Good Corporation, Bad Corporation Corporate Social CSR and Sweatshops

Chapter and Sweatshops , Figure A relative worker in a at Rana Plaza , up of 171 ' mining family member , presumed dead . The Importance of Sweatshops On April 24 , 2013 , at Rana Plaza on the outskirts of , a building containing apparel factories collapsed , trapping and killing over employees . It was not only the worst industrial disaster in the history of the garment industry , it was also the worlds most fatal industrial building collapse . News reports soon emerged that the factory owners had ignored ominous warning signs , such as visible cracks in the wall , and had illegally added several stories to the top of the building , creating a weight the building could not bear . Many of the factories operating in the building were producing apparel for Western brands , such as , oe Fresh , and Mango . Rescue workers struggled for over a week to reach trapped survivors , while hospitals tended to the over workers who had escaped , many with severe injuries . Survivors and 123

Goad , Bad told tales of having lost mothers and sisters who had worked in the same factories . The deaths of so many innocent workers created a of controversy in and around the world . Accusations and recriminations were leveled at and government . A period of intense and profound ensued for the global fashion companies that made substantial use of outsourced factory labor in . Within a few months , two major initiatives were announced , one American and one European , to increase safety and accountability in factories . In this chapter , we will explore the complex issues underlying the outsourcing of and its relationship to sweatshops and child labor . While the horrific example of Rana Plaza might lead one to assume that sweatshops are always a bad thing , a closer examination reveals the limitations of a simplistic view . In fact , relies heavily on outsourced apparel manufacturing for the of its citizens . Clothing factories employ over million citizens and the country obtains nearly 80 of its export earnings from the apparel An outright ban on outsourced manufacturing would leave many poor without a job . Although such jobs may not seem desirable from the perspective of citizens of industrialized countries , in developing countries these kinds of factories often pay more than the average salary . In this chapter debate section , we will ask ourselves what is the proper attitude of a maj or global brand toward manufacturing in a country like , which has suffered from a spate of manufacturing disasters in recent years . The company we will consider is Disney , which is known for producing toys , clothes , and movies aimed at children . Disney has been accused of producing goods in sweatshop factories that employ child labor . Disney can not afford to become known as a company that is unconcerned with the rights of children . What should they do ?

In order to discuss this issue , we first need to come to a more sophisticated understanding of sweatshops and their benefits and disadvantages . Understanding Sweatshops History and Definitions The term refers to a factory that is guilty of some sort of labor abuse or violation , such as unsafe working conditions , employment of children , mandatory overtime , payment of less than the minimum wage , unsafe working conditions , abusive discipline , sexual harassment , or violation of labor laws and regulations . The US Government counting has chosen to define a sweatshop as any manufacturing facility that is guilty of two or more of the above types of labor However , it is important to understand that the term ) is not just a legally term but a word that has entered the general lexicon and is used broadly . Historically , the term was first used in association with the manufacture of articles of clothing and apparel . Shortly after the beginning of the industrial revolution , which began in the United Kingdom at the end of eighteenth century and the beginning of the nineteenth , a rise in living standards led to a much greater consumer demand for clothing . Although the raw materials of , yarn , buttons , and be produced in large , mechanized factories , the same was not the case for the final garment itself . To the present day , it has remained to mechanize the sewing process involved in making clothing The manual dexterity of a human being has always been needed in addition to a and 124

