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Sweatshops Ethical Dilemma
Citation preview
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Christopher BakerCore 412
Applying Ethics: Ethical Dilemma Professor L. Halsted
11/26/12
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Core 412
I will be looking into whether it is ethical for businesses to run sweatshops, and the positive and
negative effects it has on their business. I will also be looking at the positive and negative effects
for the employees who work for these corporations and the ethics of the consumers who buy the
products. Companies such as Nike, Starbucks and other major franchises have all been targeted
for running cheap labor to maximize their products and I will research and discuss to see if these
are ethical matters.
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Annotated Bibliography
Powell, B., & Zwolinski, M. (2012). The Ethical and Economic Case Against Sweatshop
Labor:A Critical Assessment. Journal Of Business Ethics, 107(4), 449-472.
doi:10.1007/s10551-011-1058-8
Powell, Benjamin is a Professor of Economics at San José State University and the Director of
the Center on Entrepreneurial Innovation at the Independent Institute and Matt Zwolinski is
Professor of Philosophy at the University of San Diego. There article on “The Ethical and
Economic Case Against Sweatshop Labor” researches and distinguishes between different ways
in which various parties might seek to modify sweatshop behavior. The article also goes on to
mention if it is right ethically for cheap labor to exist to benefit a corporation. Professor Powell
and Zwolinski have conducted a tougher research on their topic and It also concludes “a list of
challenges that critics of sweatshops must meet to productively advance the debate.” This source
will be useful on my paper “The Ethics of Sweatshops and Their Effects” and will form a solid
part of the back ground section for my paper.
Skarbek, D. (2006). Sweatshops and Third World Living Standards: Are the Jobs Worth the
Sweat?.Journal Of Labor Research, 27(2), 263-274.
David Skarbek is a Lecturer in the Department of Political Economy at King's College London
and before that he was a Professor of Political Science at Duke University. His article on “
Sweatshops and Third World Living Standards” looks into comparing apparel industry wages
and the wages of individual firms accused of being sweatshops to measures of the standard of
living in Third World economies. Professor also believes that sweatshops provide above average
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standard of living in Third World countries. He fights those people, union and protestors who
believe sweatshops are ethically wrong and his research leads towards the benefits of sweatshops
for less economic developed countries. This source will be a useful to my paper to give a contrast
to the benefits of sweatshops to provide a contradictory argument.
Moriarty, J. (2012). Justice in compensation: a defense. Business Ethics: A European Review,
21(1), 64-6. doi:10.1111/j.1467-8608.2011.01641.x
Jeffrey Moriarty is a professor in the Philosophy Department at Bowling Green State University.
He conducts extensive research into business ethics and has written research papers on topics
such as “How Much Compensation Can CEOs Permissibly Accept.” Professor Moriarty looks
into why very high chief executive officers of companies get paid far beyond and the very low
pay of workers in overseas sweatshops and if it is ethically right that the difference in salary is so
vast. Although this mainly focuses attention to the rights of the workers in the sweatshops I
believe it will give a different contrast to my research with a business ethic point of view in
mind.
Pookulangara, S., Shephard, A., & Mestres, J. (2011). University community's perception of
sweatshops: a mixed method data.
Jaime Mestres is an Academic Advisor at the University of Missouri in the Department of
Textile and Apparel Management. Arlesa Shephard is head of Department of Human Sciences.
Sanjukta Pookulangara, Assistant Professor-Merchandising & Digital Retailing, all respected in
each of their departments for their research articles. Their research looks into the positive effects
that sweatshops have and the critical role in the apparel industry. This positive look on sweat
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shops will give me a different perspective and argument for the benefits of sweatshops and what
they have to offer in the industry.
Alexander, J. (2011). Sweatshops, Context Differentiation, and the Rational Person Standard.
PhilosophyIn The Contemporary World, 18(1), 68-74.
John Alexander was a Lecturer of Philosophy at Balliol College, Oxford and his research into the
philosophy and understanding of his research has given him a solid reputation. His article
“Sweatshops, Context Differentiation, and the Rational Person Standard” looks into to see if
sweatshops are morally correct within society and looking into what is best for the employee
rather than the business. This is quite a focused attention at a specific area of business where
usually morals don’t account for much in business, however it will give me another point of view
on my topic.
