RAW #2: 3-2-1 Contact!


RAW #2: 3-2-1 Contact!

Text: Karl Marx, “Wages of Labor,” Economic and Philosophical Manuscripts of 1844

Goal: Draw connections between Karl Marx’s ideas in “Wages of Labor” and the working conditions and wages in Bangladesh.

Directions: Identify a specific example from the case studies about the working conditions and wages in Bangladesh that you can relate to Karl Marx’s ideas, as he expresses them in “Wages of Labor.”

3 Write down three ways that Marx argues that there is an imbalance of power between workers and capitalists (owners), that leaves the workers at a disadvantage. For each argument, write down a relevant quote from the text.
2 Write down two ways that workers’ wages or working conditions in Bangladesh relate to Marx’s arguments in this text. For each comparison, write down a relevant quote from the text.
1 Write down one question or criticism you have about Marx’s arguments.
Contact! Write down a paragraph about how you think Marx’s ideas do or do not relate to the wages and working conditions of workers today.

Due Tuesday, January 28th.










The Article

one might suspect that the athletic sneakers produced at the factorv may attempt
to present an image associated with uS products (after all, Deportes Mike is abit
unusual for a Mexican name), but no mention appears of foreign inr.estment or
exported products. In fact, the vast majority of child labor situations and general
“sn’eatshop” conditions in developing countries bear no direct connection u,ith
international corporations. The World Bank estimates that less than 5 percent of

child laborers in developing countries u’ork in export industries.2

Nevertheless, the article’s brief reference to a proposed free trade agreement
betu’een Mexico and the United States (later adopted, u’ith Canada, as the North
American Free Tiade Agreement [NAFTA]) foreshadows globalization’s expanding
network of interrelated business ties. Increased e conomic interdependence among
nations fbrces issues such as national labor standards and practices on to international
poiitical agendas. Simultaneously, governments in economicaliy linked
nations arguably possess greater ethical responsibility to address abusive labor
practices and workplace conditions occurring in partner countries. International
corporations that use intergovernmental agreements to fbrge new trade and FDI
ties likewise become more closely linked (through increased potential causality,

capability and proximity) to the loreign “su.eatshop” conditions portrayed so publicly
in the media since the earlv 1990s.

Assessing supply chain responsibilities

Assigning ethical responsibilities to invested owners of foreign “sweatshops” constitutes
a relatively simple and straight-fbru’ard task. MNEs with ownership stakes
in foreign production facilities are direct employers of the facilities’ workers, at
least to a degree corresponding to the percentage of ovr.nership. The central bond
between employer and employee creates a direct and important stakeholder relationship
r.vhere the firm’s role, proximity, awareness and capability carry both
legal and social contract responsibilities toward its employees. The MNE can set
labor and workplace conditions at fully or majority-orvned foreign afEliates, within
the parameters of local law. The MNE may also exceed legal minimum standards
on issues such as wage rates or safety standards if local law falls below an ethical
minimum, or the MNE chooses to follow a higher maximai corporate social

responsibility standard.

The more novel and controversial application of corporate responsibility arises
when trade rather than FDI connects a business enterprise to the workers involved
in a foreign production process. In particular, importers and,/or retailers in
developed countries face increasing pressure to improve conditions for foreign
workers, although the firms lack the proximity or emplover role inherent in FDI
ownership. Instead, civil society groups confront these firms, forcing an awareness
of “sweatshop” conditions in factories urhere imported goods are produced, and then
cali upon the importers and retailers to use their capabilities to improve foreign
labor practices and rvorkplace conditions. Sometimes critics suggest direct complicity
with worker abuse, asserting that the purchasing firms’ low price demands

or short delivery schedules lead to inadequate worker wages and forced overtime.
More commonly critics charge importers and retailers with beneficial or silent

complicity, reaping higher profits from low-wage foreign labor while ignoring the

uglier aspects of their workplace conditions.