Goad , Bad simple sewing machine . Consequently , the manufacturing of clothing has remained labor intensive relative to other industries . Another particularity of the apparel industry is that it is to predict demand for articles of fashion . In any given year , some sty es and colors will be wildly successful , while others will prove unpopular and need to be sold at a discount ( hence the ubiquitous nature of discount sales of clothing ) Given high costs and unpredictable demand , garment manufacturers turned to a system built on outsourcing production to middlemen who would then parcel out production to a number of small workshops . The middlemen were tasked with making sure that production were met , so they put pressure on the workshops and became known as , meaning that they made the workshops and their employees sweat . In time , these workshops became known as sweatshops . By the , the abuse in had become a topic concern , and the United Kingdom passed its Factory Act , which was then amended some times by In 1844 , Friedrich , who would attain fame as Karl Marx lectual partner and one of the founders of , wrote a critique entitled Condition Working Clan in England . As industrial developed in the United States , sweatshops also became a major American political issue . Many of the Abolitionists who became famous for their staunch opposition to American slavery also fought against sweatshops , considering them a form of human akin to slavery . By the , a number of groups sprung up to try to alleviate and control sweatshop conditions . Origins of the Movement The Triangle Shirtwaist Factory Fire By the first years of the twentieth century , New York City had become a center for apparel manufacturing and , consequently , for sweatshops as well . Tens of thousands of migrant workers toiled in the sweatshops of an area that is still referred to as the Garment District , the heart of which lies along Seventh Avenue in midtown Manhattan . By 1900 , a number of local unions allied to form the International Ladies Garment Workers Union ( the first major attempt to unionize sweatshop labor in the United States . In 1909 , approximately 20 of the workforce of the Triangle Shirtwaist Factory walked out in the first major strike in the garment As the strike wore on and the owners of the Triangle Shirtwaist Factory learned of attempts to unionize the remaining workers , the owners locked out the entire staff At a series of public meetings at which female workers spoke movingly of their deplorable working conditions , a mass walkout ensued , in which out of total shirtwaist workers walked off the job , giving this action the name of the Uprising of the While a few shops accepted unions and most agreed to improve conditions , the Triangle Shirtwaist Factory did not accept a union . Shortly afterwards , in 1910 , workers walked off the job in an action that became known as the Great The dispute was mediated by legendary jurist Louis , who later became known as one of the Supreme Court greatest Despite the central role of the Triangle Shirtwaist Company in these actions , and spite the promises of improvement made pursuant to mediation , it soon became clear that not enough had yet been accomplished . On March 25 , 1911 , a fire broke out in and 125

Goad , Bad the Triangle Shirtwaist Company factory located next to Washington Square With several of the main exits locked to prevent employees from stealing , only one exit was able and it was soon blocked by . Many workers succumbed to the heat and smoke whi others , trapped by the growing , stepped out onto an eighth ledge , and when the neat became unbearable , jumped off . Dozens of young women fell to their deaths on the pavement below , creating a image that would transform the entire industry . It was the worst industrial accident in the history of the United States . In the wake of the Triangle Shirtwaist Fire , a number of reforms were promptly in New York , with over sixty laws dealing with safety and labor rights passed by tie state legislature in the two years after the . These reforms were echoed and throughout the United States and around the world in the decades that followed . In 1919 , the International Labour Organization was created to protect worker In 1937 , the United States passed an important national statute on union and labor rights , the Labor Relations Despite these and other reforms , however , sweatshops stubbornly refused to disappear . In 1994 , the US Government Accounting noted that thousands of sweatshops continued to operate in the United States ?

Rather than disappearing , the sweatshop problem would follow the international path of globalization and spread around the world . Modern Sweatshop Scandals Lee , Nike , and is a term that refers to the growing interconnection of the worlds mies . The globalization trend greatly picked up speed after international moves to lower import tariffs were instituted by the General Agreement on Trade and Tariffs ( in 1947 and even more so after the system was institutionalized in the World Trade Organization ( in 1995 . At the corporate level , one manifestation of tion is foreign outsourcing , the practice of moving manufacturing operations to countries . Fashion and apparel companies were among the to take advantage of the of outsourcing . Throughout the period from 1970 to the present , employment in American apparel factories dropped sharply as companies moved production to countries like Indonesia , Vietnam , China , Mexico , and the Dominican Republic . The outsourcing movement was accompanied by increasing reports of sweatshop abuses . As a result , a number of nongovernmental organizations ( became involved in activities . One of these was an American organization called the National Labor Committee , headed by labor activist Charles . was devoted to ferreting out instances of sweatshop abuse in foreign factories producing for American brands , and then publicizing the abuses in an effort to shame the companies into changing their practices . Not surprisingly , both the factories and their American clients were quite reluctant to share information with . He therefore developed a number of sleuthing tactics for example , he would surreptitiously trail the garbage trucks that picked up the factory waste , following the truck to the local . Later , displaying able commitment to his job , he would sneak in and rummage through the waste , looking for discarded . When he found the factory production records , often minutely described in spec sheets , he was able to determine who the client was and how much the and 126