Meyers, C. D. (2007). Moral Duty, Individual Responsibility, and Sweatshop Exploitation.
Journal OfSocial Philosophy, 38(4), 620-626. doi:10.1111/j.1467-9833.2007.00402
Meyers is a professor in philosophy at Loyola University in Chicago. He specializes in applied
ethics, ethical theory and contemporary philosophy. He has recently published articles in Social
Theory and Practice, Philosophical Studies, and Synthese. His article reports on the comparison
between morals and the financial economy. This source will provide a solid structure to my
article.
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Due to the expansion of corporate globalization over the past 25 years, many
controversial questions have been asked, to see if it is ethical for sweatshops to exist among
society. According to the US Department of Labor, a sweatshop is “any factory that violates
more than one of the fundamental US labor laws, which include paying a minimum wage and
keeping a time card, paying overtime, and paying on time” (Alexis M. Herman,1997).
The history of sweatshops originates back to 1830-1850, in 1844; Friedrich Engels
gained the public’s attention when he published “The Condition of the Working Class in
England” (Engels, 1844). He defined this bleak period of working conditions as “sweating,” the
workers would not be paid by the hour, but by how hard they worked, how hard they “sweat”
(Greenhouse, 2006). Work was generally in the textile industry and was conducted in very small
places; critics and journalist back then even described the conditions as being “horrid,”
“monotonous,” “long hours and the pay miserably low” (Engels, 1844). In 1889, the British
Government launched a committee to investigate sweatshops in England, and the report was
made to the public in 1889, in which it described the working conditions and listed the major
corporations at the time which were using them. Sweatshops were in full production on a global
basis by the early 1990’s. Major corporations saw it as an opportunity for cheap labor and to
maximize their profits, corporations were generating more profit than ever before (Garner,
2009).
Immigrants from eastern European countries were seen as easy targets for major
corporations, who were paid low wages. As unemployment in eastern European countries was at
an all-time high in the early 1900’s, this caused an increase in demand for immigrants searching
for jobs (Kristof, 2009). This therefore meant that companies could pay their employees very low
wages, and therefore, if the worker demanded for a higher wages, or was complaining about the
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long hours, there would always be another worker willing to work in the sweatshop as
unemployment was so high. Companies at the time had full control of the supply and demand of
jobs in their industry. Employees would be grateful of any job no matter what the conditions
were (Kristof, 2009).
As the jobs were mainly labor intensive, this meant the workers lacked the education or
knowledge which would enable them to improve the working conditions. Workers were
generally of all ages, sometimes as young as the age of six to late 40-50s, and generally women
(Greenhouse,2006). Companies at the time used to pay by “piece rate.” This is where workers
would be paid by the amount of shoes, socks, trousers and shirts made. According to New York
times reporter Steven Greenhouse, sweatshops employees could work up to “48 straight hours”
(Greenhouse, 2006). Greenhouse also mentions that, employees were stripped of passport and
Identification cards, the workers had been removed of all identification they can be imprisoned
or deported; “they're trapped, often held under conditions of involuntary servitude” (Greenhouse,
2006). Sweatshops were not just seen in the textile industry, but in agriculture too. Legal and
illegal immigrants would pick fruit and vegetables from the land, and were sometimes abused
and punished if they didn’t meet their daily requirement (Greenhouse, 2006) . And as the
workers lacked education they had no knowledge of who to contact to fight for their rights; the
workers did not know any different; this was their job, and was their life (Greenhouse,2006).
The first steps to improve sweatshops were in 1903 in the United States, when New York
eliminated the production of tobacco products (New York Times, 2012). Before the legislation
was put in place, the production of tobacco products was being made in homes. Jacob Riis, a
photo journalist at the time, produced a book of powerful images of the condition of sweatshops
called “How the Other Half Lives” (New York Times, 2012). The images were disturbing and
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made the problems aware to the public; the main point of Jacob’s book was to inform the public
that if you buy from companies who were using sweatshops, you are encouraging the industry
even more, you are keeping the business alive and making them more money (New York Times,
2012). However, at the time, there was no “trade standard” put in place, and people didn’t know
which companies were using sweatshops. And the companies who employed cheap labor didn’t
want the consumers to find out either; this would take another 10 years to become evident (New
York Times, 2012).