The traditional corporate response to such complaints rests on the argument

that buyers in one country cannot impose labor stanJards on producers in inother

country when no ownership ties exist. This rationale proved largely persuasive

untii the 1990s, when changing circumstances altered many opinior.-r. l,t”diu stories

increased public awareness of “sweatshop” conditions, fostering a sense of critical

need. In assessing relative ethical responsibility for action, tie immecliate local

employer seemed either incapable of funding improvements or inaccessible to clirect

Pressure from foreign critics. Local gor.ernments often appeared ineffective or

corrupt and unresponsive to criticism. Other national governments hesitated to

interfere in the internal_affairs of sovereign countries. Only the most egregious

forms of labor abuse, such as prison or slave labor, or children employed uJroidi”r,

or prostitutes, reached the political level of diplomatic discussion in international

civil society_groups then looked for the next most capable potential actor.


Laying the subsidiarity chain of ethical responsibility alongilde the international
supply chain of most “sweatshop” industries, the groups found importers and
retail firms. These enterprises lacked geographic and political proximity as well as
orvnership ties to the abusive conditions, but further analysis leti many critics to
conclude that importers and retailers nevertheless possess sufficieni capabllity
to press for ethical improvements. In contemporary international business, control
need not rest on ownership. Indeed, analytical reports and international agreements
increasingly refer to “low and non-equity” foreign investment.3 In typiJat ,,su,eatshop”
industries, high-r’olume purchasers olten exert demonstrable iniuence, even
control, over for-eign production processes. For example, procluct quality control
requirements, often including overseas factory inspections, clearly demonstrate
the capability to reach inside the factory and influence the produciion process. If
purchasers can determine product quality standards, could/should they also
determine the labor standards and rn’orkplace conditions where the proilucts are
produced ?

Ci”]l society activism-on behalf of lbreign “sweatshop” workers helped galvanize

US public opinion behind the issue as one of critical need and focuseJ atte]rtion on
prominent US retailers as actors capable of bringing about improvements. one well
publicized example emerged around two young garment workers frorn Central
America, Claudia Molina and Judith viera, u’ho traveled to the united States to
tell stories that rec
all some ofvicente Guerrero’s plight, rvhile adding a few new
dimensions of abusive treatment. on many labor issueq the factory o*i”, appeared
the most responsible actor, often based on causal connections. Boih factorlei where

viera and Molina worked involved FDI links, but the Taiwanese and Korean
investors, respectivelJ’, faced little ethical pressure from government or cir.il society

groups in their home countries, and the governments in El Salvador and Honduras
appeared to lack the resources and,/or political will to enforce their labor laws in
economically important foreign trade zones.4

By contrast, major foreign purchasers of the factories’garments, such as the
Gup, J. c. Penney and Eddie Bauer, might prove more responsive. These firms’
competitir.eness depends heavily on brand name image, which can be vulnerable to

criticai public actionsly civil.society groups. organized tours for the garmentrvorkers put a human face on “r*”atriro-p” statistics. Anecdotal examples can iea’e
P^t”-Try impressions, such as the differer-rce betrveen the g20 frr.tu.” price of aGaplshirt and the reported 16 cents earned by the worker *io -ua” the shirt.

Surelr someone possessed dre capability to proride Molina *ith the exrra r0lemPlras $eekly (s l)that she considered lair, ilfirsr the abusire trearmenr stopped.’
firms indicate a willingless.to investigate ubrr”

^,r”I:il,ITO:..,ttrg “duig”r,

atthough their statements and actions .’u.u..€uiding horv clearri or fulry tt u”i”pi”y

for ary “sweatshop”_”o.,d?tion,:.;;”r;;;i t[” mpo,t’,g firms


mrgnt do about such problems. Indeed, exactly wfiar should be done raises otherethical questions. should.the,importers termiiate ttr”i. pr.”rr”r:”, 1u,rd reave) orretain the buyer relationship but insist on impro..”d

(stay and reform),


rn8 hl8lre.

for the garments to provide extra tunding to carry

T:1lP-t,:::^lJ |rices

out the rmprovements (both assist and help protect)?

