Worker Abuse in Multinational Corporations

Worker Abuse in Multinational Corporations
Multinational corporations produce and sell merchandise to U.S. customers that are mostly made by workers living in third-world countries. Few people are aware of how and where the products they buy are made. People all around the world move to the United States for employment opportunity, but instead they receive unfair treatment in work places. Employees who live in third-world countries that are employed by large U.S. companies are treated poorly as well. Many of these companies are planting sweatshops in China, Bangledesh, Pakistan, etc. These famous brands are multibillionaire companies, and the people working in high positions make more than enough money. Surely, these chairmen and CEO’s can make an investment to make sure their products are being manufactured in a more quality factory with more qualified workers - not that the workers from third-world countries are not qualified, but they can be taught their worker rights and how to avoid safety hazards in these sweatshops. With more knowledgeable workers, they can be paid more reasonably and help the economy of these third world countries rather than increasing the gap of the upper class and lower class. Multinational corporations expand their business into undeveloped countries to hire cheap labor and exploit their workers’ rights by barely paying them and making them work in dangerous environments.
A multinational corporation is a huge company that has divisions in multiple countries around the world. Some recognizable companies are Nike, Coca-Cola, and Marbolo. The divisions of these companies are only subject to the laws of where those divisions are held, so if a company expands into a country, it only has to follow the rules of that certain country. Most companies plant their factories in countries in South East Asia, the Middle East, and Africa. Many of these countries are undeveloped, so there is less environmental restriction. These famous brands specifically target to choose to areas that do not have advanced marketing strategies, low literacy levels, and where agriculture is a dominant industry. Also, by hiring employees in poorer countries, these companies can get cheaper labor and also can get by more easily if they abuse their worker rights. Nike, the multibillionaire sportswear company, went to the extreme by not only using labor from out of the country, but also by employing “children as young as 10 making shoes, clothing and footballs in Pakistan and Cambodia” (Boggan, Common Dreams) to get even cheaper labor. Conducting business on a multinational level has many benefits for the company because of the advantage of obtaining low-cost labor markets, which is the main method of reducing production costs. Also buying material from outside of the origin of the company’s nation is cheaper as well. Setting up business in a developing nation exploits that area and makes the workers believe that getting a job at these multinational corporations are the best chance they have of making money. This just allows the gap between the upper class and lower class to expand because the workers of these famous brands can only retain in the lower class when working these minimal paying jobs.
Sweatshops are workplaces where basic worker rights are not respected. Large companies build multiple sweatshops that can fit many workers and can make as much merchandise as possible in a short amount of time. These factories are not safe places to work at and employees are constantly getting injured. Recently, in Bangladesh, Rana Plaza factory, an eight-story building, collapsed due to unsafe taking more than 1,000 lives of mostly females workers. This was the deadliest disaster in the history of the garment and clothing industry. This large factory made clothes for large companies such as Tesco, Carrefour, Benetton, and Walmart. Hasina, a survivor of the collapse shares her story of the day when she went to work. She told the IPS, “I heard from my colleagues about the cracks in the wall. We did not want to enter the building, but the supervisor forced us.” Now she has an injured hand that she can barely move, and is incapable of working. She has only received a compensation of 36,000 taka, which equals around $450. That is only around a pay of three months. The workers in the Rana Plaza factory “were paid starvation wages-14 cent to 26 cents an hour. They worked thirteen to fourteen hour shifts, six and seven days a week” (Institute For Global Labour and Human Rights) which accumulates to around $37 a month. The supporters of these free market economics defended sweatshops by saying that “they benefit the desperately poor workers of these impoverished countries who are very glad to get the work” (Meyers) These workers do get paid more than farmers or maids living in that area, but this is not a job opportunity worth taking when taking these safety hazards into consideration. It is not morally wrong to hire poor workers in undeveloped countries, but the corporations’ bribe to those workers by offering a little higher pay is not worth risking their lives. These companies should know better than to exploit their own workers and make them think that working in these sweatshops are the best opportunity of making the most money out of their living.