The International Ladies Garment Works Union and Protocol of Peace, based in New
York was the breakthrough in the industry, which established a clear set of guidelines
corporations and any business had to follow which included, working conditions, wages,
ventilation and safety conditions (New York Times, 2012). Unions thought that this new
regulation would help benefit the situation; however six months after the regulation was made
public and set in place with corporations, a fire in manufacture Textile Company in Manhattan
started and left 146 of the 500 workers dead (Triangle Shirtwaist Factory Fire, 2011). It was
clear that the working conditions and the safety of the workers was still far from Unions desired
goal (Triangle Shirtwaist Factory Fire, 2011).
A perfect example of the profits that was being made by the sweatshops is Nike. Started
in 1972, an American based company, Nike contracted companies in China to manufacture their
products when their company started to incur high demand with the public. Their labor costs
were too high, paying their workers four to six dollars, which at the time which was reducing
their profit margins. Just to mention Germany’s average hourly wage in 1975 was $18 per hour
(Meyers, 2007). When they moved their manufacturing to China, they reduced their labor cost
per hour by over 600%. The workers in China were being paid $0.84 per hour, and when Nike
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was selling a pair of shoes for $99, labor cost would only amount 0.8% of the retail price,
compared to a 6% cost which they would incur if the pair of shoes were manufactured in the
United States (Meyers, 2007). From a business prospective and making profit, Nike is doing the
right thing as they are reducing the costs; however they are maximizing their profits by taking
advantage of another culture (Meyers, 2007).
On the other hand, according to Meyers who is a professor in philosophy at Loyola
University in Chicago, Kant’s categorical imperative would disapprove of employees being
taken advantage; “unfair situations and driving hard bargains against desperate workers,
companies undermine the autonomy of these workers who have no other realistic options.”
Kant’s “golden rule” would also say that Nike’s action of them taking advantage of their workers
is wrong and Professor Myers mentions if the owners of the company were to put themselves in
their employee’s shoes and work the hours and the conditions they are doing, would they be
happy the way they were treated; if not then to exploit others in that way is morally wrong
(Myers, 2007). Kant’s categorical imperative, asks us whether or not we can universalize our
actions and that it is your duty to help others, and your intentions of looking after others.
Personhood would not apply here either as Nike’s intentions are taking advantage of their
employees to make more profit, which goes against Kant’s theory (Kant, 1804).
The problem however, although Nike in the United States received a bad reputation for
moving their manufacturing process to China resulting to increasing number in unemployment in
the United States, countries like China rely on large companies like Nike to help their
infrastructure, employment and GDP (Myers, 2007). China welcomes large corporations to
contact them and manufacture their products as it benefits their economy despite the working
conditions (Myers, 2007). When Apple computers looked to build a manufacturing plant in 2000
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after the increasing demand within the industry, to make all their software and products, they
were contacted by the major cities of America (Walter Isaacson, 2011) . Each included their own
personal proposals of what their city could offer Apple; for example the cost of the building and
the cost of labor. When China contacted Apple; they flew the entire board to Beijing, and
showed them around the building which they had already built fully set up with all the required
machinery to manufacture. (Walter Isaacson, 2011). D. Kristof reporter from the New York
Times in 2009 reported “Yet sweatshops are only a symptom of poverty, not a cause, and
banning them closes off one route out of poverty.” Kristof, also mentions that many of citizens in
these third world countries would “love the opportunity” to work in these sweat shops as it far
better from the conditions of the other jobs available. Kristof mentions in his article that the best
way to help and benefit people in these less economic countries, “isn’t to campaign against
sweatshops but to promote manufacturing there.” Kristof named his article “Where sweat shops
are a dream” (Kristof, 2009).
Manufacturing products to foreign countries should not be prevented because the
economy and globalization of industries would gradually decline and have severe consequences
to countries infrastructure. Countries rely on other countries to help benefit their economy.
