Making Globalization Work for All
Richard M. Locke, PhD '89, Alvin J. Siteman Professor of Entrepreneurship and Political Science; Hannah Jones, Vice President, Corporate Responsibility; Nike ; Scott Nova, Executive Director, Workers Rights Consortium
Description: These speakers share a bleak perspective: A decade's-worth of high-profile efforts to change sweatshop conditions in overseas apparel factories hasn't worked. Hannah Jones describes Nike's dismay following in-depth research at its overseas facilities, where the corporation had attempted to implement codes of conduct and compliance monitoring. The corporation made "some stark realizations," acknowledging such systemic issues as excessive overtime, unpaid wages, worker harassment and denial of workers' rights to associate freely. Real remediation of the problem, says Jones, must deal with root causes. "There's no point in Nike having 96 monitors on a factory floor day in and day out monitoring overtime, if overtime is being caused way up the supply chain." So Nike is scrutinizing its own behavior as a buyer. We must "incentivize suppliers to become part of business decision-making," she says, and convince them that creating efficiencies in a volatile market doesn't mean "squeezing labor costs" but "squeezing time to market." The worker "is central to that," and better-trained factory managers may be key.
Scott Nova agrees that major U.S. garment retailers must take corporate responsibility to heart. The pressure on foreign suppliers hasn't succeeded, he says, because "factory managers conclude correctly that if the brands were truly serious about improved working conditions, they would pay enough to make it possible for those conditions to be achieved." Instead, factories compete to pick up cheap contracts, pressure their workers to toil for pennies, and use "fakery and deception when customers send auditors to inspect labor conditions." But there is good news, he says: "The economics of apparel production are such that the problem could be fixed." Since labor costs are a minute percentage of the retail price of apparel, a tiny increase in the cost of a product passed along to a consumer could enable "brands to pay factories to reflect the true costs of compliance living wages for workers."
Host(s): Sloan School of Management, MIT Sloan School of Management
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