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12 Rare Sweatshop Facts: How Multinationals Multiply Poverty?

Rare sweatshop facts: multinationals are employing 168 million children ages 5 to 14 in poor countries to work 18 hours a day on cheap labor

Rare Sweatshop Facts

There are 12 rare sweatshop facts that will leave you in awe and disbelief. Do you know what are sweatshops? And what if I tell you that multinational corporations and companies are multiplying poverty?

The industrial revolution has brought tremendous transformation in the social, economic, cultural, and political aspects of life. The phenomenon of globalization and internationalization has given birth to many giant companies, organizations, and multinational corporations.

Although there are many thinkers who regard these multinationals as a force for good, Maitland and some others believe they are a part of the problem. These multinationals are exploitative and manipulative, grinding the labor in the underdeveloped and undernourished countries such as African, and South Asian countries.

Credit for this video goes to Zain Fiaz: Sweatshops routinely use child labor, have substandard and precarious working conditions, unequal pay, and inappropriate work hours.

This exploitation of the workers in poor countries is colloquially termed sweatshops. Maitland argues that Walmart, Nike, and other multinational corporations intimidate the workers, hire them at a wage that is below the poverty line and keep them poorer than ever. Also, they have a precarious working environment with no safety measures. Therefore, it is pertinent to know some rare sweatshop facts.

Rise of Globalization and Internationalization of Global Market

The industrial revolution has transformed the mechanism of business. A business is no longer regional or local but has the possibility of becoming an international brand. The business has become transborder and transnational.

It means a firm in the United States will be able to invest in some poor African countries and provide support to the local community by providing job opportunities. That was the reason many thinkers were very optimistic about globalization and the internationalization of the global market.

It was since the local communities will be uplifted by the multinational corporations and businesses. This looked especially pronounced and relevant knowing the undeveloped, underdeveloped and undernourished countries will have a market with no or low competition.

In other words, the corporations would establish themselves as brands in the new markets which ultimately help them thrive. Therefore, it was a win-win situation for both the multinational corporations and the untapped new markets in the poor countries.

1. Industrial and Info-tech Revolution didn’t Ease the Sufferings of the Poors

One of the 12 sweatshop facts is that multinational corporations are multiplying poverty. The dream of exploiting the economic dividends offered by the industrial revolution has remained elusive. The drastic and dramatic growth of multinational corporations and businesses has offered no help to the local communities.

One of the sweatshop facts is that the 100 biggest economies include 53 multinational corporations. Alarmingly, they have not uplifted the poor economies which is the reason behind their outstanding progress.

As a matter of fact, the situation of the poor people in Africa, Asia, etc. has gone from bad to worse. The level and severity of poverty have become even worse. It means these corporations are exploiting the local communities.

2. Sweatshop Facts: Multinational Companies Exploit workers in Developing Countries

 One of the interesting sweatshop facts is that Many economists such as Maitland declare sweatshops unethical. According to them, corporations are profit-driven and exploitative.

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These companies offer no benefits to the workers as their main concern is not the uplift of the people but ways to maximize their profit and productivity. It makes them manipulative, offering no life-changing benefits to people. All they do is make it look better through advertisements. It means they make an image that they are helping the local people.

“Their (multinational companies’ and organizations’) image is everything. They live and die by their image.”

Maitland p. 598

One of 12 sweatshop facts is that through ads, multinational corporations make people believe they are alleviating poverty but continue exploitation. This also means they will try to cut their expenses if possible. It includes offering them the lowest possible salaries. Further, there will be poor working conditions in sweatshops and a nerve-wracking working routine. One worker will be required to complete the work of two workers.

But in the media, they will show a positive and constructive image through advertisements. Hence, using media, these companies make a good image but continue exploiting the local communities.

3. Sweatshops do Not Offer Same Wage to Workers in Developing Countries

One of the sad sweatshop facts is that multinational corporations do not offer the same wage to wage to workers as they do in other developed countries. Although there are many thinkers who think that offering equal pay to the workers in other less developed economies is not possible. It is since they will have no incentive to invest in the poor communities and economies.

But this argument is self-defeating in many ways. First thing is that these corporations are not here for philanthropic purposes but to sell their products to the local people. There is no cutthroat competition in the untapped markets and they come and make an investment. This initial investment ultimately pays them manifold more. Therefore, it is not an argument that if they pay equal pay as in other states, they have no benefits.

“International corporations have an ethical duty to pay the same wages and provide the same labor standards regardless of where they operate.”

Maitland, p. 599

It means they have more benefits than ever unless they regard exploitation as profit. Secondly, these companies make an image that they are helping the local people and improving their living standards. This is totally wrong and misleading since they are not offering the same salaries as they do in some developed countries.

4. Sweatshops have Multiplied Poverty in Developing Countries

One of the nerve-wracking sweatshop facts is that multinationals have further widened poverty in developing countries. It is because these companies are governed for their own benefits rather than the local people. They do not give them incentives to improve their lifestyle or come out of poverty.