Sometimes foreign owners of “srveatshop” factories respond to criticism andby simply shifting production to other locations. Srich a move wourd not


neIP the abused victims; in fact, unemploFnent would leave them irr an even worsecondition. Exhibit 5.2 reflects this fear. i”o-purr1.,, capitar is more mobire than its

lr.:f::,1:ll* elploleel vulnerabte to lay o{Is if th”i
“,,”or,.ug” p’blic criticism

ur rrerr emproyer s practices. Lisa Rahman experienced u piuri shutdown in

l:iq]lo”:n u’h”en public pressure on Disney reportediy led a subcontractor toenc purchases lrom her empJorer’s ractory. resuhing in r00 workers losing their

jobt Disney mav not have directed thc subconrractor to terminate the rclation smp (an act ot commission), but some critics mig}t consider Disney,s failure to

encourage or assist positive reform (omission)

ur fulhtrg short of its corporate sociairesponsibility. Alternativeiy, perhaps the subsidiarity jrain .r.”rf.rrsrririty shouldstop before it reaches Disney, or support for labor rerorms at tie prant might be

discretionarv maximal .thi”ut action rather than an obiigatory Sthi”ul


the flon of producrion in one r.vpe of inlernarionat suppll


cnarn arrangement where subcontracted foreign *o.k”r, produce brand_namegoods exported for final retail sale in other countries. The ,,si,eatshop,,


asserted responsibility for worker conditions flows in reverse, arisirrffrom informed

consumer pressure on retailers and brand holders th_at pos”es5 coniactual leyerage
over foreign subcontractors. consitler r,vho should have done what among suppry
chain ac.f11| more proximate to the “srveatshop” rocation before retailers might bear
responsibility as actors oflast resort
.gi-.rt “sweatshops,’ recorded a series of notable successes,


marnry based on stimulating the adoption of individual corporate and/ or industry_w-ide codes of conduct._AfTected production processes range from weaving rugsand stitching soccer balls to

clothing and produciig u,t t”,r” footwear.6


Nike, Reebok, Adidas, Levi Strausi Eddie Eauer,’phirtips-%n Heusen ancl Lizclaiborne number among.the largest and best-known

footr’vear brands that facel orgu”L”.l public pressure and responded with codes to

“o-iuni”, *ith clothing and

go’ern labor conditions in factries producirlg their goods. trr’-ort *r”r, contracts

lvith supplier firms require udhe.”n”” to minilmum code standarcls on issues such as

Exhibit 5.2 Labor Complaint Dilemmas in Bangladesh

‘Already Old’ In Bangladesh

Co alitions Bring Attention
To Alleged Labor Abuses

By <rnsrw DowNEy czuMSLEy

Washingkn Post Stalf Writer

Mahamuda Akter, a shy eighteen-year-old who

weighs 79 pounds, first went to work flve years ago

because her parents, tenant rice farmers, needed

the income she could eam by taking a job in

Bangladesh’s burgeoning garment industry.

“It was for my family’s survival,” said Akter, who

eams about $36 a-qrc_l!h, orfZgs4eggour, sewing

gaments destined for Wal-Mar1 stores in the United

States, including the Ozark Trail, Faded Glory and

Spoftrax clothing lines. She said she rs required to

work from 7:30 a.m. to t0:00 p.m. most clays and

sometimes until 3:00 a.m. if there is a rusl.r of orders.

She’s frequently hungry and almost always tired, she


“Living and working like this, by the time you

are twenty, you are already old, and your health is

failing,” she said. “When you reach thifty, they fire

you. It is notjust. I have no savings. I have nothing.,,

Akter came to Washington to tel1 her story yester
day as a coalition ol civic, labor and religious

organizations launched a public campaign seeking

to highlight what it calls labor abuses in Bangladesh

and other poor nations.

Spearheading the push is Charles Kemaghan, the
labor activist who exposed poor r,vorking conditions
at Central American factories that made goods for
the Kathie Lee Gifford clothing line.

Wal-Mar1 Stores lnc. spokesman Bill Wertz
acknowledged there have been “violations ofworking
hour standards” at the factory where Akter works.
He said the retail giant is trying to work with the
suppliers to make improvements. If the manufacturer

doesn’t shape up, Wertz said, Wal-Mart may sever its
ties to the factory.

