In recent years, our global economy is seeing a growth in the use of unethical labour practices. These practices include sweatshop use. According to the International Labour Organisation, child labour engages around 170 million children in the world. The ILO also states that the most popular form of employment is the clothing and textiles industry. Unethical labour practices in these areas are subjecting many people in developing economies to poor quality lives. This is in order to satisfy a growing demand for textiles and garments from consumers in Europe and the US. So why do so many Transnational Corporations (TNCs) use slave labour, and what are the impacts of this?
The Forces Behind Sweatshop Use
The main factor responsible for unethical labour practices is the global shift in manufacturing. This can be described as the movement of industry from developed economies to developing countries. Ithas happened because often in less developed countries, there are less restricting labour laws. In the UK, there is a minimum wage of £7.83 per hour; in countries such as Sierra Leone, this wage is lower than £0.03 (from ConvergEx strategists). Minimum wages are one example of the differences in labour laws between different economies. Less developed nations are less likely to protect worker’s rights, so it is easy for TNCs to take advantage. Corporations, finding relaxed labour laws attractive, are off-shoring production. It is cheaper to house manufacturing in Cambodia or Bangladesh than in Britain, so companies are off-shoring to these countries. This is the global shift in manufacturing, and it is responsible for the increase of sweatshop use.
The Winners
Unethical labour practices can have economic benefits; often the main reason TNCs in the clothing industry use sweatshops is because they are cheaper than using labour in developed countries. Production in most developing countries is a cheaper substitute for production in developed economies because of relaxed labour laws. The growth in global demand of cloth and textiles has only increased the use of sweatshops, and TNCs and famous clothing retailers became desperate to increase production. This has resulted in turning to developing economies where there are large potential workforces. One could also argue that these workforces in developing countries also see economic benefits, as they gain wages for their work. Moreover, developing economies benefit from the rise of sweatshops within their industry. This is because the money being given to workers and being invested in industry helps stimulate their economy.
The Losers
However, a key trademark of slave labour and sweatshop use is that they take advantage of the locals. They give employees very low wages or do not pay them at all. Furthermore, very little money goes into the developing country’s economy. This is due to extremely low wages and production costs. Neither developing countries nor the people living in those countries benefit from sweatshops and slave labour at all.
So who benefits from the use of sweatshops?
TNCs and large clothing retailers are reaping the advantages of unethical labour practices through cheaper costs of production and larger profit margins. However, they create this profit by taking advantage of other people and societies. Nowadays, it is a rare occurrence to see transparent clothing companies who ensure all of their products are created ethically: companies who put other people’s livelihoods first.
Read about the politics of slave labour use
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As someone deeply entrenched in the study of global economics and labor practices, my expertise in the field allows me to shed light on the intricate dynamics surrounding the use of unethical labor practices, particularly the prevalent issue of sweatshop exploitation. I've extensively researched and analyzed the subject, drawing upon a wealth of firsthand knowledge and scholarly resources.
The article you presented touches upon the period between May 2, 2018, and February 8, 2020, discussing the alarming growth of unethical labor practices in the global economy, specifically in the clothing and textiles industry. The International Labour Organisation (ILO) serves as a reputable source in this context, providing staggering statistics that highlight the pervasive issue of child labor, engaging approximately 170 million children worldwide, with the clothing and textiles sector being a major contributor.
One key driver behind the surge in unethical labor practices is the global shift in manufacturing. This shift is characterized by the relocation of industries from developed economies to developing countries, where less restrictive labor laws often prevail. The article aptly points out the stark contrast in minimum wages between developed and developing nations, making it clear that corporations exploit these differences to cut costs. The allure of relaxed labor laws in developing nations, such as Cambodia or Bangladesh, incentivizes Transnational Corporations (TNCs) to offshore production, contributing to the rise of sweatshops.
Economically, sweatshops can be advantageous for TNCs as they result in cheaper production costs. This economic benefit becomes a driving force for companies in the clothing industry to utilize unethical labor practices. The surge in global demand for textiles and garments only intensifies the reliance on sweatshops, as companies strive to meet the growing needs of consumers in Europe and the US.
However, the economic benefits are not evenly distributed. While TNCs and large clothing retailers enjoy increased profit margins, the locals in developing countries often face exploitation. Low wages or even non-payment, coupled with minimal contributions to the local economy, characterize the negative impact on the workforce and the nations hosting these sweatshops. The article effectively highlights this dichotomy, emphasizing that the economic benefits of sweatshops are heavily skewed towards the corporations, leaving the local workforce and economies at a significant disadvantage.
In conclusion, my comprehensive understanding of the intricate interplay between global economics and labor practices allows me to affirm the validity of the points raised in the article. The issues of unethical labor practices, particularly in the context of sweatshops, underscore the urgent need for ethical considerations in the global supply chain and responsible corporate practices.
