What is a sweatshop?
Nowadays, manufacturing features global chains of exchange. Production might originate with factories in the developing world, butâas Jill Esbenshade (Esbenshade, 2004), Luisbeth Sluiter (Sluiter, 2009), and others have notedâdistribution and sales are largely the task of multinational corporations that target customers in the first world. The companies âsourceâ their goods in developing economies with low labor costs, where workers have low expectations for job benefits, and where there is little pressure from organized labor. Developing world nations nevertheless welcome this production model as a way to bring needed resources into their countries.
This driving search for the least expensive locations for manufacturing bothers some writers. Critics have described globalized manufacturing as a ârace to the bottomâ (Tonelson, 2002). Not committed to staying anywhere, multinational enterprises go wherever they find the increasingly lower costs demanded year after year by their buyers or their buyersâ agents. Manufacturers, perhaps unduly pressured to comply, face perverse incentives to cut corners on quality or worker safety.
Sources with the lowest costs win contracts. Wages are part of production costs, which are among the most important of overall costs. Manufacturers who keep all costs low are more likely to secure contracts consistently.
Consider, for example, a Chinese garment factory that must compete with factories everywhere for the chance to provide goods to the West. The lower its wages, and the fewer and cheaper its safety measures, the less it must charge buyers. This sort of global competition seems to have changed the shape and structure of economic progress in poorer countries (Esbenshade, 2004).
Over time, previous waves of industrialization had raised wages and living standards as factory jobs provided workers the money and skills that would build economic and social capital for a resilient civil society. But because much manufacturing in the developing world nowadays is oriented to export, critics question whether the current model of global sourcing similarly fosters lasting economic improvements. Skills acquired by workers and management are sometimes not easily translatable into domestic-targeted production (Hobsbawn, 1999, pp. 39â40).
For the moment, we can set aside moral and economic disputes about the merits of global sourcing. Consider now the employment practices that are and have been controversial. Because of the difficult working conditions and low wages, writers dubbed them âsweatshops.â The term evokes images of poorly paid workers toiling for long hours in unsafe conditions. In the 1800s, writers spoke frequently of âsweated laborâ employed by âsweaters,â who were intermediaries between retail buyers and garment workers. According to the nineteenth-century British writer Charles Kingsley, the sweaters typically ran shops where workers were paid so little and kept in conditions so stark that they were often on the brink of starvation (Kingsley, 1850).
Today the term âsweatshopâ is a pejorative to convey working conditions that strike many observers as unfair, degrading, or exploitative. It is nevertheless unclear precisely what âsweatshopâ means. Building âexploitationâ into a definition of sweatshop risks a tendentious account at the start. Perhaps appealing to legal standards would help? The General Accounting Office of the United States defines sweatshop as âan employer that violates more than one federal or state labor law governing minimum wage and overtime, child labor, industrial homework, occupational safety and health, workersâ compensation, or industry registrationâ (United States General Accounting Office, 1994). For our purposes, however, this definition focuses too much on employers in the United States. The definition is too narrow for another reason. US lawsâor the laws of any nationâare not a foolproof indicator of what makes something a sweatshop. Even though factories in developing nations violate no local laws, they might qualify as sweatshops.
For the purposes of this discussion, let us stipulate that a sweatshop is any place of employment where workers labor under some combination of the following: (1) long hours, (2) low wages, (3) few opportunities for alternative employment, (4) workplaces lacking some available safety or comfort conditions, and/or (5) low opportunities for collective bargaining. Rarely would a sweatshop feature just one of these conditions, but those things people call sweatshops often show all five features in some way. All of these conditions involve some comparative measurements such as âlow,â âlong,â âfew,â or âsome.â We should then note two points. First, what makes something a sweatshop is significantly a function of departure from some norms. We need not settle here whether those norms can evolve in a way that what is now a sweatshop would not count as one in the nineteenth century. Second, though we can understand what a sweatshop is by comparison with some other workplace environments, the term sweatshop may be a function not so much of a comparison as it is of a failure to meet some threshold(s). The thresholds of acceptability might themselves evolve, but they need not. We need not specify what these levels are and what combination of features is sufficient to make for a sweatshop. But this thin sketch should avoid question-begging accounts of the merits of sweatshops while giving us enough to begin analyzing the ethics and policy challenges of sweatshops.