Good Corporation , Bad Corporation client was paying for the labor cost included in assembling a particular garment . Another technique employed by was to find the local food stands where workers would go for lunch or coffee . There he would seek to engage the workers in conversation about the factory . This technique had to be employed with great discretion because , if a factory owner or foreman heard that a worker was collaborating with , there was a great likelihood the worker would be punished or . After several years of watching his reports go ignored by the mainstream media , broke a story in 1993 that would transform the public image of American outsourcing . discovered that a fashion line produced for under the label of a prominent American television personality , Lee , was in in a factory that child labor and engaged in a number of worker abuses . Although expected that this report would receive little coverage , he was unwittingly helped by herself , went on the air during her popular morning show , Live Regis ' Lee , to tearfully deny the allegations . In the States as in many other countries , any incident involving a media celebrity becomes fodder for the popular press . found himself at the center of a news storm . As and exchanged accusations and , the issue of sweatshop abuses came to fore . eventually promised publicly to ensure that employment of children would cease and worker rights would be respected , and the controversy abated . has stated that , in the end , changed nothing of substance . Throughout the , a number of other abuses came to ight in factories used by American brands . Several of these involved the island of , a small American protectorate in the . A number of factory owners discovered that since is technically American territory , clothing produced in could enter the United States and carry the label Made in Since is muc closer to Vietnam and the Philippines than to the United States , a number of these factories recruited Vietnamese and Filipino natives as factory workers . Upon their arrival in , however , some of these workers were exposed to human rights abuses , in the worst of cases , outright slavery . In one notorious case , workers were literally imprisoned in the factory and forced to work without pay . Eventually , these abuses were reve ed and US prosecutors charges against factory owners , some of whom were sentenced to substantial prison sentences . In the early , one of Americas most prominent footwear brands , Nike , also came under attack as reports emerged from Indonesia and Vietnam of worker abuse . In Vietnam , a young female factory employee was working on basketball shoes when her machine and sent a bolt through her heart . The American cartoonist Garry began featuring a series of strips Nike sweatshop factories in his popular newspaper cartoon . At first , Nike refused to accept responsibility , pointing out that Nike had never manufactured its own footwear and apparel . Nike contracts with its sourcing factories required the factories to obey labor regulations and , in Nike view , this meant that any abuses were the factories responsibility . However , by 1998 , the continuing tive publicity obliged Nike to reverse course by instituting a strict code of conduct for its factories . Through the efforts of a crusading Secretary of Labor Robert Reich , the Clinton ministration sought to leverage the power of the bully pulpit available to the US presidency . In 1995 , the Clinton administration announced the formation of the Apparel Industry Partnership , a collaboration aimed at reducing instances of and 127

