished the means to cultivate worthily his own material, social, cultural, and spiritual life and that of his dependents, in view of the function and productiveness of each one, the conditions of the factory or workshop, and the common good” (2). In 1994, the U.S. Government Accountability Office defined a sweatshop as any “employer 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 registration” (1). While federal or state labor laws do not apply to those living outside of the US, companies should be expected to compensate workers with a just wage. Given the above definitions, sweatshops are clearly unjust. Additionally, although they may appear to be the most efficient way to produce a product in today’s competitive global economy, they are not.
Although one can argue that sweatshops are basically just because they bring jobs to those who need jobs the most, they do not provide a humane working environment. While specific working conditions vary from factory to factory, in comparison to first world working standards, all sweatshops are terrible working environments (4). Sweatshops exist predominantly in third world countries because their governments and people are so desperate for investors to boost their economies that they have no power to create any restrictions pertaining to how those businesses are run (3). Corporations recognize this fact and are therefore less interested in boosting a developing country’s economy as they are in exploiting their dismal and vulnerable situation. Taking advantage of those too weak to defend themselves is in and of itself unjust, but that paired with the unacceptable working conditions and unjust wages make sweatshops undeniably unjust.
The argument that sweatshops are inefficient seems counter-intuitive given that sweatshops allow companies to essentially avoid labor costs. The facts show otherwise. In 1996, the National Labor Committee proved to Disney that if they were to raise the pay of their sweatshop laborers in Haiti from 35cents and hour to 58cents, the price of an $11.99 garment would rise only 3cents (4). Given this fact, and a recent survey that showed that the average consumer is willing to pay up to 28% more for an item made under fair working conditions proves that, if not inefficient, sweatshops are unnecessary (3). According to some economists, however, sweatshops are inefficient. They make the simple argument that, without a stable and nutritious diet, workers produce fewer goods of lesser quality than a worker paid enough to provide a nutritious diet for her and her family (4). Additionally, the fact that CEOs receive such bloated salaries, such as Levi’s Philip Marineau’s $25.1 million annual salary, exhibits how corporations could clearly remain competitive if their labor costs were to rise as a result of improving working conditions in sweatshops (3).
Since the industrial revolution in the mid 1800’s, sweatshops were considered to be the most efficient way to produce a good; therefore, tradition dictates that they are a company’s best option to stay competitive (1): much like slavery and serfdom, people cannot imagine a profitable economy in which all of it’s workers receive just wages. Additionally, many leading economists support sweatshops; Paul Krugman argues that they are acceptable because they bring work to developing countries (1). Milton Friedman advocates for pure capitalism the way Adam Smith intended, where a company’s only social responsibility is to make money and not to lie. With such support, corporations have grounds to defend their use of sweatshops.
To eliminate outsourcing to developing countries altogether would be unjust, and in many ways, government restrictions would either prevent developing countries from benefiting from any investments or give corporations more new documents to find loopholes in and exploit. Because of these inevitable, unintended effects to government intervention, the change must come from the corporations. Given the fact that significant wage increases would not be detrimental to corporations, it is not ridiculous to expect them to improve working conditions and wages. Through advocacy, a sweatshop free world can become reality.
Works Cited
1: a short history of sweatshops provided by Wikipedia
2: a definition of just wages from the Compendium of the Social Doctrine of the Church
3: arguments against sweatshops found on the Green America Website
4: “Sweatshops – Definition, History, and Morality” by Dr, Matt Zwolinski of the University of San Diego
This is so awesome, Elyse, thank you very much for this thoughtful comment. Let me just briefly respond to a few of your many points.
In paragraph one you mention a GAO definition of sweatshops as any employer who “violates more than one” labor standard. Hmmm. Does the GAO give a pass to those employers that violate just one? When I taught at MUHS I would always urge my students to quit their jobs at fast food restaraunts so they could devote more time to economics and other studies. Do you think GAO would cite McDonalds, say, for making a student work longer than the maximum hours allowed per shift on school nights according to child labor standards for eight days in a row, one violation or eight? Makes a huge difference. My Marquette students routinely ignored my advice, probably because they valued the extra income more than the things I was “preaching” about, but should we employ the GAO’s rather arbitrary definition of sweatshops? According to GOA definition, there are sweatshops in Milwaukee, probably quite a few. Are workers at McDonald’s suffering from unjust wages because they work at an establishment that violates two labor standards?
In the second paragraph it’s mentioned that corporations coming into developing economies exploit the weak. Assuming there is lively competition among local and international employers, I would argue that sweatshops are not undeniably unjust. With competition, sweatshops could be viewed as stepping stones of economic development. I’m also assuming voluntary employer-employee agreements. With coercion, all bets are off. Being forced to work in a sweatshop at the point of a gun is wrong not because conditions are bad or wages are low, but because of the force used to compel work. But if most sweatshop workers are working in the sweatshop because they perceive it to be better than the next best alternative, who am I do declare this unjust?
Productivity increases drive increases in standards of living. When I was in high school back in the 400 B.C. era (just kidding…. I think it was really around 1600 A.D.) Japanese imports were synonomous with cheap junk. My brothers and I would buy this junk, mostly little toys, at F.W. Woolworth’s on Oakland Avenue. Gradually, Japanese workers got more productive as they branched out into electronics, cameras, and autos. Today, nobody talks about cheap Japanese junk anymore. In fact, it looks like the Japanese sweatshops of my era have been replaced by auto factories that may make more and more of the cars we Americans are able to afford. As Japanese workers got more productive, the wage gap between Japanese and American workers narrowed. I would bet that wage costs are pretty close to equal today.
In paragraph three you relate an interesting story about a nonprofit entity telling a for-profit entity how to make a profit. As long as all this was done on a voluntary basis, all the more power to it. But I am very wary of nonprofit government organizations telling private firms how to make a profit. The track record of government-run enterprises is dismal on this score. Exhibit 1: government-run schools. I suspect Disney knows how to make a profit, and that perhaps they were just being polite to the folks at the National Labor Committee. The point about bloated salaries is much in the news lately. Should salaries be regulated by a government agency? A far more substantial rip-off it seems to me are Congressional subsidies of ethanol fuel manufacture which has driven up the price of food for workers in developing countries. I think it is harder to maintain that people in Mexico, for example, are hungrier because Philip Marineau was privately and voluntarily compensated $25 million dollars than because of the billions of dollars of U.S. tax subsidies that essentially requires us to put corn in our gas tanks, and in so doing drive up the price of tortillas in Mexico. Wouldn’t it be far easier too to make a big protest about Marineau’s “immoral” compensation than the immorality of subsidizing the making of gasoline from, ummm, corn and then requiring people to buy it, even at prices below what it costs to make?
In the 4th paragraph you reference the liberal economist Paul Krugman’s defense of cheap labor. He is very hard on those that condemn sweatshops’ low wages. Krugman is not defending low wages because they are low, rather, he is defending them because they are transitionary. Is this compatible with Catholic social doctrine on just wages?
In your last paragraph you write something I whole-heartedly agree with; the goal of a sweatshop-free world. The question of how to get there is crucial. If by advocacy you mean promoting the expansion of economic freedom and the rule of law, what the Church I think in part means by solidarity, then I’m totalling on board. But if advocacy means asking people to sign petitions protesting against unjustly high executive salaries or unjustly low sweatshop wages or to not buy this or that, then I’m not on board. What Pope John Paul II called the free economy is I think the most promising way to transcend current productivity limits and to increase standards of living in developing economies.
It is true that all human beings are to be treated with dignity and respect but this right has often been violated by the use of sweatshops. Sweatshops have been a large topic of discussion for many human rights issues whether or not the benefits outweigh the costs. Sweatshops are not only a problem to the employees, but also a problem to the economy and unintended effects are staggering.
Sweatshops have done a remarkable job of creating enormous empires like Nike and Wal-Mart, just to name a few, who pay their sweatshop workers incredibly low unjust wages. With the use of sweatshops and being allowed to pay employees such unjust wages, companies like Wal-Mart are able to lower their prices; this attracts more consumers and creates a monopoly over other small just-wage companies in the marketplace.
The use of sweatshops creates low prices at many sweatshop-utilizing companies who make fair trade companies seem expensive, therefore making customers turn away before they even know from where their products are coming. Also, the workers in sweatshops are given an extremely poor quality of life as an effect of their incredibly low wages, which turns the issue of sweatshops into a human rights issue as well as economic.
With the costs of sweatshops there are benefits, which are miniscule and do not sufficiently support the use of sweatshops in the world. Some of these benefits would be that the use of sweatshops gives individuals in third world countries jobs, although they might not be the best jobs they still count. In addition, the use of sweatshops makes products cheap for consumers which is convenient but it is clear that the costs of sweatshops outweigh the benefits and the use of sweatshops in not only third world countries but everywhere in the world should be stopped.
Thank you for your comments, Nina. It cannot be argued that in some cases (though not all) dignity and respect for the person has been ignored in sweatshops. This is most often the case in situations where people are forced to work rather than those where they choose to work. Cases in which citizens of a country are forced to work due to government coersion is a form of slave labor, which would make our discussion question moot, so we’re focusing on those cases in which people are not forced to work in sweatshops. Keeping this in mind, we have to ask ourselves why it is that sweatshops can be so successful in developing countries even though they are so controversial. Sweatshops still exist because they have to be providing something that wasn’t available before otherwise people would not choose to work in factories. Continuing with this line of thought, is it really the case that sweatshops are a problem for the economy? Steve Haessler mentioned in a post that sweatshops are more like stepping stones for developing countries. They provide jobs and the potential for better jobs where there may not have been one before. If people can go from no or a signficantly low income to a slightly better one, how is this harming a country’s economy? Benjamin Powell and David Skarbek wrote an interesting paper demonstrating that sweatshops pay their employees well enough that workers have above average standards of living. So even though people may be earning low incomes by our standards, it’s still better than whatever the average is in their country. This then begs the question of how the wages are unjust. If people can choose to work at a sweatshop and survive off of those wages, then they are indeed just. I would argue it even improves their quality of life a little because they can now afford to eat and they know that there will always be money coming in. On the other hand, if a person cannot make enough money to eat, then the wages are obviously unjust. Sweatshops don’t make for a very pretty picture, and nobody’s arguing that. But they do provide the basic tools that people need to eventually make their countries better places to live, and hopefully lead to prosperity. A good example is Hong Kong.
Catholic Social Teaches tells us that every aspect of human life should be treated with dignity and respect. However, in sweatshops around the world, this is not the case. Long hours deprive workers from developing emotionally and socially. Even children are often not able to attend school because they must work to help support their families. Without an education, they can not advance the community, and thus leaving the use of sweatshops in a continuous cycle. Many Americans buy sweatshop manufatured clothing, simply for the fact that it is cheaper to do so. However, these Americans would also want their children to get a good education. Thus, I think by linking both the fact that many children work in sweatshops and can not get an education, and the fact that a huge part of the American culture is education, as seen by the No Child Left Behind Act, majority of the American adults would come to realize the effects of sweatshops; it would then be something to which they could relate, understand the unjust circumstances in which these people live, and how these circumstances affect the rest of the world.
