In defense of international sweatshops - Essay Example

Article: In Defense of International Sweatshops Review and Discussion What are the four different standards that have been proposed for setting wages and labor standards in international sweatshops Critically assess each standard. Are you persuaded by Maitland's criticism of Donaldson's test Why do Donaldson and De George believe the classical liberal standard is inapplicable to poor, developing countries Explain why you agree or disagree with their arguments. The four different standards that have been proposed for setting wages and labor standards in international sweatshops are: a. Home-country standards - This standard proposes that international corporations pay the same wages and provide the same labor standards anywhere they operate. This standard would be very welcome for local workers in an international sweatshop but may be prohibitive for the international company and removes the incentive for setting up shop in a developing country. When that happens then the job opportunities for local workers are lost. b. "Living wage" standard - According to De George, the living wage allows the worker to live in dignity as a human being. This standard is "nice" to hear but may be very difficult to determine as it involves the abstract concept of dignity which would be debatable and may be variable among individuals. c. Donaldson's test - This standard proposes a moral minimum that complies with the test, "The practice is permissible if and only if the members of the home country would, under conditions of economic development relevantly similar to those of the host country, regard the practice as permissible." Again, interpretation of the moral minimum would vary from individual to individual according to the subjective perceptions of each. This therefore will make this standard difficult to use if not altogether useless. d. Classical liberal standard - This standard proposes that a wage or labor standard is ethically acceptable if it is freely chosen by informed workers. The standard is by far the most practical and logical among the four. It allows market and labor forces to dictate the appropriate wage and labor standards in a particular location. Maitland's criticism of Donaldson's test is persuasive and easy to agree to. As previously stated, the moral minimum proposed by Donaldson and complying with his test would vary from individual to individual and as Maitland said will confuse implementing managers in the international sweatshops. Donaldson and De George believe the classical liberal standard is inapplicable to poor, developing countries because in these countries, some sort of market failure or the background conditions are lacking for market forces to work effectively. Such background conditions include the very high average level of unemployment of 40% in developing countries, and background institutions like enforceable minimum wage. These prevent the effective application of neoclassical economic principles wherein the classical liberal standard is based. I disagree with Donaldson and De George's arguments because I consider the very same background conditions that they say prevent market forces to work, as part of the market forces. 2. By American standards, wages in international sweatshops are very low and working conditions appear terrible. Does the fact that foreign workers are eager to take these jobs establish that those wages and conditions are morally acceptable In my opinion, the fact that foreign workers are eager to take sweatshop wages and conditions despite their disparities with American standards make this morally acceptable. Moral acceptability as defined by Kant (1998) connotes universalizability. The concept of universalizaibility states that the only morally acceptable maxims of actions are those that could rationally be willed to be universal law. I would extend the interpretation to apply to the eagerness of the foreign workers. Since all the foreign workers are agreeable to the wages and conditions, then they are morally acceptable. 3. Maitland appears to believe that with regard to wages, "the appropriate test iswhether [the wage] is accepted by (reasonably) informed workers." Is that the only morally relevant test Can wages be exploitative even if workers accept them Maitland's test of ethically acceptable practice is whether it is accepted by reasonably informed workers. This is a morally relevant test. Another morally relevant test would be whether the practice or wage is uniformly applied to all in the same general terms and conditions, meaning that workers in the same location and conditions are paid equally for the same work. That is to say that a worker A in location A should be paid as much as worker B in location A, for doing the same work, even if worker A is willing to accept pay that is lower than worker B. Although my opinion is that it is morally acceptable to pay the level of wages that informed workers are willing to accept, I also believe that wages can be exploitative even if workers accept them. The dictionary defines exploitation as the act of employing to the greatest possible advantage and/or for selfish reasons (AHD, 2000). In this sense, the wages of sweatshop workers are exploitative because they are set to provide the greatest advantage to the international corporation. The connotation of exploitation as the act of utilizing in an unjust or cruel manner, in my opinion does not apply to the above case. 4. Critics of international sweatshops believe that their wages and working conditions are morally inadequate, that international sweatshops impoverish local workers and increase inequality between rich and poor, and that the companies that use them end up colluding with repressive regimes. Maitland disputes each of those points. With regard to each point, with whom do you agree and why I agree with Maitland that the wages and working conditions of international sweatshops are morally acceptable using the classical liberal standard. As long as the workers are reasonably informed about the standards and accept them, then they are morally acceptable. I also agree with Maitland that international sweatshops do not impoverish local workers. In fact the workers are provided jobs with pay which for all intents and purposes they may not be able to have except for the sweatshop. In this sense, it is not impoverishment but rather upliftment. I