Professor David Skarbek, a Lecturer in the Department of Political Economy at King's College
London mentions in his article that sweatshops should not be seen as a negative, but a as
positive to the employees and countries that get the opportunity to work there (Skarbek, 2006).
Professor Skarbek mentions that “apparel industry wages equal or exceed average income per
worker in eight of ten countries.” Despite the 70 hour long week, Skarbek mentions that you
have to put the employees circumstances as the main focus, and the cost of living in countries
such as China, and Bangladesh is a relative to the cost of their wages (Skarbek, 2006). Out of
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the ten countries where sweatshops are most popular around the world, the average cost of living
exceeds no more than two dollars. However out of the ten countries, nine of them exceed this
daily cost of living. Professor Skarbek goes onto mention that although the sweatshop industry
has been highly criticized of exploiting in less economic countries, the workers are better off
than most of their citizens. Professor Skarbek’s article lists all the financial questions about
sweatshops, and provides valid points about the positive effects sweatshops bring to third world
countries; however he fails to address the question “is it ethical for sweatshops to among in our
society” (Skarbek, 2006). In his article he indicates that earning money can lead to happiness; he
fails to address the length of time and working conditions the employees have to go through to
earn this money to survive the cost of living in their society (Skarbek, 2006). This would be
against Utilitarian theory, and the cost benefits, the 70 hour work weeks, which are up to 60%
longer than most countries. Theorist John Stuart Mill would say the “quality of happiness is more
important,” as the employees would have a very limited time and amount of happiness working
the length of hours and the working conditions they are surrounded in (Mill, 1873). However
utilitarian’s also state “the greatest good for the greater number of people” and you could say a
sweatshop produces a greater volume of products which would give a greater amount of
happiness to customers.
The best way to get the attention of these companies using sweatshops is to reduce their
profits. For the first time in 1997 workers stood up for themselves and more than 10’000 workers
from Nike’s China factory went on strike (Powell, 2007). As demand was still high for Nike’s
products this strike caught the attention of the board of Nike headquarters, because if you have
no manufacturing work force, you have no product, and therefore resulting to loss in sales and
profit (Powell, 2007). Nike made instant improvements; less than $1 wages were replaced by
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above minimum wages, and random factory inspections were aloud for the first time by the Fair
Labor association (Powell, 2007)
Powell mentions that “safety improvements may be small as percentage of revenues
compared with profits but as a percent of revenue is utterly irrelevant” (Powell, 2007). Powell
Professor of Economics at San Jose University mentions that companies who spend money on
focusing and spending money on their latest products to grow sales, could have spent less money
improving the working conditions of their employees which in return would have increased their
sales. Powell mentions that by improving working conditions of your employees, this maximizes
productivity and quality of your product, which in result will lead to great sales from your
customers (Powell, 2007). Companies needed to spend less to generate more, where companies
were focusing on the next product all the time; they forgot to pay attention to their employees
who were making their product. Powell also goes onto mention that “forced labor” is morally
wrong and the workers do not have the choice of any other job options (Powell, 2007). And this
lies a problem, when employees only have a choice “among miserable and undesirable
conditions” you are exploiting human rights (Powell, 2007).
Powell’s article would follow after theorist Immanuel Kant that “it is your duty to help
others” (Kant, 1804). Powell would encourage companies to look after their employees and treat
them with “good intentions” and see them as a priority within the company (Powell, 2007).
Working conditions, wages and hours would have to be of good standard and the directors of the
company would seek that the employees were looked after and treated well; it would be their
“duty” to make sure they were happy (Kant, 1804).
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The basic business principles of looking after your employees and they will look after
you in return, seem to be forgotten. Sweatshops have required a bad stigma behind them for
obvious reason, and modern day companies have changed their business model, moving away
from maximizing their profits but giving back. The public now understands over time the issues
with sweatshops and the conditions of the workers, and this has affected companies globally.
Consumers of products do not want to be associated with companies with bad business ethics,
and companies are now finding ways of giving back profits to make their brand look green, and
not all about profits. Major corporations such as Nike, Apple, Starbuck and Convers, just to
name a few now brand some of their products with the “Product Red” brand. (Nixon, 2008)
Founded in 2006, with an objective to eliminate Aids in Africa, companies display the “Product
Red” label on their products, which donates a percentage of the profit to the “Global Fund.”