Thank you, Kirsten, for your thoughtful response. It’s true that in countries where sweatshops exist children are more often than not working rather than attending school. But are sweatshops the cause or is it the economic conditions in which people are trying to survive? One of my grandfathers never received higher than a third grade education not because of factories but because his family was living in poverty in the Azores and needed him to earn money so he and his siblings could eat. In situations where suvrival hangs in the balance of every penny earned, education is the least of someone’s worries. This is not to say that school does not matter, but rather that we as Americans value education so highly because we can afford to. In order to understand the situations people in developing countries must cope with, we have to pull ourselves out of the box of American ideas, beliefs, and values and try to see the world from a different perspective. Once we can do that the question we must ask ourselves is: how can the lives of people in developing countries be improved? What role do sweatshops play in the economies of these developing countries? Based on that role, are the sweatshop wages just and/or efficient?
While some economists may see benefits to sweatshops, when one looks closely, she can see that in reality, sweatshop wages are neither just nor efficient. Even though sweatshops allow poor people in third world countries to earn some money, the wages are not nearly high enough to allow them to live comfortably let alone pay all of their bills. Instead, these workers are given pennies, and they must endure conditions that in due time, will get worse rather than better. For all of the work that these people do, they should be paid the correct amount of money. Perhaps if the workers were paid justly, there would be a greater amount of productivity. How can a person nearly starved to death produce to his fullest capacity? The answer is he cannot. Company owners are the people who truly love sweatshops because by paying workers low wages, they can lower their total costs in order to create greater profits. It is their greed that fuels this type of work, and this is unfair. Companies take advantage of people because they know that the desire for work is so great in these developing countries that no matter the wages or the conditions, there will always be people applying. A lot of sweatshops also hire children, and when children are forced to work, there is definitely no justice at all. These kids are much too weak physically and mentally to be doing such hard labor for such long hours. According to Ralph Nadar, businesses have ethical and social responsibilities. He says that they should take care of their employees and give them a safe place to work, and this is most certainly not being done in sweatshops. Also, companies are not stimulating their own country’s economy that much because if the workers are paid little, they cannot put much money back into the economy. I do not see why these employers would not wish to be patriotic and help their own country, especially when it desperately needs it. Perhaps the employers of these companies and the economists who support sweatshops should imagine how they would feel if they had to work in these conditions and were paid these wages. I am sure if they were forced to work in these conditions, they would change their mind. Overall, sweatshops are extremely inhumane, and not as efficient as some economists make it seem to be.
Thank you, Kaitlin, for your comments. You have many very good comments that I’d like to touch on briefly.
First, you make an interesting argument that over the long run conditions for people working in sweatshops actually get worse rather than better. Within the debate about sweatshops, there is a growing argument that these factories act as stepping stones to the improvement of developing countries (the basic premise of the argument being that jobs and opportunity – though not the best ever – are present where there may not have been any before). I cited a study by James Gwartney, a highly respected economist, in a previous post and recently added a link to the PowerPoint presentation at the top of the page. Let’s take a look at his research. In this presentation, Gwartney and Connors collected information from the World Bank to research pay levels in developing countries between the years 1980 and 2005. They point out that in 2005, approximately 85% of the world’s population lived in developing countries. That means much of this data came from countries that have sweatshops. On slide 4 we have our first graph. In 1980, 42.5% of the world’s population living in developing countries was earning $1/day. By 2005, that number shrank to 19.4%. That means that in 25 years we have a 23.1% reduction of people living on $1/day wages. China had a large impact on this data since, as we can see from slide 5, they went from 64% of the population on a $1/day rate in 1980 to 10% in 2005. China had a population of 996.1 million people in 1980 and 1.3 billion in 2005. That’s 1.17 billion people who are earning more than $1/day. If we look at the data for $2/day wages in China on slide 11, it was 88% in 1980 and 35% in 2005. 65% of China’s population in 2005 was earning more than $2/day. I’d say that’s an improvement. On slide 19 there is an analysis of the number of people worlwide earning $2/day. In 1980, 936 million people were earning $2/day – almost 1 billion people. By 2005, that number dropped to 114 million. It’s in our nature to want to see results right away, but something like improving the economic state of a country to pull people out of poverty takes time. China is viewed as an anomaly because they were able to turn around their country in only 25 years. It’s going to take much longer for other countries.
You also make the point that if people were paid more they would be more productive. Such a leap of faith on the part of a company is just that: a leap of faith. If my boss told me he would pay me $1 million/year if I work just a little bit harder, is that really motivation for me to do better? He’s already promised me the money, after all. If my conscience is rightly ordered, I probably would work harder, but the reality is that most people do not have a very good work ethic. That’s why companies give people raises after employees demonstrate that they are capable of performing more tasks. On a more economic note, if companies pay their employees more money in the hope that they perform better so that the company has more money to pay them with, what happens if employees don’t follow through on the deal? The result is that the sweatshop has more money going out than it has coming in and could be forced to shut down, thereby depriving all of its employees of a job.
On a final note, I’ve noticed that many posts have included references to Ralph Nader and the ethical and social responsibility companies have to employees. He’s right that people should have safe places to work, but all of the responsibility cannot be on the shoulders of the company. How do you think Nader would respond to the conditions construction workers work in? I once saw a man wearing only a hard hat sitting in the rafters of a church that was having the roof replaced. Is it the company’s responsibility to put that man in some kind of body suit in case he falls? If that body suit restricts the man’s mobility, he can’t do his job. Employees are responsible for looking after themselves as well. That’s what personal responsibility is about: using common sense to take care of ourselves. It’s true that sweatshops are very dangerous places and improvements can be made. What we need to ask is where we should draw the line. Should a factory be shut down if there’s an accident due to something an employee did? If rules to make a sweatshop safer are ignored, should the company bear the burden of the consequences? It’s easy to say companies have responsibilities, but it takes serious thought to reason our way through what those responsibilities are.
In answering this question, let’s look to the major economic experts. According to Ralph Nader, former presidential candidate and social critic, companies should maximize profit while still remaining ethical. Therefore, Ralph Nader would probably argue that sweatshops are neither just nor efficient because a business would be gaining profit from the loss of rights for the human being. On the opposite end of the spectrum, Milton Friedman, a defender of capitalism, would argue that companies have one social responsibility; to make as much profit as they can, while still following the rules, specifically the law. As a result, Milton Friedman would most likely argue that sweatshops are if not just, efficient, therefore in theory maximizing profit for the firm. I believe that sweatshops are not just, yet they are efficient. It is a sad reality that families are being paid less than a livable salary under harsh conditions. Yet, for businesses, they are efficient because businesses are indeed able to maximize profit. I also believe that if a business or a consumer decides to purchase a product that uses sweatshops, they have to decide if the costs outweigh the benefits. It is the buyer and seller that have to decide if the inexpensive shirt is worth another human’s suffering. Their individual moral compass allows the both the consumer and the producer to evaluate this complication. Furthermore, the reason we have sweatshops is due to the integration between national economies in the world, specifically, globalization. In reality, there are many costs and benefits to globalization. Various benefits include increased trade, and a larger variety of goods. On the other hand, the various costs could include a loss of American jobs, income inequality, as well as sweatshops. In answering the question of whether or not sweatshops are just, you are answering the question of whether or not the costs of globalization outweigh the benefits. Do the costs of sweatshops outweigh the benefits of a larger variety of goods for consumers to choose from?
Thank you, Darian, for your comments. Matt Zwolinski is an expert on sweatshops, and I think it’s important for us to look at his articles linked to this forum. You argue that Nader would say sweatshops remove the rights of the human being, but if a person is freely choosing to work in a sweatshop, is that really the case? It’s a very complicated moral question. And speaking of moral questions, what is the moral obligation of people who need to shop at places like Wal-Mart because they cannot afford to buy clothing anywhere else? Is it right to put the burden of another person’s problems on the shoulders of someone who is stuggling as well? If a consumer does not have control over the creation of goods that a company sells, is it right to hold them responsible for how those goods are made? It’s a difficult situation.
You point out that sweatshops in other countries take away jobs in the United States. You could also say that when farmers hire illegal immigrants they are taking away jobs as well. The reality is that most Americans do not work on farms because there are better jobs available. Why work in the hot sun when you can flip hamburgers at McDonald’s? The same applies to sweatshops. Few Americans will take a job at a clothing factory because there are so many other jobs available. And what about job opportunities for people in other countries? If we were to shut down sweatshops in developing countries, we would be depriving people of work. Miserable work is better than no work at all. I cited an article in the New York Times in another post that I think warrants a second look. In the article, the author interviewed a girl who rummages through garbage in order to hopefully collect enough recycling to buy food. For her, a sweatshop would be a dream come true because she would have a steady income and be indoors. Is it morally appropriate for us to deny her this opportunity?
According to Catholic Social Teaching, the rights of workers should be respected as a result of having dignity for the work performed. Maintaining dignity for work involves workers earning fair and decent wages. The concept of sweatshops goes against Catholic Social Teaching, not only because it goes against the dignity and rights of workers, but because sweatshops are morally wrong. Treating workers poorly in order to gain more profit is unjust, and it represents a lack of respect for God’s creation.
Thank you for your response, Ann. Humans most definitely have a natural right to dignity and respect as human beings. How des this translate to the workplace? How would we define dignity for work performed? Your answer seems to be fair wages, but what is fair? Going back to dignity as persons, if people freely enter into contracts in which they work in conditions that are dangerous, have long hours, and earn low (by our standards) pay, are their rights still being violated even though they made a choice? Likewise, if a person chooses to work in a sweatshop where they earn enough to survive, is this really unjust? Free will has a tendency to complicate things, and these are not easy questions to answer. We also have to keep in mind that this is not a black and white situation of companies taking advantage of employees. It’s a complex formula of poverty stricken countries full of people who are suffering. These people want work, and are choosing sweatshops because they are the best option available. We need to think long and hard about what that means. If people are making choices freely, who are we to stage protests and sign petitions to have sweatshops shut down? Being passionate about issues is good, but we also have an obligation to think through them rationally.
It does not take a lot of research on sweatshops to discover the deplorable wages that the workers make. A living wage provides the minimum dollar amount to meet a worker’s basic needs. That definition does not begin to describe the wage given to a sweatshop worker. Their wages are not fair and just. Greedy business corporations produce products at the lowest possible cost to them by paying in humane wages to their workers. Sweat shop workers toil for a fraction of minimum wages, while business owners take an unfair amount of the revenue. Sweatshop workers can barely survive on their scant wages. If this same work done by sweatshop workers were done in the U.S., they would be paid at least minimum wage with benefits. Owners of these sweatshop businesses receive salaries that allow them to live in luxury, while thousands of their workers are living in poverty.
From the viewpoints of Ralph Nader and Milton Friedman, sweatshop wages are neither just nor efficient. Nader believes that businesses have ethical and social responsibilities. Friedman’s point of view is that businesses should engage in activities designed to increase its profits while acting ethically. Sweatshops go against both of Nader’s and Friedman’s views. This means sweatshops are not justifiable in any society. Business corporations that run sweatshops maximize their profit, and yet they do not pay just wages. Businesses have a responsibility to pay workers just wages, which would in turn, earn them the right to make a fair profit.
