Underpaid workers - Essay Example

Introduction Under paid workers are ed to long hours of work without commensurate remuneration. Abysmal work conditions, violation of labor rights, and use of child labor is the norm rather than exception in the supply chains of multi-national organizations, located in the third world. Such working conditions, often, referred to as sweatshops; exist in the developing as well as the developed world. For example, Tesco, Wal-mart, Nike, GAP, Sean John, Reebok, Starbucks, and Adidas have faced accusations of violations of labour rights, underpayment of wages and subjecting the workers, to long hours of work without adequate compensation. NGOs have repeatedly exposed cases of underpaid labor in countries like Brazil, Mexico, Thailand, Vietnam, Indonesia, and Taiwan. In the following text, we will study how underpayment affects the society, the workers, and how it is related to ethical theories. Ethical Theories At the onset, we will discuss the ethical theories of consequentialism and non-consequentialism, and later apply them to specific situations in the study of underpayment of wages. Consequentialism and non-consequentialism are two sets of normative ethical theories that help in making decisions and solving moral dilemmas. In retrospect, they provide criteria for evaluation of choices over decisions taken. Consequentialism According to the theory of consequentialism, an action, policy, and institution, is considered right, so long it produces good consequences. Consequences include the action itself and whatever the action causes. Consequentialism aims to spread greatest good of greatest number of people thereby bringing freedom, happiness and pleasure to humanity. John Stuart Mill and Jeremy Bentham are two well-known consequentialists. While Mill emphasizes happiness as the consequence, Bentham takes a hedonistic standpoint of pleasure. Bentham advocates that the actions are utilitarian, as long as they increase the overall amount of pleasure in the world. Utilitarianism is guided by the philosophy that actions should try to make the world a better place. While emphasizing the consequences exclusively, utilitarianism ignores the intentions behind the act. Actions should be guided by doing the most good of the humanity, while sacrificing the interests of the minority. The focus of utilitarianism is on actions and not on intentions. The moral worth of an action, or its intrinsic value, lies in its utility to the greatest number of people. Further to this, utilitarianism considers that harm, to a small number of people, is justified as long as acts, or its consequences, serve the interests of the majority of the people. Interestingly, utilitarianism has narrow economic and pragmatic implications as well. Utilitarianism argues that the world needs to be made a better place. Act utilitarianism views consequences of each act and rule utilitarianism calculates the overall utility of accepting or rejecting the rule. Running sweatshops is a utilitarian act as it easily sacrifices the interests of the minority population of those working in them, for the interests of the majority population of manufacturers and the consumers. Non-consequentialism Non-consequentialism judges the act by its rightness and wrongness of the action and not on its consequences. Any act that produces a wrong is not bad just because of its consequences but because of its intrinsically being wrong. Immanuel Kant and WD Ross have been prominent non-consequentialists. Non-consequentialists, do not always, ignore the consequences, but their decisions are based upon the net aggregate of the consequences of the choices. As a criticism of the non-consequentialism, it is noted that it overvalues the inner states of the action and undervalues their actual results. Contractionism is a non-consequentialist moral theory that considers that no uncompensated harm to anyone is permitted. The moral and ethical notions should be justifiable to each person. Contractarianism holds that persons are primarily self-interested, and only a rational assessment of the best strategy for maximization of their self-interests leads them to act morally. Contractarianism toes the Kantian thought that rationality of interests of each individual are supreme and we need to respect them. The individuals are motivated not by self-interest, but by public interest that are justifiable by all standards. Sweat-Shops The concept of sweatshop is as American as the apple pie (Hapke, 2004). Sweatshops were in vogue in the US in the nineteenth and the early twentieth century. Sweatshop is a manufacturing facility, often located in the third world, which violates the labour rights, infringes upon personal liberty and freedom of the workers and pays wages that are below the average minimum standard. Sweatshops thrive on work contracted to them by multinational enterprises for their cheap manufacturing costs, and lax labour laws, of the countries they are situated in. The workers are subjected to long hours of work, in inhuman and dangerous conditions. The employees are not allowed to unionize and can be dismissed en masse, if they raise concerns about their pays and work conditions. Generally sweatshops are associated with apparel, furniture, sports gear, toys and consumer goods manufacturing. The workers have to bear abuses and