“We can’t condone certain kinds of practices
and won’t do business wrth companies that fail to
rmprove,” he said.

That’s what Akter is afraid ofl If Wal-Marl

terminates its purchasing agreements with the
factory, she and her co-workers could find themselves

complaining about bad working conditions, rncluding

twelve hour workdays, filthy restrooms and un_

sanitary drinking water. She worked at the Shah

Makhdum factory, which manufactured goods for

Walt Disney Co., including clothing in its Winnie

the Pooh line.

“I was crying all the time,” Rahman said.

After workers at the plant complained and took

their woes to the media, Disney pulled out of the

factory, leaving 200 employees out ofwork, she said.

Mark Spears, Disney’s compliance director, said

the company has “experienced poor conditions

in Bangladesh.” When the company investigated

the allegations, it found that conditions were not as


as wor
kers had alleged. But its subcontractor
decided to cease buying goods from the manufacturer.
“Clearly the publicity may not have helped,”
Spears said.

Kemaghan said the ease with which multinational

corporations relocate has a chilling eflect on the

willingness of workers to speak out about what he

said are widespread abuses ofworkers in many poor


He said he has been urging Disney and other

companies to stay and work to improve conditions
rather th”n exit quickly to,arloid.badlubli,ce. .,All
it would take is one word from Michael Eisner,,’
Disney’s chairman and CEO, and the jobs could
retum to the factory where Rahman worked, he said.

Bangladeshr officials said that the country has

good labor laws and that it is unlikely any factories
would permit such poor working conditrons. ..Can

person work eighteen hours a day?,’said Mohammed

G. Hussain, corlrrerce counselor lor Bangladesh,s
embassy in Washington. ,.It,s impossible.,’
The officials questioned why Kemaghan and his
associates are raising the sweatshop issue publicly,

pointing out that it could affect employment in the
deeply impoverished nation, where 40 percent of
adults are unemployed.

Lisa Rahman, nineteen, of Dhaka, Bangladesh, Source: Z/za Washington Post,25 September 2002,
said that’s what happened at the lactory where p. El. O 2002 The l{ashington pasr. Reprintedshe used to work after she and other workers besan with permission.
Fae tory.:woikdlr


Flow of responsibility in
sweatshop campaign

Flow of production in
sweatshop campaign

1 ,Brand h0lddr’ Contract {actory

Figure -5.1 Contracted labor supplv chain

employee age, hours, wages an<l unionization. when companies and reler.ant civil

society grouPs achieve general agreement on such standarcls, clebate olten shifts to

implementation issues, particularlv monitoring in inilividual lactories to assure

written standards translate into-altered practicJ. contentious points invorve whomonitors compliance (the purchasing companl. or its contracted auditors versusindependent auditors or locai civii.soc]ety g.o.,pr;, the transparency ofthe process,
and sanctions for non-compliance

lt”.minuTron of contracts ,L.rr, lequirements rbrassisted rclormsT. T

Living wage, debt bondage and union rights

wage standards represent one of the most problematic labor issues in code of

conduct debates. The wage debate revolves around the question of where to set

an ethical minimum wage rate. taditional choices involved either the local legal

minimum wage or the local industrv market wage (that may fall below the

legal minimum where laws are not rvell enforced;.8 In many’deveioping countries,

neither choice appears ethically acceptable to civil society gro.rpr. Governments

often set_legal minimum wage rates iou. as an incentive to attrait foreign invest
ment and promote labor-based exports. In these countries, excess labor acts as

a competitive economic factor endowment, meaning market forces of supply and

demand also repress wage rates. Under these circumstances, either standird can

leave workers with insufficient money to live, even well belor,v the local poverty line.