People may think the items purchased at Wal-Mart are made in the United States. No, they are not. The majority of the clothing is made in sweatshops from 48 different countries around the world. In Bangladesh, workers earn as little as nine cents an hour making shirts for Wal-Mart. The sweatshop in Bangladesh allegedly subjected workers to work 90 hours a week, for exceptionally low wages, in prison-like conditions. The pay these workers receive is neither just nor fair. Teenagers in the United States who have a job receive more money in a week than a Bangladeshi worker would receive in a month. It is sad to think that a full time employed adult working in a sweatshop does not earn more money than a part time teenager clearing dishes or stocking shelves.
Of course I do not believe that workers in sweatshops earn a just wage. Clearly, greed runs the sweatshops. Sweatshops degrade the workers who spend hours in these awful places. No one should be subjected to such low wages, especially when mega corporations can afford to pay just wages and still turn a profit.
Thank you for your comments, Marlee. I think we need to keep in mind here that sweatshops do not cause poverty, they are merely a symptom. You said that owners of sweatshops live in luxury while their workers live in poverty. This isn’t a case of the rich stealing from the poor. People are poor in developing countries because their economic situations are dismal. It’s when things are bad that sweatshops seem to pop out of the ground. This happens because people are desperate for any kind of work they can find. A couple dollars coming in becuase of a job is a couple dollars that person may not have had if they did not have a job.
Keep in mind also that we cannot effectively compare wages in the United States to that of developing countries. In the United States, the cost of living is much higher and so we have to make more money. I could not find bread prices for Bangladesh, but I could for Kabul, Afghanistan, which has 25 million people living on less than $1/day. The average price of bread there: 21 cents, U.S. currency. The average price for us is almost $1.40. Because it costs more for us to buy a loaf of bread, Americans have to earn more money otherwise we’d be in the same boat as people in developing countries.
On another note, corporations create products at the lowest possible cost because that’s the most efficient way to stay in business. Let’s take a quick look at the economics behind it. If the cost to produce a product goes up, that means a company has to increase the price of a product. If they increase the price and people purchase the product, that’s revenue that can then be used to pay employees higher wages. If people do not purchase the procduct, a more efficient method has to be developed to lower the price again. If people request high wages but productivity does not increase, it means the company cannot make enough of a product to sell to offset the cost of paying for employees. If people stop buying a product, like, say Wal-Mart clothing, it means that there isn’t enough revenue to pay the employees. Corporations don’t pay low salaries because their executives are greedy. Companies are subject to the demands of the consumer. If someone is not willing to pay extra because a product was created in the United States (by people who demand higher wages and benefits because of living standards), that company is forced to find places like Kabul where people need the money and the cost of living is lower so that the company can pay lower wages and generate enough revenue to stay in business and maintain the employees who work in places like the United States – like the checker at the counter or the person who stocks the shelves at Wal-Mart. Sweatshops are dismal places, but they don’t exist because an executive is sitting around demanding a raise. Sweatshops exist because the markets make it more lucrative to have factories in developing countries. And the reason developing countries are the best places to go is because finding people to work isn’t a problem since people need the jobs. It’s quite a vicious cycle. You know, there was a time that the United States was filled with sweatshops. The reason that isn’t the case today is because it became too inefficient for factories to pay wages to American workers. The cost of living increased, and so wages had to increase. If an American is paid $10/hour and it takes two hours to make a shirt, that shirt is worth $20. In order for the company to make a profit and bring in revenue to continue paying that worker, they will have to charge at least $21 for the shirt. If a consumer is unwilling to purchase a $21 shirt at Wal-Mart, it’s no longer efficient for them to have factories in the United States.
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The articles listed above affirm my belief that sweatshops are indeed unjust. What stands out to me most is that some companies have the means to pay a living wage to their workers, but continue to allow their workers to receive unlivable wages and they prolong their work in unsuitable conditions. The fact that they are using money to increase the salaries of their CEOs is repulsive. They are actively allowing a large population to suffer. I feel that this does not represent the Christian ideal of human dignity. By allowing others to suffer, while the means to eliminate or reduce suffering are readily available, is comparable to saying that the population that is suffering is not worth it.
Furthermore, the quest for lower prices is futile because as one of the artcles states, the average person would pay a higher price for non-sweatshop material. By raising the prices of clothing by small dollar increments, these companies could allow the people suffering in these sweatshops to earn a livable wage. This would end the vicious circle of sweatshops; thus restoring dignity to so many experiencing the ill-effects of their labors.
Thank you for your comments, Molly. It looks like embedding the links into your post didn’t quite work…we’ll be working to fix that on the website. In the mean time, could you repost those links as a simple copy/paste of the html text?
It seems that many students have latched on to the concept that wages people receive at sweatshops are unlivable. If we try to reason our way through this, however, the logic doesn’t follow. If I were living in conditions where my options were no job for possible wages (collecting recycling, etc.) or a hard job for guaranteed wages, I would choose a job with guaranteed wages. No person, no matter how desperate, will agree to a job that does not pay them enough to purchase the most basic of all necessities – food – if it puts them in the same position they would be in if they didn’t have a job. Even if I only earned enough money every day – or even every other day – to buy one loaf of bread for my family, that’s a guanteed loaf of bread that my family may not have had. This doesn’t make my life a comfortable one by any means, but it does mean that I am doing what I have to in order to make sure my family members survive. The same applies to people working in sweatshops. Even though wages are not the best ever, it’s enough to put food on the table. Everything else in life is a luxury.
As for CEO salaries, the picture often painted for us by popular culture is far from the reality. Executives are not sitting in their nice leather chairs all day shooting the breeze or playing golf. They work hard to make sure the company can stay in business so that people can get paid. Now, the reason they make so much more money is not because of greed. We have to take into account living standards as well as productivity and the net income of a corporation. Let’s look at living standards first. We’ll say that the headquarters for our company is in Silicon Valley, CA, home of Google, Intel, Yahoo, eBay, and Apple to name a few from the hundreds. As the CEO of a company here, we have to live in the area. In 2007, the average home price in the Silicon Valley area was $830,000. That means that in order to pay for my mortgage, insurance, taxes, general family needs, and all other living expenses, I’d have to make at least $600,000/year. Now let’s look at productivity. Some CEO’s work 16 hours a day, which translates to an 80-hour work week if they decide not to work on the weekend. Let’s say he makes $20/hour, which is a low estimate. That means that in one year a CEO will make almost $100,000. If the company brings in a net income of $100 million/year, his earnings translate to .1% of the net income of the company. And by the way, that $100,000 salary isn’t enough to live in Silicon Valley. In order to meet the living standards, a CEO would have to make closer to $100/hour just so he can live in an area that enables him to show up to work and do his job.
But, we digress since the issue here isn’t about CEO salaries; it’s about whether sweatshop wages are just and/or efficient. Now, in order for a wage to be just, Catholic Social Teaching states that it must be a livable wage (livable means survive, not extra money to shop at nice stores or pay for cell phones). An efficient wage means that the amount one is paid reflects one’s productivity. As an interesting research project, pick a country where sweatshops exist and find the numbers that indicate average pay, cost of living, weekly hours spent at work, and weekly hours spent being productive (getting the job done). Then compare that to a country like the United States. What do the results tell you?
Although sweatshops have become a prevalent component of today’s global economy, they deplete the value of the system because of the unjust wages that companies pay sweatshop workers in order to maximize their profits. By offering miniscule compensation for the employees’ work, the employers drastically reduce their cost for labor, which allows them to reap the financial benefits as a capitalist system technically encourages. Therefore, sweatshop wages could be considered effective for the companies in the short run. However, while the benefits of sweatshops certainly favor the employers and boost their profits, the costs inflicted upon the workers have catastrophic consequences that cannot be ignored. It simply is not worth the costs associated with sweatshops to continue this inhumane practice because it is damaging to the workers, employers, and capitalist system of the global economy. Even without considering the moral issues involved that certainly degrade the practice, sweatshop wages have a negative impact on the economic system through their misuse and domineering effect.
In order for employees to work as efficiently as possible, they must be satisfied and content with their working conditions. However, many sweatshop workers should feel angered and upset that their employers have taken advantage of their services and tried to compensate them with an unjust wage. This resentment will very likely lead to inefficiency in the factories, a decreased quality of product, and, eventually, perhaps even a strike. Unfortunately, many influential companies have become dependent on sweatshops and a sudden halt in production would create chaos in the economic world; the volatility could cause an economic collapse, especially as more companies begin to rely on sweatshops for their products. The workers are clearly harmed by sweatshops, and the hostile feelings that they rightfully feel will threaten the stability of the global economy that allows the world to function. Even if a sweatshop worker is happy enough simply to have a job and does not complain against the oppressive system, the unlivable wage that he receives will repress his future as the cycle of poverty continues. Impoverished people do not have the ability to stimulate and contribute to the economy so they reduce its potential. Even though companies may believe that low wages benefit them overall, eventually the costs will negate any benefit that the company may feel. Much of the general public does not look kindly upon the use of sweatshops because of the moral issues that it creates. Therefore, my experience has dictated that if people are aware that a company employs sweatshops for production, they are not as likely to purchase items from there so the company’s revenue will plummet along with its profit. As this issue becomes more prevalent with time, concern has allowed many sweatshops to be exposed so that the public has what it needs to make a wise, informed decision. Companies are also hurt by the increased supply that results from a boom of producers looking to make a quick profit. In the near future, the equilibrium price will fall drastically in order to accommodate the greater supply of these goods, as will the profits. Because these companies have much lower labor costs than other just-wage employers, they are able to sell their products at a much lower price, which creates a natural monopoly as the moral companies are forced out of business when consumers are not well informed and simply seek the cheapest product to help their budget. When this natural monopoly comes to dominate the market, consumer freedom is limited and capitalism is not upheld. Sweatshops also create increased income inequality as workers receive less pay and companies make a greater profit. As the companies become too powerful, they disregard capitalist values that are cherished by our economic system. Although moral issues are a concern as well, sweatshops wages are unjust on a simple economic basis because they undermine and destroy the economy in unnatural ways.
Thank you for your thoughtful response, Jenny. You are absolutely right that even though sweatshops are not the best answer to the problem of job creation in developing countries, they are so embedded in the global economy that to remove them would prove catastrophic – not to mention disasterous for people who work in them.
When we talk about how companies impact the economy, we really need to consult the numbers. For the sake of this discussion, let’s try to refer to numbers and sources rather than making generalizations. You make the argument that sweatshops are damaging to economies. However, as I’ve pointed out in previous posts, James Gwartney and Joseph Connors conducted a research project demonstrating the improvement of the economies of developing countries over the course of 25 years. Since most developing countries have sweatshops, that would imply that sweatshops are actually helping economies in some ways. The link to this study is at the top of the forum page.
As a side note, everyone, even impoverished people, are capable of stimulating the economy. Even though they may not have as much money to spend as we do, the simple exchange of goods is a stimulation. When a sweatshop worker earns enough to pay the baker for a loaf of bread, he’s stimulating the economy because the baker can then use that money to purchase flour, which goes to the grain farmer, which then pays for the farm equiment and ensures that flour can get to the baker to sell to the sweatshop worker to feed to his family. Bear in mind that the wages paid to sweatshop workers come from international companies, so that’s new money being infused into these economies which, over the long run, will improve conditions as long as the markets are free and people can trade.
