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Breaking a Sweatshop
Philip M. Berkowitz
05/03/2004
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Not long ago, Nike and its much admired sportswear products were described in
the New York Times as being “synonymous with slave wages, forced overtime and
arbitrary abuse.” The speaker was not a labor activist or a politician hoping to
grab headlines. Rather, it was Nike’s own chairman and chief executive, Philip
H. Knight, who was forced to acknowledge that his company’s overseas labor
problems were having a serious negative impact on its stock price and sales.
Promising to end the use of child labor by Nike’s overseas manufacturers, Knight
also said, “I truly believe that the American consumer does not want to buy
products made in abusive conditions.”
Knight was right. In this era of
instant media attention, companies doing business overseas must ensure that
their labor practices—even those of their suppliers and contractors—are simply
above reproach.
There are many sources of legal liability for our overseas
labor practices. Trade agreements such as the North American Free Trade
Agreement (NAFTA) seek to impose minimum international labor standards.
Organized labor and human rights groups have used NAFTA’s labor side-agreement
to target sweatshop conditions, as well as discriminatory employment practices,
allegedly carried out in Mexico. Recently, federal laws against indentured
servitude were invoked in a lawsuit filed against a number of textile companies
for their employment practices in Saipan, a U.S. territory in the Northern
Mariana Islands.
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