The popular belief of minimum wage is that most workers who receive minimum wage are teenagers, but “almost two-thirds of minimum wage workers are adults, and four in ten are the sole bread winner of their family” (U.S. Department of Labor). Finding the cheapest labor only many benefit the company at that time, but there are so many problems for the employees when they are struggling to make a living working full-time. There is even intense competition between many retailers and manufacturers to find the cheapest supplier, which means hiring the cheapest workers. The minimum wage has been made as a way to ensure that people can make enough money to be able to support themselves and their family, but ironically, that wage cannot even do what it was made for. Michelle Conlin , a senior writer and editor of the Working Life Department of Business Week magazine and Aaron Bernstein, a senior writer on workplace and social issues in Business Week examined more than 28 million American workers. These people work long hours for “low hourly wages without health care, pensions, paid sick days, or other benefits.” These jobs that pay minimum wage do not even give these workers room for any improvement or chance to climb up the economic ladder. Conlin and Bernstein argue that “one missed bus, one stalled engine, one sick kid means the difference between subsistence and poverty.” The way they live is not even in these people’s control. About a quarter of the current workforce earn less than nine dollars an hour, which marks the income of the poverty line for the average family. If the highly developed U.S. are having trouble with paying workers responsibly, just imagine how U.S. companies are paying their workers out of country. Most of the U.S. companies are famous clothing brands like Gap, Banana Republic, and Old Navy use sweatshop labor in under-developed countries. There are more than three million workers manufacturing in clothing sweatshops and in China, the minimum monthly wage is a $63.75. However, according to Jassin O’ Rourke, a U.S. consultant, “labor costs in china are higher than in seven other Asian countries. The average cost …is $1.08 per hour in China’s coastal provinces and $0.55-0.80 in the inland provinces”. Bangladesh offers the lowest minimum wage, at only one-fifth the cost of China. China’s labor costs have been decreasing, so of course there has been more production, but surprisingly, China’s export value decreased drastically by more than 16 percent. These export calls served as a wake up call for factory owners and now are trying to add more value to their chain of factories. When more than a quarter of the population is being paid the minimum wage, the workers are left to be stuck in this cycle of poverty. These jobs do not offer any room to get a promotion or get a bump in the raise for working a certain period of time. The factory owners and exporting companies become richer because of the money they are saving on cheap labor, but their cheap laborers are jammed up in the world of poverty with no where else to go.
There has recently been a huge spike in the U.S.’ unemployment rate. With all the people who do not have jobs, instead of abusing the people in third-world countries, these multinational corporations can offer more jobs for the people living in the United States. Conducting multinational operations has many ethical downsides, but that can be reduced or even eliminated by a better corporate leading strategy. Businesses operating in third world countries can opt to pay higher wage rather than the bare minimum and try to ensure better working conditions. These businesses do not just have to plant production factories when they want to expand their company into other countries. Instead they can try to benefit that local economy by setting up businesses that can improve the economic health of that area. If they set up more headquarters, call centers, or even outlets, there will be a wider gamut of job opportunities and room for the workers to improve and move up their social class instead of all just working in sweatshops. Even though if these corporations set up more occupations, there still has to be factories that make the merchandise, but these factory conditions have a lot of room to improve. Because of the recent disaster in Bangladesh, there are new deals made to improve the safety of the workers. One deal is called “The accord on fire and factory safety in Bangladesh”, where there will be safety inspections conducted in the factories. Also, the employees will be educated on how to exercise their worker rights, such as the right to refuse entry into an unsafe building. Many brands from the U.S. have joined this alliance. After the collapse, the BGMEA (Bangladesh Garment Manufactures & Exporters Association) have closed twenty factories and inspected more than 600 factories. Also, more job opportunities have been made for assessing the safety of buildings and factories. With all of these new job opportunities, there still is a minimum pay, but increasing that pay even by a little will help the economy immensely. A government board in Bangladesh recommended that the minimum wage should be increased to $68 a month, which is almost double the current minimum wage. A family of three living in Bangladesh needs about $67 a month to meet their basic needs. The last time the wage was increased in that country, “consumer prices have risen by 28 percent” (The New York Times). In 1993, the minimum wage was raised which resulted in a higher income for more than fifteen million families, which also helped those move above the poverty line. Even increasing the minimum wage by a dollar would let an average family buy seven more months of groceries, one more year of health insurance, utility bills, and four more months of basic housing costs (U.S. Department of Labor). A main concern of increasing the minimum wage is that people are afraid that it would cost a lot of jobs and reduce employment opportunities; however, studies have found that the previous two increases on minimum wage in the United States actually decreased the unemployment rate. Labor economist Professor Richard Freeman of Harvard wrote, “At the level of the minimum wage… moderate legislated increases did not reduce employment and were, if anything, associated with higher employment…” (U.S. Department of Labor). Raising the minimum wage would help workers and increase productivity because it would also reduce the threat of strikes and protests. There are endless possibilities to open up more job opportunities while treating workers fairly, working in safe conditions, and getting paid reasonably. These multinational corporations can help improve undeveloped countries with these solutions, which will result in bettering not only their economy but the corporations’ as well.

