GETTING TOUGH ON SWEATSHOPS
Out of sight, out of mind? Not in the clothing industry. Once, Americans had little idea where imported shirts, shoes, and dresses came from. But better communication means that garment shops in Indonesia or Honduras are now on the other side of the TV screen rather than the other side of the world. Companies such as Nike are under attack for tolerating deplorable working conditions and low wages in their own overseas factories and those of their suppliers.
Let's get one thing straight: These corporations are not oppressing the workers of developing countries by hiring them. The success of Taiwan and Korea has shown that exporting to global markets is a smart strategy for economic development. Moreover, the production techniques and organizational knowledge brought by foreign investment can have a positive spillover effect for the rest of the economy.
But global companies can no longer afford to close their eyes to the conditions in the factories where their products--and profits--are made. As the recent uproar against Kathie Lee Gifford reveals, American consumers can sometimes react strongly against products perceived as made by "sweatshop labor."
Corporations that depend on suppliers in developing countries should follow such pioneers as Levi Strauss and Gap. These companies have learned from experience to monitor the labor practices of their subcontractors, with an eye to preventing the worst abuses. Operating in poor countries that need investment and jobs, global companies have enormous leverage to push for improved working conditions and wages. Such pressure has its limits, since competition in the global apparel industry is fierce, and clothing prices have been declining for years. But it's the right--and profitable--thing to do.