“The average level of unemployment in developing countries today exceeds 40 percent.”

Maitland p. 599

It means the workers in the developing countries have not benefited from the so-called socio-economic opportunities offered by the organizations like Levi-Strauss, Nike, Sears, JCPenney, Walmart, Home Depot, and Philips Van-Heusen. They offer jobs but the salary is so low that they continue living in poverty.

What makes the matter worse is that people cannot go for any other work opportunity. The hectic and herculean work at day followed by rest is the whole day and night of the workers. That is why the level of poverty has further increased.

5. Sweatshops intimidate workers and Keep them Grinding

Fourthly, intimidation is another way to keep the people grinding. One of the 12 sweatshop facts is that the corporations exploit the people to work at certain salary slabs in order to continue working. For example, they will threaten to withhold their salaries or the workers will be forced to resign if they demand a better working environment or improved salaries.

“International companies are using the threat of withdrawal or withholding of investment.”

Maitland p. 600

It means the multinational organizations are intimidating the impoverished people to manage the way the companies want without demanding better salaries or complaining about the precarious working conditions. This makes the people work silently and feed families on a day-to-day basis.

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6. Corporations Continue Having an Impoverished Class that Works on Low Wages

One of the 12 sweatshop facts is that multinational corporations deliberately keep the workers impoverished. This way, they have a chance to keep on exploiting the cheap labor. They mean business and not the progress of the region.

It is a nerve-wracking situation because they “choose between workers in developing countries that compete against each other to depress wages to attract foreign investment” (Maitland, 600). It shows the companies are widening the gap between the haves and haves not by making them fight for scrap.

” The multionational organizations have deliberately held (the workers) below the poverty level or subsistence in order to make the country a desirable location. The results of this competitive dismantling.”

Maitland p. 600

It shows the companies keep them poor to have cheap labor. Otherwise, they will be required to pay better salaries and offer a better working environment, something that will lower their profits. Based on this, the author thinks sweatshops are a reason why people are poor in undeveloped economies.

7. Sweatshops Facts: Salary is even Below the Poverty Line

One of the sad sweatshop facts is that multinational corporations offer a salary that is even below the poverty line. This is another way the parsimonious companies exploit the people by offering a salary that will always keep them poor.

This busts their myth of providing help to local people and even uplifting them. Maitland quotes a piece of news about Nike in 1992 when it was offering a salary that was even below the poverty line set by the poor country.

One of the sweatshop facts is, that “the worker was paid at the rate of $1.03 per day which was reportedly less than the Indonesian government’s figure for “minimum physical need” (Maitland, p. 601). It substantiates the sad fact these companies are highly manipulative that instead of offering better salaries than the one offered by the local companies even pay less than the poverty line.

Since an increase in inflation is always there, these companies hardly increase their salaries with respect to inflation. It makes them become middle-income families to low-income families. This is not only against the global working norms but also shows the corrupted approach of the companies.

8. Sweatshops are Hotbeds of Child Labor

One of the sad sweatshop facts is that corporations are culprits of child labor. As already mentioned, these companies are not interested in uplifting the local workers but to maximize their profit and productivity and lowering their expenses. An easy way to lower the expenses is to hire children for work.

They will get even less salary than the older people. This becomes even worse because they are required to give additional working hours. In easy words, they hire children at far lower wages and then give them extra work.

“13- and 14-year-olds working 20-hour days in factories in Honduras.”

Maitland, 600

This reveals that the atrocious attitude of the companies is not only against the working norms set by the World Trade Organization but highly manipulative. In another such incident, a 13-year-old girl was hired to work for over 12 hours a day in a cotton factory. This is highly reprehensible to employ small-age children in order to save money and maximize profit.

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It looks especially relevant in today’s world when human rights are becoming the single most important thing in the world. In the 21st century, children are facing nerve-wracking child labor which was a phenomenon in the 18th and 19th centuries.

Therefore, it looks quite obvious these multinational corporations are providing misleading information to the media to make an image but remain money-driven and exploitative at the core.

9. Sweatshops Offers Precarious Working Conditions

Sweatshop facts include harsh and precarious working conditions in developing countries by multinational corporations. It means they will not keep the safety of the workers. There will be inadequate technical equipment such as fire safety or poor infrastructure that may cost the workers their lives. They do so in order to save expenses and maximize their profit.

Maitland quotes a situation with “accusations of oppressive conditions at the factory and the Claiborne logo played well on that evening’s network news” (Maitland p. 597). It shows the hypocrisy and duplicity of the company that maintains a people-friendly image in the public through advertisements but remains oppressive and does not offer an environment that is safe for them.

For instance, they will not give a safety dress and other equipment when doing something dangerous such as dealing with electric wires, using a cutter, etc. This is not only a sad thing but a criminal act. But this does not matter because the media is portraying a romantic picture by showing ads.