Works Cited
Stefanicki, Robert. "Bangladesh: Rana Workers Still Wait for Justice." Global Information Network. 30 Oct 2013: n.p. SIRS Issues Researcher. Web. 07 Dec 2013.
Meyers, Chris. "Wrongful Beneficence: Exploitation And Third World Sweatshops." Journal Of Social Philosophy 35.3 (2004): 319-333. Academic Search Premier. Web. 8 Dec. 2013.
French, J. Lawrence. "Adolescent Workers In Third World Export Industries: Attitudes Of Young Brazilian Shoemakers." Industrial & Labor Relations Review 55.2 (2002): 308-323. Business Source Elite. Web. 8 Dec. 2013.
ADDISON, JOHN T., and ORGUL DEMET OZTURK. "Minimum Wages, Labor Market Institutions, And Female Employment: A Cross-Country Analysis." Industrial & Labor Relations Review 65.4 (2012): 779-809. Business Source Elite. Web. 8 Dec. 2013.
YUEN YUEN, ANG. "China 's Labor Cost Problem." International Economy 24.3 (2010): 40-41. Business Source Elite. Web. 8 Dec. 2013.
Ragan Jr., James F. "The Failure Of The Minimum Wage Law." Challenge (05775132) 21.2 (1978): 61. Business Source Elite. Web. 8 Dec. 2013.
"A Living Wage in Bangladesh." New York Times 13 Nov. 2013: A30(L). Opposing Viewpoints in Context. Web. 9 Dec. 2013.
Conlin, Michelle, and Aaron Bernstein. "The Working Poor Are Not Getting By in America." Poverty. Ed. Viqi Wagner. Detroit: Greenhaven Press, 2007. Opposing Viewpoints. Rpt. from "Working ... And Poor." Business Week (31 May 2004). Opposing Viewpoints in Context. Web. 9 Dec. 2013.

Cited: Stefanicki, Robert. "Bangladesh: Rana Workers Still Wait for Justice." Global Information Network. 30 Oct 2013: n.p. SIRS Issues Researcher. Web. 07 Dec 2013. Meyers, Chris. "Wrongful Beneficence: Exploitation And Third World Sweatshops." Journal Of Social Philosophy 35.3 (2004): 319-333. Academic Search Premier. Web. 8 Dec. 2013. French, J. Lawrence. "Adolescent Workers In Third World Export Industries: Attitudes Of Young Brazilian Shoemakers." Industrial & Labor Relations Review 55.2 (2002): 308-323. Business Source Elite. Web. 8 Dec. 2013. ADDISON, JOHN T., and ORGUL DEMET OZTURK. "Minimum Wages, Labor Market Institutions, And Female Employment: A Cross-Country Analysis." Industrial & Labor Relations Review 65.4 (2012): 779-809. Business Source Elite. Web. 8 Dec. 2013. YUEN YUEN, ANG. "China 's Labor Cost Problem." International Economy 24.3 (2010): 40-41. Business Source Elite. Web. 8 Dec. 2013. Ragan Jr., James F. "The Failure Of The Minimum Wage Law." Challenge (05775132) 21.2 (1978): 61. Business Source Elite. Web. 8 Dec. 2013. "A Living Wage in Bangladesh." New York Times 13 Nov. 2013: A30(L). Opposing Viewpoints in Context. Web. 9 Dec. 2013. Conlin, Michelle, and Aaron Bernstein. "The Working Poor Are Not Getting By in America." Poverty. Ed. Viqi Wagner. Detroit: Greenhaven Press, 2007. Opposing Viewpoints. Rpt. from "Working ... And Poor." Business Week (31 May 2004). Opposing Viewpoints in Context. Web. 9 Dec. 2013.