Business Ethics: Sweatshops or Outsourcing?
Wal-Mart, Topshop, Adidas, Calvin Klein, Gap, Levis, who doesn’t know all of these brands? Most of them are our favourite brands.
It has been a consumer’s nature to buy things at its cheapest. There will be more demand when prices of goods are lower, vice versa, less demand when prices of goods are higher. Of course, this economic theory only applies when the goods are normal goods. Seeing the nature of consumers’ behaviors, it is usual to for businesses to set their product prices low. To achieve this goal, businesses have to try to minimize their cost of production more specifically their cost of goods sold. Labour is one factor of productions which apparently the most possible factor to be minimized by lots of business (compared to the other three factors: land, capital, entrepreneur). Labour cost is being cut, well not cut but minimized. Most companies alternate their manufacturing or production process to lower paid labours such as China, Bangladesh, India et cetera. In other words, they are outsourcing their productions.
In fact, their ‘outsourcing’ action is only a friendlier word of ‘sweatshops’. Sweatshop (sweat factory) is a working environment considered to be unacceptably difficult or dangerous — especially by developed countries with high standards of living. This raises a few business ethical issues. First of all Sweatshop workers often work long hours for unusually low pay, regardless of laws mandating overtime pay or a minimum wage. Second, child labour laws may be violated.
Check out the following article regarding The top 10 worst sweatshops abusing companies. and 2010 Sweatshop Hall of Shame.
Here are some photos which picture the lives of sweatshop workers and their living conditions.