And again, I think it’s important that I keep mentioning that a just wage is defined as a wage on which a person can purchase necessities in order to survive. The most basic of necessities is food, which means that a just wage enables you to purchase food. Catholic Social Teaching also mentions the dignity of the person, so what we need to ask ourselves is if a person is freely choosing to work in a sweatshop, has their dignity been compromised? Free choice makes this a very complicated question.
Are sweatshop wages just and efficient?
In short, no; sweatshops may be efficient for a company, but their wages are not just. As Wikipedia said, sweatshops are “dangerous” and expose employees to “harmful materials, hazardous situations, extreme temperatures, or abuse from employers. Sweatshop workers often work long hours for little pay, regardless of any laws mandating overtime pay or a minimum wage. Child labor laws may also be violated.” Some say that a sweatshop provides an alternative for those in third world countries, but does it really? Do those people actually have much of a choice? Well, not exactly. Believe it or not they really aren’t working in sweatshops just for fun, but are working under these harsh and cruel conditions for survival. These people have no other option of better work. Compared to prostitution or theft, a sweatshop does not seem that bad, but to put workers’ lives in danger so that a company can make more profit seems like a very selfish and irresponsible thing to do. If a woman or child were to lose his or her job, there is a great chance he or she will be abused at home. I know these families are struggling to survive, but I would not tolerate the practice of working children in such harsh conditions for such a long time. This is completely unjust. But what if they are the main source of money for a family? I would say that the solution would be for the government to give them financial support, but I know many governments would not agree. These people are desperate for these jobs because they have no other option. They have no access to better working conditions and have no chance of sending their children to school or even getting an education themselves. I believe every human has the right to be educated. Any educated individual would not argue with me when I say that education is important and that knowledge really is power.
I am not saying that all sweatshops should be closed, because I know that would have devastating effects on those people and companies, but I am saying that the employees should be paid a few more cents an hour and have a safe environment. Eliminating sweatshops would not allow the ability of communities to rise out of poverty, but these communities would fall down deeper into poverty. If sweatshops were to continue with the current wage, the employees would be stuck inevitable in a cycle of poverty. If companies were to pay each worker a little more, then countries could truly come out of poverty faster and I believe it only takes a few cents more. Those that make the product get a very small percentage of the profit. One could easily pull a few cents from the extra money that would be spent on raw materials, or a few cents from the CEOs of the company. Companies could actually benefit from this because their workers would eat better, sleep more, and be happier which would add up to each individual being able to maximize his or her production.
As a consumer, I try not to buy anything from sweatshops, but always trying to figure out what someone was paid and in what working conditions they made this product can be a challenge. It’s like trying to find out if the milk products I buy were from cows injected with hormones that supposedly make the cow die faster. I wonder if it has the same effect on humans. If there were labels that would just straight up say what the cow consumed, it would make consumers more aware of exactly what they are buying. But that is a discussion for another day. The point is, I would greatly appreciate having informative labels that say, “This was made in a sweatshop by a 13-year-old girl who was paid $0.30 this day.” That way, it would be completely up to the consumer whether the product is worth the price or not.
Thank you, Cristina, for your response. It looks like you put a lot of thought into this and looked at the provided reading materials. You mention in your comment that people really don’t have much of a choice in deciding to work in sweatshops. The tricky thing is, choice is choice. The person is presented with the option of not working and maybe finding money somewhere or working and receiving a paycheck guaranteed. Even thought sweatshops aren’t ideal workplaces, they are an option, and as an option (not an element of coercion or foce), a person has the ability to choose; to weight the pros and cons, opportunities and consequences. The reason people in developing countries do not form unions to strike or seem content to work in a sweatshop is because that sweatshop really is an option they prefer over beggning in the streets. Keep in mind there’s an element of hope going on, too. When someone has a job and earns an income, it’s a morale booster. That boost in self confidence leads to pride in what one does. Pride leads to hope; hope to opportunity.
You make the suggestion that the infusion of money into the economies of developing countries could help to improve living standards and alleviate the sense of need to work in sweatshops. We have to be careful here, however, because a simple infusion of money (from the government itself through printing or from other countries) can easily lead to inflation. The realtionship between cost of living and the value of money sits on a very sensitive scale. If more money is injected into the economy, the short-term result would be that people have more money to spend and so can afford a better lifestyle. What happens then, however, is that the cost of goods increases because people have the resources to spend the money. As prices increase, there becomes a need for more money to meet the demands of costs. If too much money is injected too fast, the value of the currency will plummet and the cost of living will skyrocket and inflation will kick in.
Your point about increasing wages is a good one. However, it is not efficient for companies to pay higher wages to employees if they continue to produce the same amount of goods. In order for a company to be able to increase wages, more of a product must be sold and in order for more of a product to be sold, productivity has to increase. If there is no increase in productivity on the part of the employees, then the company will not be able to increase wages. And the company can’t simply increase the price of a product because there’s competition in the market and consumers are only willing to pay so much for certain goods. It’s quite a complicated balancing act that companies have to deal with and sometimes in order to stay afloat it becomes necessary to open sweatshops where the cost of living is lower and so wages are lower, which enables the company to lower the cost of the product so that people will purchase it and the company can continue to provide jobs.
Overall, I do not find sweatshop wages to be just. Companies and manufacturers try to maximize profits as best as they can, often times not regarding the treatment of their employees. I understand that companies and manufacturers need to make a profit in order to survive, but there is a point where a line has to be drawn. Companies and manufacturers need to realize that their workers are human beings and that their well being needs to be taken into consideration. Even though the majority of sweatshop workers lives in poverty and barely makes enough to provide for them and their family, there is no justification for the poor conditions under which they work. Although this situation is bad in the United States, in other parts of the world it is much worse. In a report published by the National Labor Council, a study was conducted on wages and expenses for workers in sweatshops in Nicaragua. It stated in the report that the base wage for workers was ten cents an hour, which translates into $4.80 a week, $20.90 a month, and $249.60 a year. The wages which these workers are receiving is shocking; no one can live off of that small amount of money. All around the world sweatshop workers are facing the same problem- they work as much as they can, yet it is not enough to provide for themselves or their family. From a business perspective I understand why sweatshops are efficient. Many businesses turn to the usage of sweatshops because of their ability to maximize profits by minimizing the cost of labor. According to Nadar, businesses should have ethical and social responsibilities that they own to their company. While on the other hand, Friedman believes that businesses should not have ethical and social responsibilities and that the purpose of a business is to increase profits. Economically speaking, sweatshop wages are efficient; ethically speaking, sweatshop wages are inefficient.
Thank you, Sarah, for your well thought-out response. I was impressed to see that you did some additional research and found out the average wage of workers. Keep in mind, though, that we cannot compare those wages to what we need to survive in the United States. Nicaragua is an exceptionally poor country. In order to prove or disprove your theory that no one in Nicaragua can live on those kinds of wages, try looking up the average cost of living or even what it costs to purchase bread. Our numbers mean nothing unless we have a context in which to put them. The results might surprise you. Keep in mind also, that poeple are rational beings. Nobody would choose to work in a sweatshop if they weren’t able to live off of those wages.
As an economist, Nader should know better than to attempt to talk ethics. The responsibility of economics is to measure markets, not determine the moral obligations of companies. That responsibility falls to moral theorists, theologians, ethicists, etc. Keeping that in mind, Friedman is absolutely right that the only responsibility a company has, economically speaking, is to provide a profit. Companies are not created to contemplate the meaning of morality and ethics. Companies are created to provide goods and services to consumers.
It is expensive to be able to have all the necessities to live for one’s self, and even more expensive to have to provide for an entire family. Many of us take for granted what we have and even wish we had more. But what would happen if that salary was reduced to nearly $1.00 a day? How would you be able to comfortably survive? While we are not forced to put ourselves in this situation, many others around the world are. This is the harsh reality of sweatshop workers today and it is unfortunate and unjust.
According to Ralph Nadar, businesses should treat their employees well and according to Milton Friedman, businesses must take part in open, free competition without deception or fraud. Sweatshops go against both of these beliefs completely. The standards of the employee’s work environment are exceptionally low, they are mistreated, and barley earn any money. They spend the majority of their day doing intense labor and are not fairly rewarded for it. Just because they chose to work in sweatshops, does not mean that the conditions under which they are forced to work are acceptable. For many, this is the best job they can get, therefore, since they are working, their lives should be getting better, not worse, The companies should see that it is their responsibility, morally and as a business, to provide them with enough to better their lifestyle. The costs of living around the sweatshops may not be as expensive as it is in the United States, yet they are barely making enough, if enough at all, to get by.
Large corporations use products made in sweatshop factories in order to keep their prices low. This in turn will put them ahead of the other competitors in the market as well as increase their profit. By making a profit, I mean companies like Nike, and others who support sweatshops, will make a profit; the actual workers will not. They are paid hardly anything compared to the managers and CEO’s of the company. Consumers will decide to make purchases at whatever store has lower prices, which will then rid the market of the smaller competitors who are actually treating their workers fairly. Do the benefits really outweigh the costs in this situation? In my opinion, they do not. We may have to pay a little more than what we would like in order to keep businesses that treat their workers well open, but that is better than buying something cheaper, knowing that the person who made it had to work through poor conditions and receives an extremely small percentage of the profit as a reward.
If running a business means you to treat workers well, then any company who uses sweatshops is not fairly running one. No matter what type of method you use, the Nadar or the Friedman, you are still entitled to provide workers with a safe environment, and pay them adequately for the amount of work they do. People need to continue to stand up towards large corporations and monopolies and further support smaller companies who do treat workers fairly in order to diminish the existence of sweatshops.
Thank you, Sarah, for your comments. You make a very good point that $1/day may not be enough to enable a person to live comfortably, but is comfort really what we should be focusing on here? Also, comfort is an intrinsically relative term. I’m not trying to nitpick what you’ve said, but rather get us to critically think about what we’re saying. So let’s give it a shot. If our argument is that $1/day is not enough to live comfortably, let’s think about the conditions in developing countries that people are already living in. Misery and disaster are present almost anywhere you turn. People may be living in huts rather than actual homes or begging on the streets. Clean water may or may not be available and where someone will find their next meal is a guessing game. Comfort is not an option in these conditions. And now we’ll have a clothing sweatshop enter the picture. One of the jobs available is for women to sew the fabric pieces together. The sweatshop probably doesn’t have air conditioning and electricity might even be questionable (if people can’t even get the necessity of clean water, electricity is out of the question). So now women can work for $1/day at sewing machines and can rely on a paycheck coming in every week or month. Now, instead of begging on the streets or dumpster diving in the next town over for a meal, the woman can now save her money to buy a halfway decent meal for her children. This is not by any means “comfortable” but it means a world of difference for this woman and her children. It’s the difference between starving and having the resources to know you’ll make it to the next day. There’s no two ways around this situation; it’s a tragedy and nobody should have to live this way, but people do. So I’ll ask again: should we really be focusing on comfort? How does this new perspective impact our decision on whether or not the wages are just?