Examples are, Apple donates $10 of every Nano ipod that sells, Nike donating 100% of every
set of Red laces which are sold, and Starbucks donating $0.05 on every Product Red beverage
(Nixon, 2008).
Companies such as Product Red and many more nonprofit companies would never have
started if it was not because of sweatshops. We could say this is the positive outcome of the
many years of all those people who worked those long hours in awful conditions. We have to
thank the employees who worked for these companies because if the attention of sweatshops was
never addressed and these major corporations were still getting away with cheap labor and
disregarding human rights just to maximize their profits, these companies would still be using
sweatshops, and would not be investing their money and changing their business model and
brand to giving back their profits to benefit companies for good causes such as Product Red. This
new business brand image of giving back has started an influx of new business with the objective
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of giving back. Companies such as Toms Shoes donates a pair of shoes every time you purchase
one of their shoes, using their company slogan as “one for one” (Toms, 2012) they have donated
over one million shoes to children in less economic developed countries. This is a great example
of Social Contact theory which states “if you benefit from something you give something back”
(Thomas Hobbes, 1679). Social Contract Theory also states “a state of nature” that makes life
“poor, nasty and short” and that there are no “social goods, ie no industry or farming. The quality
of the workers goes against Hobbes theory, “that people must not hurt other people”, the
employees of these workers are not enjoyable working conditions (Thomas Hobbes, 1679)..
Jaime Mestres is an academic Advisor at the University of Missouri in the Department of
Textile and she mentions that it is down to “consumer social responsibility” if sweatshops are
ethical. Professor Mestres states three factors “Concern about Sweatshops,” “Knowledge about
Sweatshops” and “Beliefs about Foreign Industry” which a consumer thinks about before
willingness to pay or purchase a product from a company (Mestres, 2011). A study was
conducted at Marymount University where “70% students are were willing to pay an extra $1 on
a $20 article of clothing if they could be sure that the workers who made the item were paid a
livable wage and worked in safe and clean conditions” (MU Center for Ethical Concerns, 1999).
This Aristotle approach of “for good of all humans” that came within, by the students expresses
indicates Professor Mestres three step theory before purchasing the product. Another point to
address is that these were educated students at a top university; if the same question was to non-
university Students, or men or women from who lacked the privilege of an education, 70% of
them might not be willing to donate the $1 as they might lack the education and knowledge of
sweatshop (MU Center for Ethical Concerns, 1999).
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To conclude the points that I have stated above, there are some positive outcomes of
sweatshops. Companies who invest money in overseas, in the form of opening up sweatshops,
benefits the country’s economy by opening employment opportunities. This has many beneficial
factors as it brings in money to the employees and their country. However exporting your
employment abroad to take advantage of another countries work force to improve your profits is
wrong. And this is what I believe the what sweatshops stands for. Having firsthand experience
when visiting a sweatshop in the Seychelles in 2009 when I started my own clothing line, the
only benefit of using a sweatshop is to make more profit. However witnessing the conditions and
the hours the workers had to work for you to make more money was not humane. Companies are
always looking for ways to cut their cost down to maximize their profits and they found a way.
Companies such as Nike only exported their work force to a less economic developed country to
reduce their labor costs. It was a quick fix; attention wasn’t paid to the employee’s conditions,
working hours or pay, but just the volume of products they produced for the cheapest price.
However without the cause of these sweatshops we wouldn’t have companies which give back so
much of their profits every year to help out others who are less as fortunate as the majority of the
people in the world. Sweatshops have made companies re-think and change the way they
conduct themselves in business as they have now been highlighted and recognized in society by
the members of the public who buy the products from these companies.
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References
Powell, B., & Zwolinski, M. (2012). The Ethical and Economic Case Against Sweatshop Labor:
A Critical Assessment. Journal Of Business Ethics, 107(4), 449-472.
doi:10.1007/s10551-0111058-8
SKARBEK, D. (2006). Sweatshops and Third World Living Standards: Are the Jobs Worth the
Sweat?.Journal Of Labor Research, 27(2), 263-274.
