Sweatshops

Definition

Sweatshops are workplaces that employ workers under poor conditions, often with long hours, low wages, and unsafe environments. These types of workplaces are commonly associated with the manufacturing of goods for international trade and global supply chains.

5 Must Know Facts For Your Next Test

1. Sweatshops are often located in developing countries where labor costs are low, and enforcement of labor laws is weak.
2. The rise of global trade and outsourcing has contributed to the proliferation of sweatshops, as companies seek to minimize production costs.
3. Sweatshops typically pay workers well below the local minimum wage and require long work hours, often in unsafe or unhealthy conditions.
4. The use of sweatshops has been criticized for exploiting vulnerable populations and contributing to a race to the bottom in terms of labor standards.
5. Efforts to combat sweatshops include consumer boycotts, corporate social responsibility initiatives, and international labor regulations.

Review Questions

• Explain how the growth of international trade and global supply chains has contributed to the prevalence of sweatshops.
  • The expansion of global trade and the rise of outsourcing have led companies to seek out the lowest-cost production locations, often in developing countries with lax labor regulations. This has enabled the proliferation of sweatshops, where workers are employed under poor conditions with long hours and low wages. Companies can minimize production costs by taking advantage of the lack of enforcement of labor standards in these regions, leading to the exploitation of vulnerable populations.
• Describe the key factors that enable the continued existence of sweatshops in the global economy.
  • Several factors contribute to the persistence of sweatshops in the global economy, including weak labor laws and enforcement in developing countries, the ability of companies to easily outsource production to these regions, and consumer demand for low-cost goods. Additionally, the lack of bargaining power and limited employment options for workers in these areas make them vulnerable to exploitation. The race to the bottom in terms of labor standards, as companies compete to minimize production costs, also perpetuates the sweatshop model.
• Evaluate the potential impact of international efforts to combat the use of sweatshops in global supply chains.
  • Efforts to address the issue of sweatshops, such as consumer boycotts, corporate social responsibility initiatives, and international labor regulations, have the potential to drive meaningful change. Consumer pressure can incentivize companies to improve working conditions and labor standards in their supply chains. Corporate social responsibility programs can also help establish better monitoring and compliance mechanisms. Furthermore, international labor agreements and trade policies that incorporate enforceable labor standards can raise the bar for acceptable working conditions globally. However, the effectiveness of these approaches depends on sustained commitment, widespread adoption, and the ability to overcome the economic incentives that perpetuate the sweatshop model in the first place.

Related terms

Global Supply Chain: The global network of organizations, resources, and activities involved in the production and distribution of a product or service from the supplier to the final customer.

Labor Standards: The minimum requirements set for working conditions, such as wages, hours, safety, and worker rights, that employers must adhere to.

Outsourcing: The practice of hiring a party outside a company to perform services or create goods that were traditionally performed in-house.