10. Multinational Corporations Don’t Like Worker’s Unions

Sweatshop facts include corporations’ aversion to workers’ unions. Multinationals are especially exploiting the people in Africa and Asia because there are no workers’ unions. They remain watchful if there is any worker’s union that may demand a better working environment or ask for an increase in the salary. In fact, behind a $13 shirt, a $6-an-hour worker works, which is exploitation.

“As unions spread in [Korea and Taiwan], Nike shifted its suppliers primarily to Indonesia, China, and Thailand.”

Maitland p. 601

It exhibits the dual face of multinational corporations that cannot withstand working unions that may demand better working conditions such as having safety equipment and better infrastructure including building. The moment there were worker unions, they shifted to countries like China, Indonesia, and Thailand.

11. Multinational Corporations Like Corrupt and Oppressive Regimes

One of the 12 sweatshops facts is that multinational corporations like corrupt and oppressive regimes. They go to other markets where they find suitable places to exploit people for some more years. The author provides more insight into it showing the governments in those countries such as Indonesia were using coercive apparatus such as the police to put down the demands for better jobs and working hours.

It means they will go and offer even more oppressive working conditions, knowing people would offer no rebellion against them. They often secretly collaborate with corrupt or harsh governments to make sure the companies are able to exploit them.

12. Sweatshops and the Misleading Concept of Classical liberal standard

Apart from this, there is a need to dismantle the notion of classical liberal standards given by multinational corporations. Classical liberal standard is a concept that refers to the consent of the workers regarding job requirements and salary. It means if workers have consented to work in given circumstances then it cannot be unethical. According to Maitland, this is what “Marx called false consciousness” (Maitland, 603).

In other words, people are made to believe in certain mindsets to make sure they do not speak against it and let the companies exploit them. One of the sweatshop facts is that multinationals want to “reserve the army of the unemployed” (Maitland p. 604).

This will prolong their stay in that place with increased profits and decreased expenses. It exposes the approach of multinational corporations which is based on abuse and exploitation.

No Political Leader Should Support Sweatshops

Therefore, a good business leader should not endorse sweatshop conditions. One way to make sure the lives of the people become better off instead of worse off is to set background institutions. It is a pro-workers institution that will make sure there are adequate facilities and better salaries for the people.

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For instance, this institution will check if people are being intimidated by the company to work on lower wages or give extra hours. Also, if there is a precarious working environment, the organization will pinpoint the issues and will call for betterment by providing equipment or facilities such as fire safety.

Sweatshops Facts: Fair Salary is a Fair Demand

Another thing that a good business leader should do is to offer a fair salary. Maitland says there should be a “fair, decent or a living wage for an Ethical Issues in International Business employee and his or her family” (Maitland, p. 602).

This is another way to say the salary should be enough to fulfill all the physical needs of the workers as well as their families. It also means salary should be more than given by other local companies in the region or even the government. It will better serve not only the local people but also the multinational corporation.

Today, in order to make headway and survive the ever-increasing competition, companies are trying to adapt to the local culture. This will be another way to make more people buy their products. One of the sweatshop facts is that big companies keep oppressing them and paying less than the “minimum physical need.”

The increased awareness with the advent of the info-tech revolution will force the company out which will be a great loss. Therefore, a good, as well as intelligent business leader, will not resort to exploiting the local community but integrating its local traditions and culture.

Working Conditions Must Improve

Further, a good business leader should provide better working conditions. It includes both offering all the safety equipment as well as good infrastructure. It means they will not get substandard and worn-out machinery and gadgets. In other words, the worker will be given all the advanced and up-to-date technologies that help them in work.

Moreover, they will not be forced to give extra hours. As already mentioned, there will be no such thing as working 18 or 20 hours a day. People should work no more than the set standards of the government or the World Trade Organization.

Further, according to international working norms, there will be no forced labor. Children deserve an equal opportunity for education and economic prosperity. Therefore, a good leader should not employ child labor and work closely with the local communities to address and redress the issue.

Conclusion

To conclude, sweatshop facts include child labor, exploitation of workers, precarious working conditions, and many others. Maitland declares sweatshops unethical because they are highly exploitative and profit-driven. Instead of alleviating poverty as was expected, they are further widening the gap between rich and poor.

Many researches show the level of poverty in the poor economies of Asia and Africa (where these multinational organizations often operate) has increased manifold due to their manipulative strategies.

They are threatened to withhold their salaries or be fired. This makes them submissive and silent about the working conditions and low wages. In some cases, their wages are even below the set poverty line. That is why Maitland is justified in declaring the practice of sweatshops unethical.

                                            Works Cited

Maitland, I., The Great Non-Debate over International Sweatshops, Ethical Issues in International Business

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By Rizwan Bosan

I am a ghostwriter and blogger. My 3.91 GPA in English graduation earned me a gold medal. I also hold a degree in advanced writing from the University of California.

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