Moriarty, J. (2012). Justice in compensation: a defense. Business Ethics: A European Review,
21(1), 64-6. doi:10.1111/j.1467-8608.2011.01641.x
Pookulangara, S., Shephard, A., & Mestres, J. (2011). University community's perception of
sweatshops:a mixed method data
Alexander, J. (2011). Sweatshops, Context Differentiation, and the Rational Person Standard.
PhilosophyIn The Contemporary World, 18(1), 68-74.
Meyers, C. D. (2007). Moral Duty, Individual Responsibility, and Sweatshop Exploitation.
Journal OfSocial Philosophy, 38(4), 620-626. doi:10.1111/j.1467-9833.2007.00402
Herman, A. (1997). Sweatshops. Solutions.United States Department of Labor. Retrieved from
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http://www.dol.gov/oasam/programs/history/herman/speeches/sp970603.htm
Greenhouse, S. ( 2006). An ugly side of free trade. New York Times. Retrieved from
http://www.nytimes.com/2006/05/03/business/worldbusiness/03clothing.html?pa
ewan d=all
Nixon,R. ( 2008). Bottom line for red. New York Times. Retrieved from
http://www.nytimes.com/2008/02/06/business/06red.html?pagewanted=all&_r=2&
Kristof, D. (2009). Where sweatshops are a dream. New York Times. Retrieved from
http://www.nytimes.com/2009/01/15/opinion/15kristof.html?_r=0
Isaacson, W. (2011) Steve Job. Simon & Schuster's
New York Times. (2011) Triangle Shirtwaist Factory Fire. Manhattan. Retrieved from
http://topics.nytimes.com/top/reference/timestopics/subjects/t/triangle_shirtwaist_factor
_fi/index.html
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Reflection
My first initial thoughts on sweatshops were the typical stereotype opinions which we
have labeled sweatshops with in our society; harsh working conditions, immoral, cheap labor,
abusive and corporations taking advantage of their employees. However with firsthand
experience and research for my ethical question, I have gained knowledge that there is more to
understand about this heated topic.
One of the main reasons why I chose this topic was the because of the invaluable
experience I had when I launched my own clothing brand in 2009. When looking for a supplier
to manufacture my clothing, I immediately thought of China and East Asia with my very limited
knowledge of this topic. I decided to fly out to these countries where the cost of manufacturing
of textiles was cheaper than some European countries. Visiting countries like the Seychelles,
Hong Kong and Thailand and experiencing sweatshops on a firsthand basis I gained an insight to
what sweatshops are really about, and what a text book could not teach me.
One of the main reasons why people start a business or venture into business is to make
money, and if that is your initial objective and goal to make money, using sweatshops in the
textile industry gives you the best possible chance to make this happen, saving as much as 80%
on labor and manufacturing costs, increases your chances of making profit. However
experiencing the working conditions in which the employees were surrounded in; the 80%
saving in costs was not worth the saving to encourage the sweatshop industry. So in the end I
found a lovely Italian family in Milan who has been designing clothes for many years, and they
make fantastic quality clothing and we pay them accordingly. We have a fantastic relationship
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with our manufactures, they are happy and we are happy, and I believe this is the art of good
business. If everybody in your chain of supply is happy and getting their fair share of money and
nobody is getting taken advantage of, this is good for everyone, and ethically the right way to go
about business.
However when researching my topic and discovering Professor Skarbeks article on
sweatshops I released that there may be some positives as result of sweatshops which did change
my opinion slightly. Professor Skarbeks research stated that 19/20 countries that used
sweatshops excelled the daily average income of that country. Despite the working conditions
and the long hours that the employees are working, you have to see this as a positive and a step
in the right direction. Corporations such as Nike have invested millions of dollars to build
manufacturing plants in places like China and have created thousands of jobs; this is a positive
outcome of sweatshops. If we can then channel these sweatshops into enjoyable places to work,
less hours, increased pay and focus more on the employees rather than just profit margins this
would be step in the right direction, not only for the employees but the businesses that influence
sweatshops.
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