The Moral Issue Of Sweatshop Labor Use By A Multinational Corporation

Introduction

The exploitation of workers in sweatshops has become a contentious issue, with many multinational corporations (MNCs) such as Nike, Reebok and Disney coming under fire for condoning and entering into such arrangements. While at face value sweatshop labor is inherently wrong, in today’s society and economy it is not necessarily unethical. This paper will investigate the deontological argument that exploiting, neglecting and demeaning individuals is against basic human rights and consequently is unacceptable for MNCs to endorse, while the consequentialist argument will contend that sweatshop labor maximizes the most utility for the most classes in developing countries and is therefore morally acceptable. While both views will be compared, I will argue that MNCs must use sweatshop labor abroad, as the current economy has forced the consequentialist view as the only feasible method of ethical practice in developing countries. This will be shown through considering the negative consequences of adopting deontological principles in current sweatshop situations and environments, while proving why the current wages for sweatshop labor in developing countries provides the most benefit in today’s society and is more morally acceptable than MNCs sourcing labor from local industries. This paper will conclude with the proposition that within sweatshop labor, there is room to improve the working conditions without jeopardizing the countries’ economic stabilities, thus finding an ethical solution within both deontological and consequentialist views.

Deontological view

In order to adopt the deontological argument and prove that it is morally unacceptable for an MNC to use sweatshop labor abroad, we must first show that sweatshop labor is morally unacceptable. Sweatshop labor, in short, comprises of below-subsistence wages in unsafe and coerced environments, predominate in developing countries. It expects sweatshop workers to accept the very bare minimum because they have no other choice; relying on the premise that below-subsistence wages are better than nothing. However, this premise is contradicted by the second formulation of Kantian ethics, that is, “act so that you treat humanity, whether in your own person or in that of another, always as an end and never as a means only”. Humans deserve dignity and respect because they are not machines; they are capable of making their own decisions and exhibiting moral behaviors. Consequently, we must always treat others as ends in themselves; because when we treat others as means, we sacrifice their dignity, exploiting their vulnerability to “benefit from their misfortune”. Sweatshop labor is clearly classed as exploitation through the parallels in Vladman’s Antidote anecdote. “B is fatally bitten by a rare and poisonous snake while hiking in a remote forest, but another hiker, A, walks by and offers to sell B the antidote for $10,000, although it retails at $10. Since B would rather lose his money than his life, he accepts A’s offer”. Hiker A exploits B in the same way that employers treat sweatshop workers; like B’s need to live, sweatshop workers need their job to fulfill their basic needs. However, unlike Hiker B’s consequential survival, sweatshop exploitation results in large MNC profit while workers are not paid enough to survive. By treating sweatshop workers as a means of maximizing profit, we remove their dignity and humanity. Furthermore, unlike Hiker A, who had no ongoing duty of care and did not owe Hiker B the antidote, employers have a “positive obligation of beneficence” towards their workers in that they have a direct relationship, and therefore have a positive duty to ensure the wellbeing of their workers. While it is not unreasonable that we do not owe it to every person to help them and alleviate their suffering, the “special relationship” between employer and worker enacts a duty of care onto the employer. Failure to enact and take responsibility for this duty is neglectful. Moreover, in neglecting their workers, employers force them to degrade themselves by “surface endorsing” below-subsistent wages; as the only alternative is refusing the job, thereby “failing to mitigate their plight”. Workers are forced to agree to neglectful conditions, for they cannot find any reasonable alternatives.

However, sweatshop employers do more than exploit and neglect their workers, they demean them. Society is “psychologically disposed to think that our wages reflect our productivity”; consequently, we place high value on the message that our wages represent. So, when sweatshop workers are severely underpaid to the point where they cannot pay for basic needs, it sends a message that their labor is not worth living for, that it is not worth “even the cost necessary to sustain it”. Considering that work is ingrained in our personal identities, both positive and negative messages about our work, whether through criticism, behavioral signs or wages, are adopted as beliefs about ourselves. Why? A large portion of our day is taken up by work, our conversations revolve around work and stereotypes and assumptions are made about us based on the work we undertake. As a result, when we are paid less than we deserve, we naturally take offence, as a low wage becomes a disparagement of what we believe we are valued at. Sweatshop workers are therefore demeaned by their wage, as society’s natural beliefs that human value is linked to monetary value (wages) in turn insinuate that sweatshop workers have little to no value at all. Even if sweatshop workers are unaware that they are being demeaned, it does not discount the intentions of their employers. Allan Hazlett argues that “if the only reason a person does not feel offended by what another does is that they fail to catch the message imbedded in the action, then they have been insulted without knowing it” ; and in the same way, sweatshop workers are demeaned irrespective of whether they feel so. However, very few individuals fail to identify with their work-roles, and so the majority of sweatshop workers will be aware of being demeaned, but as addressed earlier, their reality gives them no other option; either they stay in a neglecting and demeaning job or they have no income.