indignities hurled at them, while they put in longer working hours, many more than what are mandated by law. It is not uncommon to find child labour being employed in sweatshops. According to the Department of Labor (DOL) of the US Administration : it is a place of employment that violate (s) two or more state labor laws governing minimum wage and overtime, child labor, industrial homework occupational safety and health, workers' compensation or industry registration (Hapke, 2004, p.2). The exploitation of an individual or a collection of individuals is bad when viewed from the contractarianist theory of non-consequentialism. From the Kantian discourse of consequentialism, we learn that respect of each individual's dignity and freedom is supreme and any infringement leads to the collapse of ethical behaviour in society. The rights activism for restoration of sweatshops workers is imperative, as it seeks to evolve a common strategy, that only more socially responsible behaviour will make the business of organisations, morally justifiable. The proponents of sweatshops hold the utilitarian consequentialist view. They argue that howsoever, deplorable conditions in the sweatshops in the supply chains of multinational companies are they are much better than what is rampant in the supplier base of the local companies. Without sweatshops the workers would be left doing menial back-breaking tasks. Labor Rights Violations in the West Underpaid workers are increasingly becoming aware of their rights, resulting in the increase of lawsuits related to underpayment. The developed world has had its own share of cases of labor rights violations In the US, the number of lawsuits related to underpayment of workers increased by 100% from 1984 to 4389 in 1998(Gonzales). For example, in New York the underpayment cases relate to exploitation of immigrant workers in restaurants. In the Southern states, the cases relating to exploitation of forestry workers are filed, on behalf of Mexican and Guatemalan Forestry workers, by South Poverty Law Center, regarding refusal of employers to pay minimum wages. Employers attribute the rise in number of cases to the overzealous activist groups and attorneys. Many such violations, in the US, relate to workers with non-residential status. In the US, the courts have sent the message across that even if the workers don't hold a legal residence status they need to be properly compensated in employment (Gonzalez, 2007). Employees, in the developed world, are highly aware of their rights and due to stringent checks in place, labour rights violations are hard to go unreported. Rights activism in the West Advocates of labor rights use mass media to highlight the labor rights violation and underpayment of workers. These groups use websites and mass media to create awareness campaigns against the defaulting companies (Bullert, 1999). The activists have used the media effectively, arranged media messages, coordinated publicly and created highly visual and dramatic public events to highlight the plight of workers in sweatshops. The footwear and apparel industry very often has been at the receiving end of anti-globalization campaigns. NGOs like Vietnam Labor Watch, Global Alliance, Workers Rights Consortium, Oxfam, United Students against Sweatshops and Fair Labor Association. Press for Change and Global Exchange are some of the prominent organization that highlight underpayment of workers and other rights violations. Jeff Ballinger, the single man crusader organization, has been at the forefront in exposing labour malpractices in the developing countries. Employee unions like Fair Labor Association, Union of Needle, Industrial and Textile Employees (UNTIE) are the main employee unions that fostered alliances against 'sweatshops' to highlight alleged workers' rights' violations. Ethical Trade Initiative is a companies' led movement to improve the conditions of the manufacturing units. . There is a growing concern amongst consumers about the work conditions in which the products they use were made, and treatment that is meted out to workers who make them. The workers are paid wages that are hardly enough for sustenance and the treatment that is meted out to workers is below human dignity. In wake of globalisation, it is important that companies put into practice systems that are socially responsible and yield due benefits to workers. The cases of labor exploitation are increasingly being reported from the third world, especially, originating from the labour intensive and less mechanized sports goods, apparel, furniture, and toy industry. The reported abuses may be just the tip of the iceberg, as generally labor violations by the multinational enterprises and their supply chains are reported. Massive numbers of abuses those pertaining to goods manufactured and supplied in the third world countries go unreported. The anti-sweatshop campaigning has often arisen in the relatively secure and affluent environments of the western world. There is a growing movement especially amongst students to boycott the use of products of sweatshops carrying high profile brand names like Nike, Adidas, Gap, etc. Sweating tropics In a famous case dating back to 1993, when Tom Harkin, banned import of products manufactured by factories employing children. Immediately around 500000 children were laid off in