The concept of a living wage attempts to acldress this issue by setting an ethical
minimum wage rate based on a lvorker’s survival needs rather than other possible
distributive justice standards such as contribution (productivity), equality, seniority,
etc. The normative argument draws on the employee’s position as a central stakeholder
to rvhom the llrm o\’es a strong social responsibility. A major difficulty,
howeveq lies in defining “living lvage.”e For example, rvhile providing enough -on”y q
, ”
for minimum survival requirements appears reasonable, agreement rupidly air-i.,

appears as the list of included items lengthens:food. +L}.l”g, housing-hpqllh glre,


transport. educatio-n, say_ing1, erc. lf a lisr of items is agreed und pri?id b1 the local
cost ol lir-ing, troublesome questions still remain regarding, for example, whether
a worker’s salary should provide only for that person or also for family members
(spouse, children,/how many, extended family). wage-related standards may also
conflict; for instance, two workers, one single and the other the head of a large
househoid, might require a different minimum living wage, but such a clifferential

would conflict with an equal pav for equal rvork standard.

Many companies object to extending social responsibility beyond the direct
employee relationship, particularly in cultures where large extended familv ties are
common and important. Living wage standards, particularly if liberally defined,

could quicklv push labor compensation far above local law or industry market levels,
lear’ing the firm at a competitive disadvantage. Losing their 1or,r, w.age rate advantage
could also drive investing or purchasing firms to look elsewhere ?or a production
site, leaving the rvorkers without anv \.ages. Companies also argue that governments
or other social institutions should be responsible for providing individual minimum
income needs; employee $’age rates should be set by market forces that responcl
to n’orker productivitv (contribution to the production process;.r0The rejoinder
from critics often relies on the Tavis thesis that corporate social responsibility
becomes greater r,vhere market forces do not u’ork cfficiently and governments are
ineffcctive or unresponsive to the needs of their people circumstances that mark

many developing countries. 1 1

A central argument in setting the terms for an ethical minimum wage revolves
around the issue of free choice. Emplovers contend that r,yorkers themseives should
decide r.vhether an offered rvage impror.es their situation rather than setting some

arbitrarv rate above market conditions that may preclude possible job offers. Free

market theory suggests that a r,vorker u’ili not accept a job that does not improve his

or her condition. Free acceptance of an emproyment offer thereby constitutes

evidence of an ethical *ug” .ut” because the worker considers it an improvement.

critics dispute this contention by asserting that workers do not have free choiceunless Yiable alternatives exist tiat provide an effective choice. In countries with

inefEcient market forces and structurally high unemployment,-acceptance of a jobth.u’pll’: belou’ a living wage constitrt”, n j”rp”.ut.

ethical choice. “lioi”” rather than a free ancl

Debt bondage represents

an emerging labor relations issue lbr internationalcorporations that combines a situatiorioidesperate

choice witlr hiring practices

that exploit the vulnerabilities and.relative powerlessness of impoverished workersd,”
1:”” de’eloped countries. This practice appears in countries such as Taiwan,

South Korea and Maraysia that-impori *o.k”.r’i.o-p””;;;”;;bors (especially
vietnam, Thailand and the phiiippines;. By employing fo..igr, *?.r.”., at one-halfto two-thirds the rate paid Jocal “-ploy””r, th”r”
“orrrr”t.i”, “i’ compete u,ith china

and other low labor cost regions. The debi bondage arises from lulo. brok”., *hofilI open jobs by recruiting ioteign workers -for a fee to be paid by the workers.

A Fortune article r”poit”d o-1 “ru-
pr” of such u’ u..u.rgl,,’”rrt-*h”.”

a .roman

from the Philippines

funds to pay a rocal rabo. brlker oj,soo 1br a job in


Taiwan r,rith a monthll salarl of s+00′t_uny ,i*”r-.”_p.*ff. pay in rhe

Philippines, if work were eyen available). upon arri’ar in Thiu,an, another labor

demanded $3,900 to complete ,h” u..n.,g”-”nts. As a resutt,


tne woman

s pay check quickry disappeared beftre she could r?rd -or”y home to pay for her initial interest-beari”g loun in the philippines. From her g460 monthlysalary,Taiu’an’s income tax deduited 991, the ru”io’.y retained siz rorroom and

board, the labor brokerinTaiwan w-anted g215, and gg6 wentinto a required savingsbond redeemable only on completion of a three-year contract. This type ol bond,sometimes termed,,rl