Sweatshop workers’ wages are not the only sign of demeaning treatment; coercive and degrading work environments betray Kantian principles through depriving workers of their dignity in treating them as means of profit. Hasan Ashraf investigated a Dhaka knitwear factory and uncovered a plethora of health threats, from “lack of ventilation, musculoskeletal pain and stress” to excessive “exposure to lights, electric wires and chemical adhesives”, while in a Mexican maquila, a 26-year-old worker struggled to complete the quotas enforced by his employers due to the laborious and overworked nature of his job which resulted in severe hand stress injuries. Moreover, these health and safety violation environments are non-negotiable workplaces, where employers coerce workers into working overtime in injured states otherwise they lose their jobs. While it can be argued that workers “surface endorse” these conditions, as many have moved from the agricultural industry in search of better pay , it is morally unacceptable to threaten the loss of income if workers do not comply with degrading and potentially fatal realities. To be classed as coercion, employers must have the intention of violating the autonomy of workers through physical or psychological means to force compliance with the employers’ will , and sweatshop owners do so in a variety of ways. Physical coercion is seen in Guangdong, China, where workers could not leave the factory as security guards blocked their exits , while in Bangladesh, psychological coercion prevented employees from receiving their rightful overtime pay as those who demanded it were fired. Physical and psychological coercion are clear violations of respecting humans’ rights and dignity; degrading human beings to tools of profit is never appropriate, regardless of the profitable outcomes for MNCs.

Consequentialist view

Now that the deontological argument has been examined, we turn towards the consequentialist argument that increasing wages in sweatshops will reap the least utility for the global economy, particularly in third-world countries where sweatshop labor resides. It cannot be denied that sweatshop workers are paid horrifically low wages, often below the poverty level , and it is evident that developing countries have violated labor rules in sweatshops. However, the International Labor Organization (ILO) says that “wages and working conditions are often equal to or higher than jobs outside” , with the World Bank confirming that “the poorest workers in developing countries work in the informal sector where they often earn less than half what a [sweatshop worker] earns”. For example, if Nike paid their workers the minimum wage in Serang, Indonesia, instead of below-subsistent wages, this would place them in the “top half of the income distribution in Indonesia”. On first glance, subsistence pay would class those workers as more than tools to reap profit, but as human beings worthy of respect and value under deontological ethics, however, it ignores the rest of the population who are not privy to minimum wage. If sweatshop workers are paid higher, it comes “at the expense of the incomes and the job opportunities of much poorer workers”. We must consider the economic implications of raising wages to minimum wage in developing countries, as unlike industrial countries, providing subsistence wages to sweatshop workers may be “morally wicked” as global investment and local employment are negatively affected. Higher standards and cost of wages will reduce the amount of hired sweatshop workers, dragging more rural and informal workers back to jobs which are worse off in wages and working conditions. While it is noted that it is no better to sacrifice workers’ rights for more sweatshop jobs than increasing rights at the detriment of rural jobs, deontological critics fail to find an ethical solution for those not in the formal (sweatshop labor) sector, focusing on the degradation of sweatshop workers as the principle in need of change rather than the direr living conditions of those excluded from sweatshop labor. MNCs may fail to pay subsistent wages to sweatshop workers but what they do pay maximizes the utility in developing countries; the ILO has shown that “the most successful developing economies, in terms of output and employment growth, have been those who best exploited emerging opportunities in the global economy”. Without sweatshop labor, developing countries would struggle to benefit due to the lack of foreign direct investment (FDI), consequently failing to capitalize on industrialization opportunities and subsequently missing out on improved employment provisions, leaving developing countries without a means of income or growth. This confirms the argument that if paying workers subsistent wages grievously affects everyone else, then the maximum utility is sacrificed to provide for a few, which is morally wrong. Therefore, under the consequentialist view, sweatshop labor is the best option for the most amount of people, and therefore is morally acceptable.