Futhermore, it’s interesting that many people are picking up on a concept that businesses have a moral obligation to help make people’s lives better. I disagree. The primary function of a business is to provide goods to consumers, not wage a war against poverty. If an organization wanted to improve lifestyles, it would be classified as a non-profit. Now, since a business is supposed to produce goods, that means it must function efficiently enough to sell the product at a reasonable price and generate enough revenue to pay its employees. A company cannot simply go into a developing country, build a factory, and pay exceptionally high wages for that region. If that were the case, the company would probably have to increase the cost of the goods they sell. If the cost rises too high, consumers will not purchase merchandise from that company. So, wages must reflect the cost of living for a particular area. Wages must also reflect the efficiency of a company’s employees. If employees are more efficient and can generate more goods in a given amount of time, that’s more goods to sell and more revenue coming in which can then translate to higher wages. Nobody is arguing that sweatshop conditions are miserable, but we have to look at this objectively in order to understand why wages seem so low to us. Even if someone is working exceptionally long hours sewing shirts together, what matters isn’t how much time they spend sitting at the sewing machine but rather how many garments are produced. After all, if all money coming into a clothing company is dependent on how many garments they can make and sell, they have to figure out how long it takes someone to produce an item, how many items people generally make in a day, what that should translate to in terms of wages for a given area taking into consideration cost of living, and how much consumers are willing to pay for an item. It’s quite a balancing act. Just for fun, try to do a research project for a developing country in which you analyze the numbers concerning cost of living, average wages, average time it takes employees for produce one item in a sweatshop, and how much that item sells for on the market. It could turn out to be very interesting.
Although some may argue sweatshop labor and wages are efficient, they are in no way just. The globalization of the world has brought trading and international relations closer than ever, constructing a system where each country is dependent on the next. With these close ties, countries are likely to realize the simple fact that they can pay workers in a different country a much lower wage than in America, increasing their overall profits. This higher paying alternative is attractive to individuals who have one thing in mind: profit. By taking advantage of the global differences in minimum wage, these business owners are able to create a higher income for themselves. This plan of action seems to be more efficient when looking at profits, but coincides with neither the Nader nor the Friedman view on businesses. Both views reflect the belief of possessing good moral standings along with making a profit. Accordingly, sweatshop wages may be efficient for the business owner, but are not in any way just. When looking at sweatshop wages from a moral standpoint, it is a much easier question to answer. The Catechism of the Catholic Church states a man is entitled to a living wage or enough money to support him and his family. While one may argue that the wages paid to these workers provides them with enough to live, the wage does not justify the treatment of these workers. I believe that by the standards of the Church, the Nader view, and the Friedman view sweatshops are extremely unjust although the debate on efficiency still stands. Knowing this poses a challenge for me, a test in living out my faith- where do I shop? It becomes a battle to realize I should not support sweatshops by buying their products, but it is hard to get away from. It is not often that you see “sweatshop free” on your favorite shirt, which puts me in a position to really examine my moral compass. I think although many people acknowledge the fact that sweatshop labor is unjust, they refuse to act upon their beliefs, causing a never-ending cycle for this enterprise.
Thank you, Libby, for your response. Contrary to what the 1987 film Wall Street conveys, businessmen and the CEO’s of their coporations are not greed-cosumed monsters looking to make their wallets bigger any way they can. Profit plays such a large role in the business world not because of greed but because profit is necessary to keep companies in business. Without profit, there is no revenue with which to pay the bills to keep a factory open, cut checks for employees, pay taxes, etc. Profit is to a company what wages are to an employee: the means by which to stay alive. The reason CEO’s are paid so much is because the responsibility of keeping a company in business falls on their shoulders. If they fail, so might the company.
You are right that from a moral perspective there are probably cases in which the treatment of employees does not justify their pay. However, we cannot, morally speaking, put a price tag on effort of employees and treatment by supervisors. That falls to the realm of economics and the question of efficiency.
As for the moral challenge you face, it is a difficult one. This is not a black and white case in which we simply choose not to shop at businesses that utilize sweatshops. We have to take into consideration what is financially responsible for our families. If it is financially detrimental to pay for more expensive goods like clothing, then we should seek out places that have prices more within our range. If there is enough money left over after paying bills and attending to other financial responsibilities to purchase slightly more expensive goods, then that’s fine. But for people who struggle from one paycheck to the next, it’s unwise to purchase more expensive items because every penny counts.
Sweatshop wages may be economically efficient and sensible to an employer, but they are morally unjust. Many companies today are offshoring jobs to underdeveloped countries because the people of these impoverished nations are willing to take any job offered to them because of their dire straits and need to survive. But the people taking these jobs and working in the sweatshops are being unjustly paid and treated for the work they do. While they may be able to survive off of the extremely low wages they are given, are they really living? The answer is no, they are not living their lives as they more fully would be if they were paid as justly as Americans are per the minimum wage law. Though some companies today are finding that for them, the benefits of sweatshop labor outweigh the costs, I believe that the costs clearly outweigh the benefits. Sweatshop labor should be put to a stop because while it helps the already wealthy CEOs of the companies who resort to using sweatshop labor, it is slowly deteriorating the lives of those actually doing the work for just pennies a day.
The costs for providing sweatshop jobs is enormous because a company employing people to work in their sweatshop continues to pry away at the dignity of the poverty-stricken people they choose to employ, being that they force them to work under such horrifying conditions and for such minimal wage. But, from the standpoint of a company looking to lower their cost of labor, sweatshop wages are a large benefit because of their dramatically lower cost to offshore jobs and pay sweatshop wages, which are just pennies a day as compared to keeping those jobs in the United States and being forced to pay minimum wage, which is around six to seven dollars an hour.
Sweatshop wages also are in clear disagreement with the views of Ralph Nader, who believes that businesses have a social responsibility to their employees to pay them a livable wage and provide them with the benefits they need to live a comfortable lifestyle. While the wages paid to sweatshop workers do in fact keep them alive, again, they do not give them any freedom to truly live life. They only provide their workers with enough money to barely get by and stay alive. How do company CEOs see this as being morally just?
An alternative to companies paying sweatshop wages could be for them to just slightly heighten the retail price of their goods so that they could see it financially feasible to raise the wages of their workers. If the price of a good raised just one or two dollars at retail price, it would most likely continue to sell at the same level it did prior to the price rising. The extra money earned from raising the prices of goods sold by companies employing sweatshops could be used to better the lives of their employees, because as it presently stands, those employed at sweatshops are mentally and physically withering away while working in such conditions involving extreme heat, long hours, and no breaks while working, among many characteristics of sweatshop labor.
Thank you, Maria, for your comments. The sad thing about minimum wages is that even though it’s more money coming in for people, it causes inflation. If people have to earn a minimum dollar amount, companies respond by increasing prices of goods because they have to pay their employees higher wages. The value of a dollar does not increase because someone is paid more.
The reason why sweatshop employees are paid pennies every day compared to Americans is because the cost of living for Americans is so much higher. Referring back to a previous example I made, the cost of a loaf of bread in Kabul, Afghanistan is 21 cents as opposed to $1.40 for Americans. If the sweatshop worker in Kabul only needs 21 cents to purchase a staple food, then there is no reason for him to be making $20/hour. If one day the government in Afghanistan decided that all workers should earn a minimum of $7/hour, the result would be disasterous. Printing more money in order to pay people means that the value of the currency is going to drastically decrease (the more of something there is, the less valuable it becomes). Now, in order for companies to stay in business so that they can distribute this new money to people, they’re going to have to significantly increase the price of goods to cover the cost of producing goods and paying employees. When prices spike like this, what we have is inflation. The value of the currency has decreased becuase it takes more bills to pay for what used to cost fewer bills. As prices rise and people are still waiting for the effects of the $7/hour policy to kick in, it becomes more difficult for them to pay for what they need. Now, eventually things will probably balance out in Afghanistan. But what happens when people start demanding $8, $9, and $10? Minimum wages start a vicious cycle of increased cost of goods and decreased currency value. This doesn’t change the fact that living conditions are miserable in developing countries, but it does put things into perspective for us. Also, I highly recommend you take a look at the document I’ve attached to the forum that was written by James Gwartney and Joseph Connors. The data demonstrates that economic conditions in developing countries are improving. What this means for us is that sweatshops aren’t making conditions worse. They’re actually playing a role in making things better for the economies of developing countries. And if economies are improving, that means the living conditions of citizens are improving.
The question asks if sweatshops are “just and efficient,” but those are two very different terms with two very different connotations, and oftentimes, employers can only succeed at one of those qualifications, or have been unable to find a way to blend them. Many corporations see operating a just company as sacrificing efficiency and profit, and that the terms are mutually exclusive and one cannot exist while the other is present. Others find themselves working with a just company that is not efficient or profitable, and must rely on donations or become a not-for profit organization. Opposite of other large corporations, they sacrifice money and profits for the betterment of their workers and for the operation on a just business.
It appears that companies can either be jus or efficient, and that there is no way to run a business that accomplishes both goals. Such is evidence in the prevalence of sweatshops – company executives interested in making money believe that they have few alternatives to sweatshop labor or other means of increasing efficiency at all costs, because a business can’t be both just and efficient. Sweatshops prove to be the most efficient workplace, as is supported by the literature provided here, and so it’s logical for corporations to use them. But one must examine the point of a factory, the point of a business. Today there is so much importance placed on the individual at the head of the company garnering a huge profit that another, equally important, part of a business gets pushed aside: providing meaningful, wage-providing jobs to people. Each “business,” whether it’s a clothing retailer, a school, or a government, employs people who become the heart and soul of said business, and without whom it simply count not function. But as more importance is placed on gaining profits, employees become ignored, and the main point of running a business shifts from providing meaningful employment simply to getting cash.
Though sweatshops are clearly efficient, they are in no way just – they do not provide workers with enough wages to cover anything more than their basic necessities, and sometimes not even that much. A company has a responsibility to protect and provide for its employees, and sweatshops do not accomplish this goal. Executives need to realize that there are ways to blend both efficiency and justice in the workplace, and that they need not sacrifice one for the other. Most importantly, they need to realize that their business doesn’t just impact them and consumers, but also the producers and employees down to the lowest rung, and a business must provide for all those involved in it.
Thank you, Amanda for your post. I’m glad you picked up on the complexity of the discussion question. By asking whether wages are just and efficient, we are looking at how sweatshop wages can be evaluated both morally and economically. Both are very complex. How do we weigh the fact that jobs are provided where there may not have been any before against the fact that the conditions people work in are not very good? How can we get past the standards of our own living conditions to see how people live through the eyes of citizens of developign countries? What does Catholic Social Teaching tell us about just wages and what does it not tell us? How do we apply that to sweatshops? What’s efficiency and how does that apply to sweatshop wages? You are right that the balance between just and efficient is a difficult one. Is it really the responsibility of a company to protect it’s employees, though? I’m curious what exactly you mean by protect. Do you mean financially or the working conditions? When it comes to finances, the responsibility to look after employees does not fall to the company. If a just wage is being paid, what is done with that wage, no matter how small, is the responsibility of the employee. When it comes to safety, we have to ask where the line is drawn. I’ll reference Nader here since so many people are doing it. He would say that a company has a responsibility to protect an employee from all dangers. The construction worker sitting in the rafters of a church that I mentioned in a post should be wearing harnasses or some other kind of protection, even at the cost of being able to efficiently do his job. What we need to consider is whether that’s really a reasonable suggestion or protectionism to the extreme. I would argue he takes it too far. The company should provide some safety for it’s employees, but some of the responsibility falls to the employee as well. Dangerous working conditions require common sense and a level head. If someone has neither, then it’s their fault if they get hurt. Sometimes sweatshops don’t provide the most basic of protection, and I think that’s where they go wrong. So what we have here is a very complicated question for an even more complicated situtation.
