Exploitation - in Developing Nations

In Developing Nations

Developing nations (commonly called "third world countries" or "poor countries") are the focus of much debate over the issue of exploitation, particularly in the context of the global economy.

Critics of foreign companies allege, for instance, that firms such as Nike and Gap Inc. resort to child labor and sweatshops in developing nations, paying their workers wages far lower than those that prevail in developed nations (where the products are sold). This, it is argued, is insufficient to allow workers to attain the local subsistence standard of living if working hours common in the first world are observed, so that working hours much longer than in the first world are necessary. It is also argued that work conditions in these developing-world factories are more unsafe and much more unhealthy than in the first world. For example, observers point to cases where employees were unable to escape factories burning down—and thus dying—because of locked doors, a common signal that sweatshop conditions exist. The Triangle Shirtwaist Factory fire of 1911 was another example, but it occurred in the US, so the first world of then is the equivalent of the third world of today.

Others argue that, in the absence of compulsion, the only way that corporations are able to secure adequate supplies of labor is to offer wages and benefits superior to preexisting options, and that the presence of workers in corporate factories indicates that the factories present options which are seen as better—by the workers themselves—than the other options available to them (see principle of revealed preference).

A common response is that this is disingenuous, as the companies are in fact exploiting people by the terms of unequal human standards (applying lower standards to their third world workers than to their first world ones). Furthermore, the argument goes, if people choose to work for low wages and in unsafe conditions because it is their only alternative to starvation or scavenging from garbage dumps (the "preexisting options"), this cannot be seen as any kind of "free choice" on their part. It also argued that if a company intends to sell its products in the first world, it should pay its workers by first world standards.

Following such a view, some in the United States propose that the U.S. government should mandate that businesses in foreign countries adhere to the same labor, environmental, health, and safety standards as the U.S. before they are allowed to trade with businesses in the U.S. (this has been advocated by Howard Dean, for example). They believe that such standards would improve the quality of life in less developed nations.

According to others, however, this would harm the economies of less developed nations by discouraging the U.S. from investing in them. Milton Friedman was an economist who thought that such a policy would have that effect. According to this argument, the result of ending perceived 'exploitation' would therefore be the corporation pulling back to its developed nation, leaving their former workers out of a job.

Groups who see themselves as fighting against global exploitation also point to secondary effects such as the dumping of government-subsidized corn on developing world markets which forces subsistence farmers off of their lands, sending them into the cities or across borders in order to survive. More generally, some sort of international regulation of transnational corporations is called for, such as the enforcement of the International Labour Organization's labor standards.

The Fair Trade Movement seeks to ensure a more equitable treatment of producers and workers, thus minimizing exploitation of labor forces in developing countries. The exploitation of labor is not limited to the aforementioned large scale corporate outsourcing, but it can also be found within the inherent structure of local markets in developing countries like Kenya.