Sweatshop conditions
Concerns about sweatshops are hardly new. Nineteenth-and early twentieth-century writers worried about the conditions for low-wage workers (Bender, 2004). Several notorious incidents galvanized public concern and legal action. Among them was the infamous 1911 Triangle Shirtwaist factory fire, in which 146 garment workers perished when they could not escape through exits managers had locked to prevent theft and unauthorized breaks (von Drehle, 2004). Upton Sinclairâs 1906 novel, The Jungle, is widely read as reporting abuses in the US meat-packing industry. Among the responses to perceived or actual abuses were legislation to promote unions, minimum wage legislation, overtime regulations, and regulations intended to promote workplace safety.
Moving forward into recent times, the developed world still has its share of workplaces with substandard conditions. Reporters sometimes uncover stories of alarmingly unsafe and low-paying jobs in garment districts (Chin, 2005). Workers sometimes do not merely labor in difficult conditions. They die avoidable deaths. In 1991, for instance, 25 workers in Hamlet, North Carolina, died in a fire in a food-processing plant. Management had locked the fire exits to keep workers from stealing chickens (Tabor, 1991). Other recent publications highlight the alarming persistence of child labor and sex trafficking, which reinforces the vulnerable status of children from the developing world.
While discussions of sweatshops often flag illegal conditions in the developed world, by far most of the press and scholarly debates focus on factories in the developing world. Some of these stories highlight wages or working conditions illegal in the source factoryâs nation. But the conditions are not always in violation of local laws. Wages and working conditions were the subjects of much controversy about Nikeâs source factories in the 1990s. (See e.g. Ballinger, 1992, Clancy, 2000.) Sometimes the workers in Indonesian Nike factories had been paid beneath the national minimum wage or allegedly intimidated into asking to be exempt from such regulations (Roberts, 2013). Safety conditions are often the basis for tragic stories. In 2012, 112 workers perished in a fire in the Tazreen Fashion factory in Bangladesh. In 2013, over 1100 persons died in the collapse of the Rana Plaza, a Bangladeshi building that held several garment factories. In China, Foxconn factories employ hundreds of thousands of workers manufacturing electronic goods for sale in the West. The hours are long. Workers sometimes complain of physical problems, and several have attempted suicide. Conditions are sometimes unsafe. For instance, some workers have been hospitalized for exposure to the fumes from a chemical they use to clean iPod screens (Branigan, 2010, Duhigg & Barboza, 2012). Foxconn chose this chemical over alcohol because it evaporates faster and so speeds up production.
Despite the working conditions and low pay, workers eagerly sign up for the jobs. For many workers, the pay seems to be an opportunity to improve their standard of living. Often these jobs are the only options available to avoid a life of starvation or abject poverty.
Intermediaries and oversight challenges
In the early 1990s, Nike faced bad publicity for the conditions in factories manufacturing its products. But, then as now, often a multinational corporation that markets consumer goods does not own the factories that prepare its products. The corporation typically purchases products from suppliers to which they provide manufacturing specifications. Suppliers then find factories that can source their products, or they find other intermediaries who find providers in various locations to manufacture the goods. There are often many layers in a supply chain, and often several independent parties separate a multinational corporation from the manufacture of its goods.
A good example of the intermediaries who are crucial links in current global supply chains is Li & Fung. The New York Times details the significance and power of this company (Urbiner & Keith, 2013). Li & Fung connects multinational corporations to companies worldwide. It handles the logistics for many major retailers such as Sears and Kohlâs. Its agents have the local knowledge and connections to bargain for the best prices. They also know how to respond to conditions on the ground. They strive to anticipate bad weather, transportation delays, labor unrest, and political instability. Their business model supports working with source companies with a reputation for reliable delivery and compliance with local laws. Li & Fung agents will investigate allegations of noncompliance (such as child labor or blocked fire exits). Because these agents have such extensive local knowledge and represent lucrative possible sales, they have formidable bargaining power. They can often get better prices for manufactured goods than a retailer would if it were to try to negotiate with sources directly.
There are some potential drawbacks with this global sourcing model. One is that oversight depends on Li & Fungâs interest in ensuring compliance. Their main interest is to stay in business, which requires that they reliably connect buyers to providers. Some people complain that their drive for maximizing profit and minimizing costs inevitably crimps the companyâs concern with ensuring compliance with local laws. Plus, the providers they deal with do not want to air their dirty laundry. They want the contract. Critics worry that this encourages a further ârace to the bottom.â As one labor advocacy leader remarked, âEvery extra penny you squeeze from a factory ⌠is a step closer to that factory cutting the kind of corners that lead to deadly disastersâ (Urbiner & Keith, 2013).
In this global sourcing model, multinational enterprises outsource the efficient manufacture and transport of goods. The additional links in the supply chain seem to promote efficiency. But this suggests a second potential problem about transparency. Retailers are insulated from the manufacturing conditions for their products. More precisely: retail...