Good Corporation , Bad Corporation shop abuse . Companies who were able to establish that they had produced their items in environments would be allowed to add a special label in their clothes No It seems this approach was , as no companies ever made use of it , perhaps because many people would be disconcerted to find a reference to sweat in their garments . In 1998 , America college students created US Students ( which has proven to be an public interest group . initial goal was to convince American universities to eliminate sweatshops from the sourcing of college parel , such as the sweatshirts and bearing university logos that are commonly sold in campus stores and bookshops . Around the same time , a group of large American brands announced the creation of the Fair Labor Association ( a group that set standards for certifying American brands as if they submitted themselves to a regime of regular inspections . The was viewed with suspicion by many activists and , in part because the did not accept membership from unions , and also because it was felt that principal approach , to reward corporations with certification for a few years of minimal inspections , was to truly eliminate sweatshop abuses . As a result , union groups and the led the way in creating a rival group , the Worker Rights Consortium ( which took a different approach . The investigated ports of abuse and published its findings . In light of continued scrutiny from groups like the , the , the National Labor Committee , and other international groups such as the Clean Clothes Campaign , most large apparel brands developed and publicized their own internal codes of conduct for suppliers . Such codes of conduct were contractually imposed on all suppliers and that factories comply with all local labor laws , refrain from employing children , and maintain safety programs . In addition , most brands began to require that factories make themselves available for inspections to make sure that they were complying with the standards set forth in the codes of conduct . A number of inspection companies sprang up to service the needs of the corporations and groups of young inspectors soon scanned the globe , moving from factory to factory , checking them for fire violations , reviewing records to make sure that rules on overtime were respected , and so forth . Despite all these efforts , reports of violations continued to be heard . The American consumer seemed to have wearied of the sweatshop issue to some extent , and companies like and Nike , which had often been accused of sweatshop abuses , saw their sales and stock valuations continue to rise . Many companies began to focus more on mentalism and warming issues , and a number of brands began to require that their supply factories obtain some sort of environmental , such as the certification that was established in Germany under the auspices of , the worlds largest inspection company . Then , in 2012 and 2013 , a horrific series of of the Triangle Shirtwaist fire that had occurred a century the worlds consumers that the sweatshop issue was still with us . In 2012 , a fire broke out at an apparel factory in Pakistan , killing some 270 Pakistani workers . Among the western companies sourcing from that factory were the UK retailer and the German apparel brand . offer of compensation to the victim families of per fatality was viewed by many Pakistanis as insulting . Then , just a few months later , at the Fashions factory in , another 112 factory workers perished in a fire . Again , it was discovered that western brands such as , Disney , and the Gap has sourced products from the factory . The worlds tention was squarely focused on Pakistan and when the building collapse at and 128

Goad , Bad Rana Plaza in became the worst industrial catastrophe in the history of apparel manufacturing . The Other Side of the Story In Praise of Sweatshops In light of the above history , it might seem startling that many experts appear to accept the existence of sweatshops as something positive . Economist Jeffrey , who is haps the worlds foremost expert on the eradication of poverty ( he was the creator of the United Nations Millennium Project to cut global poverty in half ) was quoted in 1997 as saying , The problem with sweatshops is not that there are too many , but that there are not What did he mean by that ?

In general , economists are less disturbed by sweatshop abuses than are labor activists , but most economists would deny that this is because they are heartless or unconcerned with human rights . Rather , they concede that sweatshop abuses are both common and , but they also believe that the benefits to the local economy from international outsourcing more than outweigh the harm . According to this point of view , sweatshops are part of the industrialization process and are an inevitable of economic ment . Factories in poor countries are able to attract foreign customers because local labor is cheap . As factories proliferate and employment rises , factories must begin to compete for better workers . Wages therefore increase , and factory conditions improve . With a broader tax base and greater economic growth , local governments are able to invest in the structure for further development , building roads , hospitals , and schools . Some international research studies appear to confirm the economists point of view . One study revealed that , in most countries where the presence of sweatshops had been reported , apparel factory workers actually earned more than the average national A number of countries have passed through a manufacturing phase in which sweatshop were more prevalent on their way to full industrialization and a diversified economy . Examples include the United States , and Korea . Most recently , China appears to be following a similar path , though it is still in a transition phase and reports of sweatshop abuses are still common . Case Study Disney in The Walt Disney Corporation is one of the worlds largest entertainment ates , known for its theme parks , such as Disneyland and its long history of producing blockbuster animated movies from and Snow to Lion King and and its sale of licensed apparel and toys featuring famous characters from the Disney movies . Given that an important segment of Disney target market is children , the company is especially exposed to negative publicity related to certain sweatshop abuses , in particular , the use of child labor . After the 2011 Fashions factory fire in , Disney management became concerned about the public relations exposure due to its sourcing operations in . Although Disney apparel manufacturing was far from and 129