workers to assure even greater control.l2

, Surveying possible actors with an ethical responsibility in such a case reveals

the most proximate, causalry connected parties pursuing financial self_interest

objectives at the womar,’,

“*p”‘rr”. Ho*”,ri., in adiition to-the ,,free
choice,, argu_
ment, these actors could as11it they rack trre capabirity to off”, i-p.J.,ed conditions.
citing competition from china, Tui*’un”r” employers can claim the jobs .^ourd

not exist at normal locar market wages. The_ national government shapes rabor

regulations to permit special

“”.-ptTon, and permits iir”.i-irrutory treatmentof foreign workers to facilitate export-orientei operations. If neither the localemployer nor government takes corrective actiol, attention begins to shift along the

supply chain to the next most capable, responsibre party -thJforeign purchaser.For corporations that

. -u”c”pt u ,ociar t”spo,isibiilty ;. ;;r:”e


in.overseas”sweatshops,” the debt bondage irr.,” p.”r”rrts a rojicar but difEcultextension of responsibirity.

For exampre, #”.r”u, subcontractors courd offer their

employees wage rates high en^ough to meet the code .”qrri.”-“.rts of an MNEpurchaser but then effectiv:er1,,offs”i th” *ag”, r,vith deductions and expense charges.

Should purchaser code standards and mo?itoring programs be expected also to

in’estigate and control tlre. ro]es phre^d_b.v labor f,rokeis? If direct imployers andlocal governments collude in the use of debt bondage practices, ,horra supply chain

ties impose subsidiarity chain responsibilities on a foreign importer to control labor
broker practices in the Philippines in order to improve the labor conditions in
subcontractor plants in Taiwan? The Fortune article suggests that production outsourcing
by high-technology companies such as Motorola and Ericsson may now
pose ethical challenges similar to those faced by Nike, and that an awareness of the
debt bondage issue wili increase their responsibility to address such problems.l3

“Sweatshop” practices exist in manv regions, not just in developing countries,
even in their most extreme forms. For example, in 1995 state and I’ederal officials
raided a “su-eatshop” in El Monte, a section of greater Los Angeles, r,vhere Thai
u.orkers were confined behind barbed u.ire in a garment factory, working seventeen
hours a day at wage rates as lou’ as 60 cents an hour. Most w’orkers faced
debt bondage requirements to repay charges for transport and false travel docu
ments. This incident sparked equally shocking media reports on the prevalence
of US “srveatshops.” California’s apparel industry reportedly included 1,000 illegal
f’actories, one-sixth of the total in the state. According to a 1994 government survey,
one-half the legal firms paid less than minimum \.age and 93 percent violated health
and safet,v regulations. 1a

Robert Reich, US Secretary of Labor at the time of the El Monte raid, invoked
the supply chain responsibilit,v concept bv publiclv identifying large retail companies
whose names appeared on boxes in the “srveatshop.” Even though the retailers
Iacked legal responsibilitl’, they agreed to a statement of principies calling on their
suppliers to follorv labor law standards. Responsibility for compliance with legal
standards u.ould seem to fall first on direct emplovers and then on the government,
but there n-ere only 815 US federal labor investigators to monitoi6.5 million
companies. According to Secretary Reich “We need to enlist retailers as adjunct
policemen.”15 If the US government lacks the capability or political r,vill to secure
labor rights at garment factories in the United States and must seek voluntary
retailer supply chain involvement, horn’ much less capable would developing
countries be to enforce labor 1au’s against”su’eatshop” conditions, even assuming the
governments valued worker rights above corporate competitieness or economic
grou’th objectives?