Bangladesh and were made to fend in worst economic conditions (Powell, 2008). According to Powell they were made to fend themselves in abysmal conditions and some of them took to prostitution. Out of work, the employees are left with the options of either going into prostitution, or take up rag-picking or starve to death. There is a growing body of literature on the issue of minimum wage. Companies often pay as little as $3 dollars a day to workers in developing and underdeveloped countries. On the other hand, the average daily income as in the case of Honduras can be as little as $1. Thus when compared to the income levels in the developed countries, it is sheer exploitation whereas for the Hondurans it is a better means of livelihood (Powell, 2008). In a dramatic incident, Sweatshop campaign literally burst into every living room of the US as Kathie Lee Gifford expressed remorse on being enlightened of the fact that children slogged in her factories for 14 hours to 16 hours by Charles Kernaghan. Charles Kernaghan made the audience gasp when he showed that an item available for $24.95 only cost $1.0 to manufacture in the labour and export zones of Latin America (Bullert, 1999). The dilemma of ethics It is argued that making the sweat shops non-operational will not improve the lot of its workers as they will be out of job and their living conditions can go from bad to worse. Sweatshops, at least, provides subsistence living. Sweatshops where workers are underpaid, thus, are a symptom and not a cause of poverty. Powell (2008) found that sweatshop workers typically earn much more than others in the countries of their location. Howsoever, ugly the spectacle of sweatshops maybe, there is opposition to the boycott of these factories. It is argued that the living conditions of the workers would be worst off if they didn't get employment in the sweat shops. The sweatshops produce branded apparel, shoes and clothing that bring hedonistic pleasure of Bentham to millions across the globe. Products of sweatshops are thus justifiable consequences from hedonistic utilitarian viewpoint. Likewise by the theory of Mill, the products of sweatshops provide the greatest happiness to greatest number of people. The deplorable means carried out in sweatshops; the labour exploitation, child labour, underpayment of wages too are justified from the employment point of view as the employee, if dismissed, would be in worst conditions. According to Kirstoff cited in Stearns (2009), the sweatshops are an ugly reality of the apparel industry but are a symptom of poverty and not the cause. Banning the sweat shops closes one route out of poverty (Kristoff, 2009).By utilitarian ethic thus the end justifies the means. Nike Swooshed by campaigners In the sweatshop campaign two targeted strategies are used; one against the multi-national companies like Nike, Gap, Adidas and others towards celebrities like Michael Jordan and Tiger Woods who often endorse their products (Bullert, 1999). Maximum anti-sweatshop activism has been directed at Nike, the world's leading sports goods manufacturer. Nike has been accused of going roughshod over the worker's rights paying as little as $1 to $2 to workers in South east Asia in Indonesia, and Vietnam. Nike, founded in 1964, started shifting its manufacturing to Indonesia, Vietnam, China, Taiwan and elsewhere in the third world, attracted by the cheap labor and promise of higher profits in the 70s(Bullert). In 1989, a committee headed by Asian American Free Labor Institute-Indonesia did a minimum wage compliance survey and found the minimum wages for factories that produced export goods. It was found that workers were paid just 14 cents an hour in he plants that manufactured Nike shoe. One man team of Jeff Ballinger, a former textile union organizer, a human rights workers and labor rights advocate spent four years in Indonesia trying to monitor the work conditions and minimum wage compliance and found that Nike shoes had the worst labour rights record out of Nike, Reebok, Adidas, Bata and others. On the other hand, Nike powered by its high profile advertisement campaign, opening of mega-stores all across the US rode on the wave of heightened popularity. But gradually it also came under the scanner of labor rights activists. The movement against Nike sweatshops was spearheaded by students and Nike retaliated, against them, by withdrawing donations to universities. As a defence against accusations of labor rights violations Nike CEO Phil Knight presented the case of 300 people waiting outside Nike's factories in Indonesia seeking employment just in case those working inside were dismissed. 