According to a dictionary, a sweatshop is a shop that employs workers at low wages, for long hours, and under poor conditions. Not only is this unjust and unethical, but it jeopardizes the human dignity of the workers in the sweatshops. Sweatshops are becoming a larger issue in the society today because more people are finding the way the workers are treated to be inhumane, yet the corporations are making a large profit, making it difficult to close sweatshops. However, more findings are showing that the costs of running sweatshops are outweighing the benefits of running sweatshops. Benefits are hard to uncover while researching sweatshops because of the disturbing conditions the people work in and the unfair wages they are paid. Although there is one major benefit that causes many controversial problems, profit. Because of sweatshops, large corporations, like Wal-Mart, are able to produce many products that are low in cost. The low prices of the products made from sweatshops tend to attract more consumers rather than the higher prices of smaller businesses, or fair trade stores. Since people are more willing to purchase items for cheaper prices, this causes the overall profit of the corporation to increase. Increasing profits create many excuses for executives of major corporations to justify sweatshops. However sweatshops are polar opposite of being just. Sweatshop workers are paid pennies a day, while people like Tiger Woods have multimillion dollar contracts for advertising the companies products. Due to the fact that the people who work in sweatshops are paid low wages, they are unable to live a comfortable lifestyle. At home the people struggle with money situations and at work they struggle with being recognized as a human being. Another thing the workers are deprived from while working in sweatshops is workers benefits. They do not receive luxuries like workers in the United States.
From the viewpoint of Ralph Nader, sweatshop wages should be efficient and just, however this is not the case in the sweatshops in the third world countries today. Nader believes that businesses have social responsibilities and should run a company in an ethical way. The way in which sweatshops are run do not follow any social responsibilities because of the conditions in which they work. The workers are also failed to be treated with the respect which is deserved. On the other hand, Friedman believes that businesses should increase profits while acting ethically. Sweatshops would be on the fence with Friedman because the profits are great, yet the sweatshops are run unethically.
I do not believe that sweatshops are acceptable in today’s society. Sweatshops are run by money obsessed people who fail to care for their workers. We are taught that everyone should be treated equally and we should all have an equal chance of success, however this is hypocritical in the case of sweatshops. How can the world change for the greater good if the leaders of the world allow a separate unjust world to exist?
Thank you, Hilary, for your comments. It’s true that conditions in sweatshops are atrocious and that socially there isn’t much going on that could be called just. But are the wages just? The Compendium of the Social Doctrine of the Church provides a definition of just wages that’s linked to the forum page. What I like most about the Church’s definition is that it’s wisdom is demonstrated by the fact that there is no monetary amount declared. Rather, the definition of a just wage is, basically, that which is livable. It is, of course, a little more complicated that that, but take a look at try to puzzle through it. It might be surprising how difficult our discussion question becomes.
I found it interesting that you referenced the contrast between Tiger Woods and his multimillion contracts and the comparatively lower wages of sweatshop workers. The reason there’s such a huge difference is because of the economic conditions of the countries as well as demand for a field of work. Tiger Woods is rich because very few people can golf as well as he can. It’s true: he gets to go out on the green and play for a living. But the reason he gets to do that is because people enjoy watching him play and there’s only one Tiger Woods in the world. A job in a sweatshop, however, may be in high demand by people who need work, but it’s easy to replace wokers. So, because of the poor economic conditions in developing countries and also because turnover is so easy, sweatshop wages are lower. This is where we also have to consider efficiency of wages. How many of a product can a person produce in a day and how does that reflect on how many items the company can sell?
A brief note on Nader: he also believes that companies should go to any length to keep their employees safe, even if it would be detrimental to the company. When we study what other people have to say, we have to do it in a prudent way. While safety is good, how far is too far? When he talks about companies having social and ethical responsibilities, what is he really thinking? What does he have in mind? How prudent is he being?
We should also be very careful with generalizations. There’s been a trend in posts to mark executives of companies as greedy monsters like those in the film Wall Street. I know people who are trying to run their own businesses, and they don’t come across as money-hungry people who would stop at nothing to make a buck. Just because an executive has a high salary doesn’t mean they’re “money obsessed” or that they didn’t earn it. Executives work much harder than you and I and they have a much heavier burden to carry.
You make a very good point that injustice in the world will never go away as long as places like sweatshops exist and people don’t have the opportunities for success that they deserve. The sad truth is that while everyone should be treated equally as human beings, there will always be people who don’t have the opporutnities we would like them to have. That’s why hope is so important. There’s an interesting passage in the Bible in Deuteronomy 15:11: “The needy will never be lacking in the land”. We may never be able to end the existence of sweatshops, but if we do what we can to help people then it will help reduce the number of sweatshops.
Major brand name corporations such as Nike and Wal-Mart use overseas labor in sweatshops in order to get around the United States labor laws, but because these well known companies do, this does not mean that it is a just solution for the success for the corporation. If something is just, then it means it is “guided by truth, reason, justice, and fairness,” but for these companies to say what they are doing is just would be an inaccurate statement. No matter what country the labor is placed, there is no reason why workers should be forced to work 60-80 hours a week under unsafe conditions at not even a livable wage. This proves selfishness on the company’s behalf because it says they are willing to persecute innocent people in order to gain success for the company. Someone who values personal financial benefits over the human life of another has a questionable moral code. Not only is sweatshop labor morally wrong, but it is causing a bad reputation on the United States. If the United States does not allow sweatshops within our own borders, what makes it okay for U.S. companies to travel overseas and create them?
One excuse that companies may use to justify what they are doing is that it is highly efficient. It may seem that sweatshops are efficient because of the enormous amount of work for the little amount they pay their employees; therefore, the benefits would out weigh the costs in the eyes of the company. The intended effect is the ability to lower the company’s prices of his or her product because of the cheap labor costs, but the unintended effect is that many people are loosing education opportunities because they are too busy working, loosing resources because of the lack of money to support themselves, but most importantly loosing lives because of the poor conditions in which they work. Sweatshops seem to be efficient to corporations, but they are extremely unjust to anyone with a moral code.
“Just definition | Dictionary.com.” Dictionary.com. 21 May 2009 <http://dictionary.reference.com/browse/just>.
Thank you, Kelsey, for your comments. You’re right that the working conditions of sweatshops are unjust, but what about the wages? If people are choosing to work in these conditions, what does that say about the wages they are agreeing to be paid? When people freely make decisions, it complicates questions like the one we’re discussing. One of the questions that arises out of the fact that many people choose to work in sweatshops is whether or not it is morally appropriate for us to suggest that the factories be closed down. If we do that, we’re effectively telling these people that their decisions don’t mean anything. In a way, we’d be acting unjustly towards them.
We need to note too that most of these people will never set foot in a classroom even without the sweatshops in their countries. Children are often with their parents begging for food and trying to find a way to survive. The reason we are able to put so much emphasis on education in the United States is because our country is more stable. It isn’t because we used to have sweatshops and then got rid of them. And keep in mind that companies from the United States are not the only ones building sweatshops in devloping countries. Countries like China often have many of their own sweatshops.
On a final note, review some of my comments about how wages are determined in sweatshops. It’s a complicated formula that includes the economic state of a country, the efficiency of the employees, and customer demand for a product. Companies lower their prices not because they want to but because consumers are not willing to pay higher prices for that company’s goods. If a company could charge more for a product, there’s no doubt that they would since it would mean higher profits. What stops them is that people will not pay the prices if they go too high. It isn’t a simple matter of greed.
Just Wages
While sweatshops seem cruel and unjust to those of us looking into this establishment, they do not go against Milton Friedman’s view of economics. He states “there is one and only one social responsibility of business-to use its resources and engage in activities designated to increase its profits so long as it stays within the rules of the game, which is to say, engage and open and free competition, without deception or fraud.” Companies that have sweatshops stay true to this responsibility-to make a profit. The employees are not forced into getting a job; rather they work for these companies out of choice. They are not enslaved, though many believe the amount of money the workers receive is about the same as being a slave. We as Americans find the $.14 a day unbearable, however, we forget that these people are not living in America, rather more developing countries such as India. Price of living is much different; it is almost incomparable to that of living in the United States. Economically, sweatshops do their jobs as economic businesses, in the eyes of Milton Friedman.
Although sweatshops seem to be okay in terms of economics, morally, they are unjust. Replacing the stance of economic justification, with that of a moral standpoint, the people working in sweatshops deserve an immense increase in their pay. There is no excuse why big companies such as Nike do not pay their workers a more of a salary. While these people do not live in complete poverty and homelessness, are pretty close. Their days stretch on for 18 hours with few breaks to use the restrooms and get food and water. Often there are children working in these factories, working these harsh hours, to try and provide for their families. With little very few options to get better work, these people generally have no alternative other than the sweatshop job. The options are either work for minimal pay and provide some of the necessities for themselves and their families, or live in complete poverty, starving with no work. The sweatshops at least provide a small source of income, but consume the persons’ life with work 6 days a week, all day. If the owners of sweatshops would give their employees a sixth of each product they are selling to people in the U.S. the living conditions of the workers would exponentially better. However, the companies are too money hungry. Not caring about the lives of their workers and focusing only on the well being of themselves. So pick a side, that of Milton Friedman and the laws of economics, or the side of morality, and improving peoples’ lives. You chose.
Thank you, Jessica, for your wonderful comments. You’re right on track when looking at wages from an economic perspective. Efficient wages have nothing to do with how we feel. It’s about how they relate to the economic conditions of the country or region; what the cost of living is. Don’t let your feelings get in the way, though, when looking at whether the wages are just or unjust. The question remains when looking at the morality of wages whether those wages are livable or not. The first part of your post argues that the wages are indeed livable. Companies like Nike don’t pay their employees more for the reasons you already stated. We also have to take into consideration the efficiency of the workers. Nobody denies that they work long hours in difficult conditions and that’s not right, but how much are they able to produce of a product? If I’m working 18 hour days and can only produce three shirts in one day, it isn’t economically wise for the company to pay me more since they can only sell the three shirts I made. If a company spends more than they can take in, they’ll end up going bankrupt. Also keep in mind that there are cultural reasons why we only work five days a week and some people work six. This is actually the practice in Asia. Students, for example, attend school for six days and only have one day off every week. Their summer vacations are also shorter than ours. This isn’t because of cruelty or apathy on the part of the government. It’s because that’s how they prefer it. And it’s possible that in Asia they’re more efficient that way.
On a final note, we need to be careful about labeling companies as money hungry or the executives as greedy. Companies are ultimately ruled by the demands of the consumer. If people are unwilling to purchase goods at certain prices, then the company needs to adjust accordingly. Profit plays a huge role in decisions that executives make, and there’s no doubt about that. But it isn’t profit motivated by greed. It’s motivated more often than not by the need to make sure the company survives to the next week or the next year and in order to do that they need to turn a profit.