Comparison

If we are to adopt the consequentialist view, we find that paying below-subsistent wages to sweatshop workers is ethically acceptable, and moreover, paying subsistent wages can be classed as ethically unacceptable if it “sets precedents for other international companies which raise labor costs to the point of discouraging foreign investment”. If deontological actions enable subsistent wages for sweatshop workers to provide them the human dignity they are entitled to, it will create the opposite effect, as increasing costs of labor will lower the desire for MNCs to invest in FDI, removing jobs available to counteract the increased cost. The snowball effect will see the halt of development in third-world countries as unemployment will increase, opportunities for income will be dominated by rural and informal labor sectors, decreasing the quality of working conditions due to the surplus of individuals and the desperation for jobs while attempting to maintain the level of profitability, and depraved conditions will become the only reality available for an increasing portion of the population. Empirical evidence suggests it may be adequate to accept the lesser of two evils, that is, sweatshop workers should settle for below-subsistent wages and degrading conditions. The “lines of job applicants outside the sweatshops in Guatemala and Honduras” demonstrates the recognition of developing countries’ members to seek better living conditions than the undeveloped rural sector. It can be argued that sweatshop workers are cognizant of the benefits of their line of work, and acutely aware of the detriments if it ceased to exist. The capabilities of some sweatshop workers in China to save enough money to purchase houses while sending money back to their rural communities demonstrate that below-subsistence wages are still higher than the local market wage and therefore their wages are dignifying features, not degrading implements. Sweatshop workers also then support the development of their countries by “fuelling economic surges in [their countries’] rural interiors”, reaping greater utility for the maximum range of society. Deontologist critics may argue that it is still a sub-standard class of living, in that the principle of being paid drastically lower than their first-world counterparts is demeaning, but they fail to consider the alternative; that paying sweatshop workers the equivalent of their industrialized parallels will destroy developing nations’ economies. While sweatshop workers become much richer, resulting inflation will force rural and undeveloped sectors into a greater degree of poverty and impending collapse. Can critics of sweatshops justify the implications of increasing wages? I do not believe it is possible in today’s economy. However, deontological critics can be sated to a degree through the view that MNCs should improve workplace health and safety conditions rather than wages; for while deontologists believe low wages in theory are unethical, consequentialists can agree that coercive and demeaning practices in sweatshops do not reap maximum utility through the perspective of rule utilitarianism. Profit-wise, coercion may result in the most labor, but through rule utilitarianism, enforcing basic work and health safety standards can generate greater overall utility as workers will be entitled to a greater quality of life, MNCs will exhibit greater social responsibility, encouraging consumers to support their businesses as they do not partake in degrading conditions and, to a degree, fulfill their duty of care to their workers by acknowledging their needs and making active attempts to mitigate the adverse effects of working in a developing country. I argue this is a sufficient compromise to be morally acceptable; while increasing wages has been shown above as detrimental to a greater population than just the sweatshop workers, improving working standards has drastically different and better results. In fact, Motorola has backed this claim through implementing their Code of Business Conduct promising “uncompromising integrity” and “constant respect for people” in a Tianjin factory by providing workers with meals and medical facilities. Mattel also spent “millions of dollars to upgrade its manufacturing facilities to improve worker safety and comfort” ; further providing evidence that MNCs can change the working conditions of sweatshop labor without destroying the FDI relationship between first and third-world countries. While I stand by the premise that providing sweatshop workers with subsistent wages will not provide the maximum utility, imposing better working conditions will in the long term maximize benefit, and therefore is the most morally acceptable option for MNCs to use.

Conclusion

In summary, this paper has addressed the deontological concerns about sweatshop labor and conditions by presenting the arguments that below-subsistent wages are neglectful, exploitational and demeaning. Critics protest that MNCs should not partake in sweatshop labor as their “positive obligation of beneficence” requires employers to ensure their workers receive adequate means to fulfill their duty of care, and below-subsistence wages is not compliant with those expectations. Furthermore, deontologists argue that sweatshop labor is exploitative in that workers do not have alternatives and employers therefore can and do take advantage, which is absolutely morally wrong. Yet, in today’s society, consequentialists disagree, contending that it is morally acceptable for MNCs to use sweatshop labor as it maximizes utility in developing nations for not only sweatshop workers, but their families and communities. If we accepted the deontological requirements of subsistent wages, the economic future of developing countries could be fatal. However, while wages should not be changed, an improvement in working conditions will grant workers with basic human rights without losing the industry from economic changes, maximizing utility for both sweatshop workers and their communities. Therefore, it is morally acceptable for MNCs to use sweatshop labor abroad, but they should also make a reasonable attempt to improve living conditions through better health and safety practices to be seen as ethical under the theory of rule utilitarianism and the reality of societal beliefs.