1998 was the watershed year for Nike for initiating changes to curb labor rights violations. Nike introduced several measures to make code of conduct requiring stricter child labor limits of its contracted manufacturers. Nike has often ducked accusations by attributed them to its contractual suppliers as most of the goods being sold under Nike label are manufactured in contracted facilities. The 1998 speech of Phil Knight, CEO, Nike became the turning point in Nike's approach to issues facing its suppliers. Knight accepted responsibility at the corporate level for labor activities of its suppliers by establishing six initiatives for the firm, including among others, the worker education programme and an increase in firm's support of its micro-enterprise loan (Hartman, Arnold and Waddock, 2003, p15). Nike realised that investment in the training and development of the workers and social welfare of communities surrounding the areas of its manufacturing operations represented investments in Nike operations as well (Hartman et.al, 2003). On the contrary people like David Henderson argue that with companies increasingly spending more on labor rights and social justice would do more harm than good to workers. Henderson argues that economy- wide regulations or restrictive agreements prevent labour markets from functioning freely, and deprives ordinary people of opportunities to make themselves better off. (Hartman et.al , 2003) The multi-national companies are increasingly being judged by their socially responsible behaviour The decreasing GAP between theory and practice Companies accused of supporting sweatshops have finally woken up amidst din raised by activists and media. As late as 2009, Gap fired an Indian Company of running a sweatshop in Delhi that employed children. Children in the sweatshop were making hand stitched blouses that were to be sold for $40 apiece in the American market. Similarly in 2006, Gap had fired 23 contracting companies from supplying apparel. According to company sources it has 90 watchmen stationed all across the world to check human and labour rights violations (CNN, 2009). Charges were also levelled against Gap for running sweatshops in the US According to Marka Hansen, the president of the company; these sweat shops after year 2000 developed a comprehensive policy to prevent rights abuse and protect the workers rights. (CNN, 2009). According to Hansen, the violations of human rights are now rare and far between (CNN). Rights activism has finally borne fruits and companies are taking upon themselves to uncover violations, make them public and take steps to end malpractices. Gap, for instance, monitors the conditions of the vendors before making them their suppliers. It is reported that 90 percent of the inspections fail at the preliminary examination. In 2008, GAP presented a 40 page report on worker's right and company's 'social investment' in 3010 factories of Gap located in over 50 countries. Gap admitted in the report that between 25 percent to 50 percent of company's suppliers in the Caribbean and Central America were known to be paying much less than 50 percent. Conclusion Being socially more responsible strengthens the multi-national corporations (Vogl in Hartman, Arnold and Wokutch, 2003). The argument put forward by the economists that these workers would be worst off if they were not employed in the sweatshops doesn't ease the guilt of customers (Hartman, Arnold and Waddock). The Kantian philosophy considers human beings as end in themselves and not merely means. People, have an intrinsic value that must be respected (Hartman et.al [2003]). Companies should promote just and favourable conditions, minimum age of employment and abstinence from use of child labor and forced labor. Pritchard, Dunnette, and Jorgensen cited in Furnham (2005) found that employees who were underpaid were less productive and more dissatisfied than employees who were equitably paid. (Furnham, 2005). The field research carried out by Hartman et. al. shows that more socially responsible behaviour strengthen the multi-national companies (Vogl in Hartman e.al [2003]). From the human resource viewpoint a satisfied and a skilled workforce is important for gaining competitive advantage. Low attrition rate also means lesser training and less human resource costs. While globalisation is an irreversible phenomenon multinational enterprises need to play a more socially responsible and morally acceptable role to fulfil the aspirations of all its stakeholders. References Furnham, A., (2005) The psychology of behaviour at work, Psychology of Press-Taylor and Francis Group (UK) Bullert, B.J., (1999) Strategic public relations, sweatshops, and the making of a global movement. Working Paper #2000-14. Retrieved March 14th 2009, http://depts.washington.edu/ccce/assets/documents/bj_bullert/strategic_public_relations.pdf Hapke, L., (2004) Sweatshop: history of an american idea. Rutgers University Press (US). Stearns, K., (2009) Sweatshops become prevalent reality Retrieved March 14th 2009 http://www.dailyevergreen.com/story/27953 Yaniv, Giedon (2007), On the employment effect of noncompliance with the minimum wage law. (Abstract) Retrieved March 14th 2008 http://www.sciencedirect.com/science'_ob=ArticleURL&_udi=B6V7M-4MYMFW0-7&_user=10&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=b5b4bdd25f63cef68cf431816855507e Hartman, L, P., Arnold, D, G., Wokutch, R, E., (2003) Rising above sweatshops, Greenwood Publishing Group (UK). Hartman, L, P., Arnold, D.G., Waddock, S., (2003) Rising above sweatshops: an introduction t to text and issues. Greenwood Publishing Group. CNN (2009) Gap: Report of kids' sweatshop 'deeply disturbing'. Retrieved March 14th 2009. http://www.cnn.com/2007/WORLD/asiapcf/10/29/gap.labor/ Powell, Benjamin (2008) In defense of sweatshops. Retrieved March 13th 2009. http://www.econlib.org/library/Columns/y2008/Powellsweatshops.html Gonzalez, A., (2007) Underpaid workers lawsuits increase, Retrieved March 12th 2009-0 http://www.gcconsulting.com/articles/pdf/120185.pdf Read More