The horrors of sweatshops though not often featured on the nightly news or published in newspapers, are used daily to maximize profit by almost every company in the United States. Due to the way in which sweatshops have become ingrained into the manufacturing culture of today, many companies suffer no consequences for the use of sweatshops and slave labor within their workforce. The use of slave labor not only infringes upon the moral responsibility of a human being, but also upon the ethical responsibility of a business.
The founding fathers of business ethics, Ralph Nader and Milton Friedman, have two conflicting views of the social responsibility of a business; however neither one conveys any sign of support for the use of unjust wages and unsafe working conditions. Nader’s beliefs reflect that a business has a responsibility to it’s customers to consider the quality of life of the workers they employee. The wages workers are paid in sweatshops are so low at times they are referred to as starvation wages, this use of unjust wages is in direct violation of the ethical beliefs about the quality of a human life held by Nader. Friedman’s beliefs support the idea of turning a maximum profit without deception or fraud. Companies who use slave labor cheat their workers out of the wages rightfully earned. Although in a strict business sense these two men might seem to have polar views on ethics it is evident that neither set of beliefs represents slave labor as an ethical business practice.
As in the nature of life there are exceptions to every rule and some companies in the United States choose the ethical path over the use of slave labor. Companies such as Ben and Jerry’s and New Balance, are both socially conscious and economically successful at the same time. The New Balance Corporation, a slave labor free company, is also a top competitor to the Nike Corporation that is world wide know for being one of the worst offenders of slave labor and more importantly child labor. With the success of the New Balance Corporation the argument that companies can still maximize profit without infringing upon human dignity is solidified. Even with opposition from socially conscious companies and proof of maximum profit without the use of sweatshops, slave labor continues to be an important facet in today’s manufacturing culture and it is therefore left up to the consumer to support those companies who support the human dignity of their own workers.
Thank you for your comments, Natalie. We have to be very careful about the terms we use when discussing the forum question since they can change the entire conversation. Slave labor is a very loaded phrase that entails a situation in which the rights of the individual are non-existent. One does not have the ability to make and act on any decisions a person would normally be able to because their free will is under the control of another individual. If we were talking about slave labor, it would make our discussion question moot since the question assumes that people are choosing to work in sweatshops, as evidenced by our reading materials. This ability to choose to enter into a contract with sweatshops and also to terminate that contract means this is not a case of slave labor. That said, it may be the case that sweatshops are the only places where people can find work. However, the ability to choose is still there.
You bring up an interesting point that companies like Ben and Jerry’s and New Balance don’t use sweatshops. Why do you think it is that so many other companies do? How large are Ben and Jerry’s and New Balance compared to other coporations that do use sweatshops? Size of a company might play a role in the decision to open factories outside of the United States.
The contrast between Ralph Nader and Milton Freidman keeps coming up and I appreciate that you took the time to make the point that both men have drastically different views. Their opinions probably differ so much because Nader’s ideas could arguably be socialistic (he’s supported by the Socialist Party, which says a lot about his views) while Freidman is a capitalist. Just as food for thought, how do you think their opposing political beliefs influence how they think businesses should be managed? And how do you think their opinions dictate what they would say about sweatshop wages?
The issue of sweatshops is a tricky one. Although I could argue that the buyers should be the ones to change the wages of those working in the sweatshops, as many of my classmates have, one could also argue the point that although this concept is unfortunate, it is also reality. I think that if the laborers want decent wages then why don’t they do something about it, why don’t they strike, why didn’t they stop the phenomenon before it got this bad, why didn’t we stop it? Of course anyone would answer that they don’t have any other options for income, and if they did go on strike then they would be fired and others would quickly fill their position. So if they can’t do anything about their wages then why don’t they ask for help financially? Unfortunately there is no one to help them, the economy is plummeting and no one has the money to help them. The reality is that the employees stuck in these sweatshops aren’t going anywhere; there is nothing to be done for them in the short run. The focus in this situation should be on the employers, this is not a solution to the economic crisis but since income distribution is one of the main problem in the crisis, the employers should be he ones to cut their own wages in order to spend more on the making of the product. Personally, I would not buy a more expensive product just because it was not made in a sweatshop and I believe that is the case for most buyers, I think the heads of the companies who are putting 7 year old girls to work making shoes that are overpriced at $120 should suck it up and sacrifice one of their summer homes so that this child can at least get 8 hours of sleep and still be able to feed herself. Notice that I did not say that she should be going to school, but we should be taking one step at a time for this issue, the types of societies where sweatshops thrive are in fragile, weak communities. They need to get stronger first before they can help themselves.
Thank you, Molly, for putting so much thought into your post. I appreciate that you took the time to read the other posts and critically think about the issue. Keep in mind, though, that relative terms like “decent wages” make the issue more ambiguous for us. We have to take into consideration cost of living when discussing income. Numbers mean everything.
You have a very good point that because people are choosing to work in sweatshops, they do have the power to protest while at the same time demand for jobs is high enough that it would be easy to replace them. You also propose an interesting solution that employers should cut their own wages and that it should be distributed to the sweatshop workers. Your suggestion implies that cutting one person’s pay to benefit someone else is just. Is it? Forced equality doesn’t seem very right to me. Let’s apply this to a different example. Do you think it’s right to decrease the pay of a manager at a McDonald’s restaurant in order to pay the cashier more money? Does the efficiency of the cashier warrant a pay increase, economically speaking? In other words, does the cashier provide enough of a benefit for the company to justify a higher paycheck? After all, the manager could run a register too if he had to. Part of the reason why sweatshop wages are so low is because so many people are capable of doing the job. Anyone can sit at a sewing machine and sew clothes together. I’m not trying to belittle what sweatshop workers do because they do work very hard in miserable conditions. What I am trying to do is help put the situation into perspective. A company isn’t going to increase someone’s pay unless they can demonstrate that they are a better asset to the company than their coworkers. The managers of companies that have sweatshops get paid more because they can do what most sweatshop workers can’t: run a factory.
By noting all of the inhumane conditions in sweatshops and the unlivable wages that sweatshop workers receive, there is no doubt that sweatshop wages are unjust. The question of just how efficient sweatshops really are is more difficult to answer. One must take into account the reduced labor cost, which leads to more profits, and the possibility that those workers might go on to discover a better way of production if they are not hindered from moving out of poverty by sweatshops.
To address the question of whether or not sweatshop wages are just, one must consider the miniscule workers’ wages, abuse, long work days, and harmful conditions that workers are subject to in sweatshops. These are not just wages when a person works for hours in fear of becoming ill and losing his or her job, especially when workers are constantly abused physically and mentally at work. A just wage should allow for a decent lifestyle, at least one that allows an individual to survive and not harm a person emotionally or physically.
Globalization is undoubtedly a good thing, since it provides jobs for workers in many countries, but the constant dropping of prices is unnecessary, especially when buyers are willing to pay more for the products. By discouraging unjust wages in sweatshops, the companies may not be able to sell products at as low of prices, but most likely buyers will still buy at slightly higher prices, and the workers could make a more decent amount of money. Also, the wages of sweatshop workers could be improved if the heads of corporations that have fallen into corruption and greed stop receiving a large salary while their workers in sweatshops receive very small wages. The outsourcing of jobs to other countries is beneficial in that it provides jobs in poorer countries and allows competition in order to maintain reasonable prices, but there needs to be an end to the greediness of heads of companies and abuse that occurs within sweatshops.
Sweatshops may be efficient since the cost of resources, mainly labor, is very small due to the little pay the workers receive. This allows the total revenue of the companies to be larger than the total costs, which results in more profits and the ability to lower prices below those of other companies. Since there are many people desperate for a job and there are no other jobs available, many of the people working in sweatshops are unable to rise out of these conditions and obtain a better job, so these people may have talents or ideas for better ways of production, but are hindered due to these sweatshops. The only reason that sweatshops still exist is because of the poverty in countries, and the sweatshops may be the only way for the people to make money. However, if all workers received a just wage, the people could excel and help the economy by opening their own businesses or contributing in other ways.
The wages that sweatshop workers receive are unjust and just prevent the people from excelling and having decent lifestyles. Although they allow for more profit, providing enough money for workers to feed their families and survive is essential, and the well being of workers should never be compromised in order for companies to receive profits.
Thank you, Melanie, for your comments. We always have to make sure we’re doing research and crunching the numbers for this discussion. You mentioned ulivable wages for sweatshop workers, but let’s look at a few numbers. In another post I mentioned that a loaf of bread costs 21 cents in Kabul, Afghanistan. Many people earn under $1/day. Let’s say a man in Kabul only earns 50 cents/day. That means that if he buys one loaf of bread, he still has 31 cents left over. With part of that 31 cents, he can then purchase some milk to drink. That probably leaves him with about 15-20 cents. This is what a normal meal looks like in many developing countries. People may be malnourished, but they are still getting enough food to survive. We should always consider cost of living relative to wage in a given country rather than across countries since someone in the United States obviously wouldn’t be able to survive on 50 cents/day, but someone in Afghanistan can.
What makes the part of our question about just wages difficult to answer is that the dignity of these people as human beings is often being violated. But that violation is occurring after people have consented to work in sweatshops. So if someone agrees to the working conditions within a sweatshop and can live off of the wages, does that mean the wages are just or does the violation of human dignity, even though accepted by the employee, trump the fact that he can live off of the money he receives? It’s a tough one.
The salaries of corporation executives seems to trouble many students who have posted so far. But we need to make it clear that executives work harder and cope with more pressure than some of us may ever have to. An executive has to bear the burden of how to make a company stay afload in a sea governed by the demands of consumers. If he can’t find a way to turn a profit then nobody is going to have a job at his company. In addition, executives do what few people are capable of doing: running a company. I think it is just that they are paid more than sweatshop workers because executives have received higher educations and know more about running a company than sweatshop workers.
On a final note, I would argue that sweatshops do not prevent people of excelling. It’s the economic disasters of the developing countries that prevent people from succeeding. A sweatshop is merely the symptom of poverty (nobody would work at a sweatshop if there were better options), not part of the cause. When sweatshops emerge it’s because they are a better option than whatever other choices people have.
Many people within the confines of first world countries, such as America and Britain, know about what is going on in sweatshops around the world. Yet everyday these poor quality facilities manage to continue to produce a product at a low cost to the companies they are employed by whom turn the product around for a large total profit. Not only is this action unjust, but it goes against the type of Nader economics which are becoming more prevalent into today’s society. Overall, it is apparent that sweatshops are a means to diminishing the ability for third world countries to grow economically.
A living wage is the minimum amount of money or dollar and employee can work on in order to have all of their basic human needs met. This wage is something that all American expect to be paid; however, those American employers who also outsource jobs to sweatshops seem to think that it is just to pay workers in third world countries smaller wages than those who they employ within the United States. Not only does this create a double standard for Multinational corporations, but it also diminishes the solidarity of those working in sweatshops.
Furthermore facilities such as these go against everything that Nader economics stands for. Nader economics are based on the premise of doing what you can in order to produce a quality product, make a profit and maintain an ethical and social responsibility to costumers and workers alike. Thus, sweatshops are doing nothing in order of keeping with this philosophy. It seems as though sweatshops owners are only concerned about making the maximum profit regardless of the number of people they are exploiting through deplorable wages and excruciating hours of hard work.