agree with the critics though that international sweatshop wage and labor practices increase the inequality between rich and poor, not that the poor gets poorer but rather the rich get richer. With profitable operations from the international sweatshops due to minimized costs of wages and labor standards, the company owners would get far richer than the poor advancing with their low wages, but advance just the same. In this sense, the gap between rich and poor is widened. I agree with Maitland's dispute of the critics' claim that international sweatshops collude with repressive regimes. There may be factual instances in some countries where this has happened but the generalization is not logical. The international companies choose low cost locations for the commercial benefits they afford, whether such location is run by a repressive regime or not. There are many instances when international companies have moved out of previously low-cost locations because conditions have changed and the economic benefits expected can no longer be achieved. It has very little to do with repression, although such regimes do help the companies' business. Many scenarios have also happened where influx of international sweatshops in a country has driven the country's growth and therefore resulted in relaxation of repressive policies. 5. Business ethicists such as Donaldson and De George believe that multinational companies operating in the Third World should not leave it to the market alone to determine wages and working conditions. Maitland, to the contrary, argues that interfering with the market may have tragic consequences. With whom do you agree and why I agree with Maitland that as much as possible, companies in the Third World should leave it to market forces to determine wages and working conditions. Imposing standards that define much higher wages or significantly improved labor conditions may mean prohibitive costs to the international companies which will stop them from operating their shops, therefore both the company and the workers lose out. 6. Assess international sweatshops from a utilitarian point of view, taking into account not just their effect on foreign workers and countries but also their consequences in terms of cheaper prices and lost jobs for Americans. What non-utilitarian moral considerations are also relevant to this issue From a utilitarian point of view, international sweatshops benefit the countries they operate in because they provide influx of investment which creates jobs for local workers. The local workers are definitely benefited economically. Production costs are reduced which allows the companies to offer products at cheaper prices. The internationalization of businesses has also resulted in products being easily marketed in different parts of the world. There is of course the trade-off of lost jobs for Americans, but since the jobs abroad are sweatshop jobs, these may not be jobs that First World Americans really aspire for. A non-utilitarian moral consideration that is also relevant to international sweatshops would be the production standards employed in the sweatshops which may not be at the same high level as the one used in the home country. Experience has shown that some products produced in the sweatshops are not of the same quality standards as was previously produced, and some have been health threatening. It is the moral obligation of the international companies to ensure that their products wherever they are produced meet the standards they advertise. 7. Maitland believes that American companies act rightly by paying market wages in developing countries and that it may even be wrong for them to pay wages that exceed market levels. What would you do if you were and international manager of an American company If I were an international manager of an American company, I would also pay market wages in developing countries as what Maitland espouses. But I would not consider it wrong to pay wages that exceed market levels, especially if there is competition for the best workers in the country I have been assigned to manage. 8. Assess the following response to Maitland: "I agree that a law forcing companies to raise sweatshop wages would have bad results because it would discourage foreign investment. But this doesn't imply that an individual company has no moral obligation to raise its own wages, and it certainly doesn't imply that it would be wrong for the company to choose to do so." I am in complete agreement with the response. Forcing companies to raise sweatshop wages would have bad results, such as diminishing the viability of the operation which may result in an altogether pull-out from the foreign location, which in turn would be disadvantageous to local workers and the host country. As earlier mentioned, the company is well within its rights to raise wages, especially if there is business benefit to be derived from doing so, such as increased worker productivity or to address competition and the like. I also consider it a moral obligation of the company to raise its wages if business operations is successful and especially if financial performance exceeds expectations. 9. Research on the United States shows (contrary to what one might expect) that increasing the minimum wage hasn't led to higher unemployment in the states that have done so and that the most profitable firms pay the best wages. Is this evidence relevant to the assessment of Maitland's argument The research in the United States showing that increasing minimum wage does not lead to higher unemployment and that the most profitable firms do pay the best wages, is not relevant evidence for assessing Maitland's argument. The United States is a First World country and prevailing conditions in developed countries are not the same as those in developing countries where the international sweatshops are located. Many First World labor practices, if applied in Third World economies would cripple businesses and prevent the economic growth of the country. References American Heritage Dictionary. (2000). Exploitation. Retrieved 21 October, 2008, from http://education.yahoo.com/reference/dictionary/entry/exploitation Kant, I. (1998). Groundwork of the metaphysics of morals. Cambridge University Press. Maitland, I. (1997). In defense of international sweatshops. The great non-debate over international sweatshops. 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