Factories or sweatshops are often hazardous, with workers exposed to dangerous chemicals; cramped, poorly lit and poorly ventilated conditions, and supervisors have been known to verbally and physically abuse workers in some companies.
Workers are often forced to work long hours; they seldom receive overtime pay, and risk being harassed, fired or even jailed for protesting for their rights.
Multinational companies are free to locate where there are the lowest wages, so in order to maintain jobs in manufacturing, workers must compete to see who will accept the lowest wages and the most basic working conditions.
One of the main problems is that no sweatshops are actually owned by the companies whose clothes or shoes etc. are produced in them, so the TNCs deny the responsibility for the conditions. This has allowed the existence of sweatshops to continue, unnoticed on the global scale, until fairly recently.
Case Studies
Nike
Nike is the main target of anti sweatshop campaigners as it is the leading sportswear manufacturer, with factories in LEDCs like China, Vietnam and Indonesia. Nike uses only subcontractors (factories they do not own) to make their products. In the 1970s, most of Nike’s shoes were made in South Korea and Taiwan, but when there were increases in local minimum wages, Nike relocated to even poorer countries such as China, Indonesia, and most recently, Vietnam, where worker’s unions are illegal. There are many reports of shocking conditions and occurrences in Nike sweatshops, including the following, from Nike sweatshops in Vietnam:
Workers receive around $1.60 a day, and the average cost of 3 meals a day is $2
Many workers are forced to work up to 600 hours of overtime (without pay) per year. This is way above the Vietnamese legal limit of 200 hours of overtime per year.
Workers can only go to the bathroom once in an 8 hour shift, and they cannot drink water more than twice per shift.
One supervisor told a female worker that it is a common custom for men in his country to greet women they like by grabbing their behinds
Another supervisor fled after being accused of the rape of a worker
In Vietnam, lower wages can be paid to apprentices, but Nike exploited this by paying workers apprentice wages for many months.
In 1997, workers in the gluing section of a Nike contract factory were being exposed to 100 times the Vietnamese legal limit of Toluene, a toxic gas. Many workers in the factory had serious respiratory problems.
Nike can well afford to provide better working conditions in its factories and pay its workers a living wage. As a response to the much publicised criticisms, Nike has made changes in the area of health and safety, such as introducing a code of conduct (although it is reported that this is not well enforced at local level), and substituting less harmful chemicals. However, significant issues still remain. On the left are Nike’s goals concerning labour and manufacturing practices. Whilst such goals should be standard policy for TNCs, it is debatable whether they are all or even partly effectively implemented, to date. In Indonesia, an investigation found that 73.4% of Nike workers were satisfied with their relationship with direct line supervisors, and that 67.8% were satisfied with management. This is purely speculation, but these percentages may have been so high because workers were too afraid to speak out against their employers, as the need for regular employment at ‘at any price’ could have skewed these results. In conclusion, it is unlikely that Nike’s factories in LEDCs have many positive contributions towards development in those countries.
. .
Disney operates factories in South China, making clothes, toys and accessories, and conditions in these are also of concern. It has been found that:
Young women work up to 16 hours a day for as little as 10p per hour
Workers in some factories are fined for talking or going to the toilet without permission
Factory managers falsify documents and records and force workers to lie to monitors about conditions.
Food provided is described as barely palatable, and living conditions provided by the company are below humane standards.
Not all TNCs operating in LEDCs exploit workers. Coca Cola also has factories in Vietnam, but it doesn’t use a subcontractor; workers receive good wages, and benefits such as sales training and English lessons.
Why is there always an abundance of workers for TNCs, if so many of them exploit workers?
The general attitude amongst workers in LEDCs is that, understandably, a poorly paid job is better than no job. This is the reason there are always workers willing to be employed by TNCs.
What is being done to combat the problem?
Many TNCs are now in the process of revising their labour practise standards according to international levels, to avoid being associated with exploitative practices and because of bad publicity and the public’s increasing awareness and aversion towards buying products manufactured by cheap labour in sweatshops.
Conclusion
It is clear that many TNCs have, and still continue to exploit working conditions in LEDCs. It is not enough for TNCs just to create jobs in LEDCs; I believe they should have a more social conscience and should try to put some of their ample profits towards providing opportunities for the workers, and helping development in the host country. If profits were lowered even by a small percentage, most TNCs could afford to pay workers much higher wages and greatly improve factory conditions. Some predict that as countries become more developed, TNCs will continue to relocate their manufacturing in poorer, less developed regions of the world, like Cambodia and Pakistan, in order to continue paying the minimal amount for maximum profits.
