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Lately in the news, there is a lot of reporting on Apple's suppliers ( http://www.nytimes.com/2012/01/26/business/ieconomy-apples-ipad-and-the-human-costs-for-workers-in-china.html?hp ). The implicit accusation is that some American device makers who use Chinese factories look the other way as the factories treat workers very badly. The question I have is: what is the proper role of a company when it is using subcontractors? Should it be profit-only or should a company have any "concern" for the workers who work in a subcontractor's factories? After all most of the people working in Chinese factories assembling Apple devices are working voluntarily (the conditions in the factories are presumably much better than rural village life in China). Why do people feel that we should hold Chinese factories to a standard that the West achieved after many decades of progress? The supporters of "workers rights" point to cleaner, nicer factories making sneakers as an example of how to do "the right thing" ? I must admit I am a bit confused on this topic. What do you think ? It strikes me that Western do-gooders may actually be doing more harm than good by interfering in the normal progress of a country as it moves from rural, stoop labor to assembly lines to knowledge work.

asked Jan 26 '12 at 09:24

Danneskjold_repo's gravatar image


edited Jan 26 '12 at 18:07

Greg%20Perkins's gravatar image

Greg Perkins ♦♦

Profit and concern for workers is not contradictory. In fact, in a proper government, the two would go hand in hand.

The tricky part is that Chinese workers are not living under a proper government. They're not living under anything anywhere remotely close to a proper government. You say the workers are working voluntarily, but I don't think they are. My understanding is that the freedom of work in China is much less than that in the United States.

Moreover, given worker visa limits, we are not living under a proper government.

Given that, I'm not sure what the proper answer is.

(Jan 26 '12 at 11:15) anthony anthony's gravatar image

According to Wikipedia, "It is illegal for a citizen of China to emigrate without getting permission from the Chinese government."

Chinese workers are, essentially, hostages.

(Jan 26 '12 at 11:18) anthony anthony's gravatar image

I have not witnessed government coercion on a large scale in the area of Chinese factory work. The factories tend to be in cities and pay much more than laboring in the fields. The rural poor migrate voluntarily to work at these places from what I could tell. And they did so in vast numbers. Now of course, the Chinese are not living in free circumstances but in the area of factory work, there is not much direct government involvement (i.e. there are not guys with guns making people work on a line). This brings up an interesting point: should US companies work with dictatorships, period?

(Jan 26 '12 at 11:23) Danneskjold_repo Danneskjold_repo's gravatar image

Yes, they're not forced at gunpoint to work in the factory. But are they free to solicit venture capital in order to start their own company? I don't actually know the answer to that.

As for whether US companies should work with dictatorships, I think first the US has to relax its own labor laws, and second the US has to open up immigration (essentially make worker visas "shall issue" so long as the worker is not a criminal or medical threat).

That alone should decimate the economy of dictatorships, as we poach off their best workers one by one, though it might be seen as an act of war.

(Jan 26 '12 at 11:32) anthony anthony's gravatar image
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Should they care at all? Yes, if it affects their rational self interest. A rational company will take into account all the facts that might affect their interests (including treatment of workers). I can think of numerous ways in which the treatment of suppliers' workers could affect the rational interest of a company---for example, the quality of parts will be lower to the extent the employees are mistreated, the stability of the supply will be lower to the extent that workers are upset (e.g., more strikes, etc.), etc.

However, the extent to which all companies should care (i.e., how much effort they should put into investigating it) cannot be determined as a general matter. Each company is going to care to a different degree, based on the unique facts of their situations (e.g., how many different suppliers do they have, how vital is the part the supplier is making, etc.). It may not be in the company's interest to spend lots of time and money looking into how their suppliers' workers are treated. The proper balance will have to be determined by them like any other business decision.

Furthermore, the fact that it may be in a company's interest to monitor the treatment of foreign workers does not mean that the company has some sort of legal or moral obligation to look after them.

The fact that China (and other 3rd world countries) are not free complicates matters. There might be a moral issue in helping to prop up rights violating states by taking your manufacturing business there---it may not be in your long term interest to do so. However, I do not think it is a clear-cut matter of refusing to do business with China either. They have a mixture of freedom and compulsion in their system (just like us), and it is not a simple matter to determine whether your business with them is helping prop up the good or the bad aspects of their system.

However, I do think that you can say that if a company knows or should know that a supplier is using slave labor (i.e., the workers are forced to work there), it is immoral for them to use that supplier. It cannot be in one's long term rational interest to prop up slavery, even if it is occurring on the other side of the world from where you live. But be careful not to fall into the trap set by those on the left of claiming that paying low wages or asking for long hours or the like is the same as slavery---it is not.

answered Jan 26 '12 at 12:30

ericmaughan43's gravatar image

ericmaughan43 ♦

edited Jan 26 '12 at 12:34

Thanks. Very clear.

(Jan 26 '12 at 12:33) Danneskjold_repo Danneskjold_repo's gravatar image

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Asked: Jan 26 '12 at 09:24

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Last updated: Jan 26 '12 at 18:07