Overall, it is made evident though common knowledge and research alike that sweatshops conduct disturbing acts of exploitation. Multinational corporations create a double standard for themselves on what is right in some place and wrong in others. In sum, the costs attacked to sweatshop labor are so overwhelming that I find it implausible that they are still around today.
Thank you, Jessica, for your comments. It’s interesting that you argue sweatshop wages are unjust because they prevent developing countries from improving economically. I’ve cited a presentation attached to the forum page a few times, and I think it’s worth another look. The project “Economic Freedom and Global Poverty” by James Gwartney and Joseph Connors was designed to examine whether or not the economies of developing countries are improving over time. Economic freedom means people have the option to choose where to work. The data was pulled from the World FactBook with notes that it entailed information on 70% of the world’s population in 1980 and 82% in 2005. Approximately 85% of the world’s population lives in poverty, which means many of these people work in sweatshops. On slide 4 we see that the global $1/day poverty rate has decreased by 23.1% in 25 years. The country with the largest impact was by far China. They went from a 64% $1/day poverty rate in 1980 to 10% in 2005. On slide 10 we see the $2/day global poverty rate. It has fallen from 70.4% in 1980 to 48.9% in 2005. Again, we see that China had a large impact with 88% of the population living at $2/day in 1980 down to 35% in 2005. This data would suggest that sweatshops are not hurting the economies of developing countries. Rather, they are helping to improve conditions over time. And just as a quick note before moving on, the reason companies pay sweatshop workers less than workers in other countries is becuase of the cost of living. If it costs less than $1/day to survive in developing countries, then there is no reason to pay someone $7/hour. Not to mention the catastrophic economic results that would take place if money was injected at such a high rate into these countries. Hyper inflation would run rampant and the images of 1930’s Germany with citizens burning money and carry barrels full of bills to pay for food would become a reality. More money isn’t necessarily always better.
On a final note, it’s true that sweatshops don’t follow the standards that Nader wishes to impose. In fact, by Nader’s standards, nobody is following through. What does he mean by social and ethical responsibility? How far are companies supposed to go to protect their employees? What role does personal responsibility play in Nader’s propositions? The research might lead to surprising answers.
It says in our constitution that all men are created equal but unfortunately in other countries this is untrue when dealing in the business of sweatshops. Two American corporations—Walmart and Nike—miss this crucial common belief that all men are created equal and therefore entitled to equal opportunities in employment and fair wages. One may be able to go to Walmart and buy a pair of tennis shoes for $20.00 instead of going to New Balance—a company who sells its products fairly so it can pay its employees a just wage—and spending more money buying a similar pair for $80.00. However, it is not about the money, but rather how the money is distributed after you leave it with the cashier. If you leave your money with Walmart, it goes directly into profit, whereas with the shoe company New Balance, you are ensured that the people who make your shoes earn a fair and just wage to live a comfortable life. New Balance’s minimum wage is much higher than the national minimum wage because of the cost of living; however, the men, women and children who are working in the “efficient” sweatshops earn nowhere near to even a dollar per day. The cost of living has been going up at an increasing rate and if the wages of workers do not increase with the living costs, hard working human beings will suffer a greater cost because of their salary: death. Not only the person’s own death but also the person’s family because they family is dependant on the head of the household to make the money and keep the family going. So while a customer at Walmart is debating whether or not to buy the new tennis shoes on sale at $20.00 he should think about where his money is going and whom it is affecting in the process. Instead of going to Walmart and getting the cheap bargain prices, people should stop and think about spending their money on a more socially benefiting product before entering the automatic sliding doors to the super store.
Many big-name companies resort to sweatshops because they are efficient in price and product, however the cost is much greater than the benefit. People’s lives are at stake if they are not paid a fair and just wage. The benefit of sweatshops is the product can be produced at a faster rate therefore making a large profit. Sweatshop owners only have one thing in mind and that must be profit because if they are interested in anything to do with the well-being of their employees, they would take the example of New Balance and calculate the cost of living and pay salaries accordingly. Walmart’s slogan is “Save money, Live better” however, while one may be saving money, there are men, women and children in a foreign country getting paid less than twenty cents per day so he or she can “live better” according to Walmart’s standards.
Thank you, Katherine, for your comments. The Declaration of Independence does indeed state that “…all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.” They are not saying that all men are entitled to the same working conditions but rather than all men are entitled to life, freedom from tyranny, and happiness in terms of success. These have to do with the government’s role in the lives of the people. You could argue that to some degree developing countries that allow sweatshops into their borders are fulfilling these three rights. They are not subjecting their citizens to death by starvation by depriving the opportunity to work and earn money, they are allowing trade which enables citizens to act more freely with their money, and they are allowing “happiness” in the sense that people can work to earn a living and provide for their families which leads to pride. After all, if you went from begging on the streets to a job with a guaranteed paycheck, wouldn’t you be proud of the fact that you can now put food on the table without wondering where your next meal is coming from?
When it comes to monetary distribution when a consumer purchases a product, the same things are happening in the cases of both companies. When Wal-Mart sells an item, the price of that item is then distributed between wages, purchase of other goods to sell, and other expenses. When New Balance sells shoes, the same thing is happening. The reason why New Balance pays their employees so much more is because the average cost of a pair of women’s running shoes is $100. It’s kind of like buying a Gucci bag. People pay more for an item which then leads to higher profits for the company which then enables them to pay higher wages. The reason Wal-Mart doesn’t sell shoes for $100 is because people who rely on stores that have lower prices can’t afford to pay that much for a pair of shoes when they are struggling to pay the bills and buy food as it is.
You make a good point that when the cost of living goes up, wages have to go up too. If the cost of living in developing countries is going up, wages will eventually go up too. When the cost of living goes up, it means that chances are pretty good that the standard of living is going up, which means the economy may be improving. When that happens, sweatshops become too inefficient to remain open and in addition people will stop working at sweatshops because better jobs will become available. This isn’t something that happens quickly, however. It takes a long time and there will be dips and rises in the economy, but things will eventually improve.
Sweatshops may seem beneficial at a first glance by giving people jobs and money in poorer developing countries, but once you understand the reality of sweatshops, you will change your mind. Sweatshops in my opinion do not pay just wages and are not safe facilities to work in. Businesses have a responsibility to pay fair wages and supply good working conditions for the young children and inexperienced adults they employ. Equally important to me is that they are working extremely hard, making a well made product that is sold for a much higher cost than what they are being paid. Sweatshops may be efficient in the manner in which the products are produced, but I do not think that they are good things to have.
According to Ralph Nader, sweatshops are unjust. Nader believes that businesses have an ethical and social responsibility to their employees. He believes in treating the employees with respect and paying them accordingly for their work. In sweatshops, the employees can be exposed to “harmful material, hazardous situations, extreme temperatures, or abuse from employers” (1). A sweatshop goes against Nader’s idea of taking care of the employers by giving them a safe place to work. In addition, he believes that businesses should support the employees, giving them enough money to live a healthy and safe life. Many employees at sweatshops live unhealthy and hard lives. As a result of their little pay, they are unable to live a life that is beneficial and healthy. Some people are forced to work long hours because of the little pay and need to put food on the table for there families. In addition, numerous young children are required to work in a sweatshop which is not right. Children should be able to explore the world instead of being obligated to work in an unsafe environment and long hours. On the other hand, Milton Friedman believes that there is only one responsibility of businesses, to increase profits while meeting the ethical standards. Being able to produce a product at the lowest price possible and then selling it to increase profit is his belief. He feels that sweatshops are efficient in their work. As a result of sweatshops making products with cheap labor, they are able to make and produce a large profit. As long as it is ethical, Friedman believes it is okay. Chrysler is an example of this scenario. People who work in the United States and build Chrysler cars are getting paid a lot more an hour than the Chrysler workers who are making the same product in Mexico. In an attempt to not go in to bankruptcy, Chrysler is shifting its labor from the United States into Mexico to produce the product at a cheaper labor cost per hour. This way the company will try to avoid going into bankruptcy and will hopefully be able to produce a profit.
1. A short history provided by Wikipedia
Thank you, Sarah, for your comments. You are right that sweatshops have unsafe working conditions for its employees, but there are many factors in considering the part of our discussion question that concerns whether wages are just or unjust. In addition to providing a living wage, there is the question of choice on the part of the worker and the violation of human dignity that occurs. As has been demonstrated in multiple responses, sweatshops do provide living wages for their employees. That leaves us to work through choice and human dignity. Everyone agrees that even if we’re dealing with livable wages, they are not just if the person is treated as something less than human. But, choice complicates the matter. When someone makes a conscious decision to work in a sweatshop knowing that the conditions are not very good, is it morally appropriate for us to say the wages are unjust? If we do not, we run the risk of condoning something terrible. If we do, we effectively say that a person’s right to choose should not be respected when it comes to people in developing countries. Quite a tricky situation.
Nader’s thoughts that a company should provide a safe working environment and appropriate wages is a great idea, but how far should we take that? There are many jobs in the United States that are unsafe. There’s firefighting, construction, law enforcement, and many more. In all three cases, employees run the risk of serious injury or even death. What, according to Nader, is the responsibility of those employers to its employees? Everyone knows sweatshops are dangerous, but some jobs have high risk factors to them. We have to be prudent when we talk about job safety. It’s one thing to provide for the employee, but it’s another to become like a nanny, acting as if people cannot take care of themselves and enforcing such extreme rules that it puts the employee in even more danger.
As for what Nader says about just wages, he’s right. But we’ve discussed multiple times that when considering cost of living, sweatshop wages are indeed just. The cost of living in developing countries is drastically lower to that of the United States. We have to look at wages in terms of what people in other countries need to survive, not what we need to survive and what we think they should be receiving. It will always be shocking to us that people are paid such low wages compared to ourselves. On the other hand, it will always be just as much of a shock to other people that we make so much money. What in the world do we need such high wages for anyway? We have an aweful lot of luxuries over here. What do we need cell phones and ipods and cable television for if they aren’t a necessity? Why can’t Americans live simple lives like other people in the world? Looking at how both sides perceive livable and just wages helps us put things in perspective.
I like that you brought up Chrysler. It’s a good example of what businesses need to do sometimes in order to stay in business and continue paying their employees. I agree with Friedman that a company’s biggest concern should be turn a profit. Without that profit, nothing happens. People don’t get paid, goods don’t get created, and consumers don’t get what they want. If Chrysler was going to go bankrupt, it’s because nobody was buying their cars for the prices they were asking. That means that if the company wants to continue making cars it has to go somewhere where it’s cheaper to build a car. It’s cheaper in Mexico because the cost of living is lower. If the cost of living is lower, Chrysler doesn’t have to spend as much to make a car, which means they can lower the prices of their cars, which means more people might buy cars, which means Chrysler will then have the money to pay it’s employees, bills, etc.
On a final note, you mention that children are required to work in sweatshops. This is not due to the presence of the sweatshops and their possible need for cihldren to work in tiny bits of machinery. The reason children work in sweatshops is because the economic situations are so bad that the parents need everyone to bring money in so there can be food on the table. It’s sad to say, but if those children were not in the sweatshops then they would be in the streets begging for money or food or dumpster diving for anything of value or working somewhere else. You’re right that children should be able to play and do all the things children should be able to do, but the reality is that suvival comes first and when survival is threatened children have to grow up a little faster.