Goad , Bad , it still represented a very small percentage of Disney total earnings , which came predominantly from its television , and theme park divisions . One commonality to the products was that they all relied on Disney image as a wholesome provider of family fare . If Disney were to become tagged with accusations similar to those leveled at Lee that it was the beneficiary of child labor in shop consequences could be quite devastating for Disney public image . What would Disney do if students started nagging their parents to abandon Disney vacations or to stop renting Disney movies ?

Therefore , in early 2013 , Disney decided to pull its manufacturing operations out of Disney departed from shortly before the Rana Plaza building collapse was misinterpreted by many as having been caused by the collapse , whereas Disney had actually made its decision well before the collapse . Despite this , many representatives of and workers rights groups condemned Disney decision as an abdication of responsibility . In the view of such critics , Disney should have stayed behind to help remedy the problem . Topic for Debate Should Disney Return ?

In this chapter debate section , we ask , would it more ethical for Disney to stay in and use its considerable reputation to help lobby for improved worker at apparel factories ?

We will assume for the purposes of this debate that the Disney Board of Directors has been pressured to reconsider its position . Two directors are preparing their presentations for an upcoming board meeting at which the issue will once again be discussed . One of the directors , whom we will call Jones , is one of the founders of an international NGO dedicated to worker rights . He was invited onto the board specifically because of his ability to speak to issues of human rights compliance in outsourcing factories . It is Jones opinion that Disney should resume operations in . On the other side is a director we will call Smith , who is one of the principal shareholders of the Disney Corporation . Smith is very concerned that a return to would expose Disney to major risk , because another factory catastrophe coming after Disney return could lead to Disney name being will be asked to help one of these directors prepare their presentation at the Board meeting . Affirmative Disney should resume manufacturing in . Possible Arguments ' Disney has prestige to help lobby for improved human rights compliance in ' Disney departure may only encourage Disney suppliers and related parties to leave as well , thereby diminishing employment in and harming the local workers through ' By helping support the efforts of other foreign companies sourcing in , Disney will learn methods for working with governments and and

Goad Corporation , Bad Corporation community groups to help improve worker safety , which can only serve Disney positively in the other countries where Disney sources its apparel products . Negative Disney should not resume manufacturing in . Possible Arguments ' Disney markets products to children and families any reports of child labor or the deaths of teenage workers in factories could be devastating to Disney ' Disney should its factory countries that are doing a good job in providing a safe working environment for its employees , free of sweatshop ' Disney departure should help create an incentive for authorities to improve conditions in their factories . If no foreign buyers leave , it is too easy for them to become complacent and do little to change the status quo . Readings Address the Real Challenges Posner , Michael Disney and Other Big Brands Need to Address the Real to New York . May , Disney Decision Was Appropriate , Adam Disney Decision to Leave was Appropriate . New Yark Times . May , Disney Disgrace , Liana , and Judy . Decision to Pull Out of Is a Mistake . New York Times . May , Responsibility Is Local , Not Global , Responsibility for Sweatshops is Local , Not Global . New Yark . 11 , and 131

Goad Corporation , Bad Corporation Synthesis Questions . When you buy clothing do you check the inside label to see where the item was manufactured ?

Would it matter to you to discover that an item was manufactured in ?

If you found an article of clothing that had a label stating that it was manufactured in the United States , would this make it more attractive to you ?

What if the item was 20 or 30 more expensive , would that keep you from buying it ?

What is the best way to make sure the workers in factories are treated fairly ?

Can you come up with one detailed proposal ?

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