A final labor relations issue often associated w’ith the “su’eatshop” debate concerns
the right to collective bargaining, or independently organized labor unions.
“Sweatshop” emplovers generally discourage workers from forming unions, using
tactics that range from harassment and intimidation to {irings and physical r.iolence.
The UN Declaration recognizes a right to organize trade unions in Article 23.
Freedom of association is a condition for ILO membership and core ILO con
ventions 87 and 98 address these rights.16 Despite these international standards,
national lau’s vary in their treatment of unions, ranging from outright prohibition
or government-connected unions to iegal protection but lax enforcement. The
potential for unions to serve as organizing bases for political activities makes this
issue particularly sensitive in many nations. As discussed briefly in Chapter 4, actions
by foreign corporations to alter organized labor practices in other countries can
be seen as unn-elcome political involvement or eyen improper interference in a
nation’s internal affairs.

Most corporate codes recognize workers’ right to organize and pledge not
to interfere nith such efforts but defer to the primacy of local law, even u’here

regulations inhibit iabor organizing activities. These codes essentially stop at the ,,do
no,harm”premise rather-thun h.l-pilrg to protect or assist u,orkers to attain their

rights’ Such a stance ma)r be justified oln th” buri, of societal role distinctions or lackof proximitv or citizenship status, especialry for non-invert”d

“.t”.prises that

just purchase products from unafEliated forelgn factories. Nevertheless, in somecircumstances’ corPorate initiative, coupled *ith int”..rutional business capability,can influence unionization policies.

An unusual case reportedly occurred in China at fbctories controlled bY HonqKong andTaiwanese

investors ihat p.odu”ed goodslargerf r”.-n*’J”t.’i”;i;;;.tReebok’s code of conduct supports ihe right tJ freedof oi association and collective

bargaining’ the company’s ii.e”to. fo.ohrr-un rights programs stated: ,,we
canthrou’ up our hands i” itri”u and say: ‘The ACFTU [Ail china Federation ol.Trade

unions] is government-controile.r lnd therefo.” ,n’.

“u. do nothing., or we canengage in experiments like this in democratizing the union in the hope that u,orkersof the opPortunities this privides them.”17The experiments he


rererred to \’ere onen union elections with outside observers, thought to be the firsthelcl within chinal Reebok encouraged and assisted its subcontractors in su
ful negotiations with rocal governient and union authorities io recognize the

elections, aided bv the chineie desire to attract FDI and promote export-orientedproduction. The Reebok representativ. ulro .rot”a potential benefits for the firm,

including more loval *orke., and recluced rabo, tu’rrro’”.;;”.’”gg”rted that true

worker representatives could take up labor issues, such as reported abusive treat_

ment and excessive o’ertime, that iould violate Reebok code standards agreedto by its subcontractors. Although Reebok conducts factory irrrp””iio,rr, ,,Factories

in china are incredibly sophistilted at finding $.ars to {bol us. The best monitors are the workers themselves.”ls
The potential role ofrepresentative unions can encompass standard setting aswell as implementatt?”

i”9 monitoring functions. on” opprou”h to establishing

minimum ethical standards for,emproym?nt practices attempts to define the specificcontent of standards that would uppty
“””ry#lere. Hence, airr”t” o”..r., o’er rvhich

number to use as the minimum *-”.t rng’ug” for chirdren, the maximum number
llf:yt for a working day, or rh” u-ouit o’ipuy rhur wourd consrirure a minimum

‘vrng wage. An alternative, more process-oriented approach relies on union_
ization and collective bargaining to determine the best stundu.d, in each situation.
whiche’er specific standa-”rd “-””.g”, from coilectirr” uurgui,’i,’frr.”ra be acceptedas ethically justifiable rather than utie-pti.rg to define ,pJ.ifi. .i,1″-”, by legal fiat

or corporare code. Suoport lor unionizarioi therefor” t”.o-”,

a priorrty objecrire

lor labor supporlers ,, ho b.”li”,

pro.”r, ,-urh”;;il’;r;;;:;;rl::_”s

n i’ l ield

the best ethical w’ork standarcls to adcrress “sweatshoi” conrlitions.

Communities and the foreign production process

Modern MNEs locate production processes in many nations, selecting investmentsites offeringthe best clmpetiti’e combination of factors such as 4,age rates, accessto raw materials and markets, macroeconomic strength, lon taxatiJr and poriticalstability. corporations choosing to purchase f.om fo.jgnr.rr”o’rr.u”iors rather than

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