Microsoft and Sweat Shops

[NigelW]

I for one am sick of all this Microsoft bashing. Bill Gates is not the anti-christ. Clever - definitely, opportunistic - certainly, ruthless - without a doubt, lucky - well you make your own to a large degree

BUT in various measures you need to be all those things to be a successful businessperson. Business is about making money. It is not necessary that one party always win and the other always lose, rather it's about perceptions of value.

And don't kid yourself, if Oracle or Sun or any of the other major IT players thought they could stick it to Microsoft they would and do. Also, don't forget that microsoft provides thousands of jobs and has made thousands of millionaires, both within and outside the company...

so give them a break. At least they're not polluting the environment to any major degree...

ps. take my diatribe seriously at your own peril, I certainly don't.

 

[Mr. Fabulous]

In regards to Nigel's post about Microsoft. I recently read a book in which there was a story about a famous General in China whom, after defeating his enemies and becoming the leader of China, executed his top three advisors. Why? Because he saw them as the only remaining threats to his leadership. Cunning? Sure. Ruthless? No question. Smart? Absolutely.
What Bill Gates has done in the past and continues to do, is protect his business and the interests within that business. You don't get to where he is by being the nice guy. He's an excellent businessman who has achieved great things for himself. That doesn't mean that all of the things he has done to get where he is are great, and I certainly am opposed also to some of the things he does, but that is the way business is done sometimes.
When you are in a position like Bill Gates is in, there are many, many people that would love to take (and some of them have, will and continue to attempt) that business away from you. In a situation like that, you either lie down and give up or you fight back. Actually, why allow yourself to be put into a position where you are susceptible to attack if you have the ability to knock down your competitors when they are still small?
Just as an aside, this has nothing to do with the topic, but let me ask those of you who curse Billy boy under your breath, who wears shoes by made by Nike? Or clothes made by the Gap? Or purchases toys for their children made by Disney?
By purchasing goods made by these companies, you are supporting sweatshop labour (I do too, I admit it, it's impossible to purchase everyday goods these days without doing it). Someone gets paid as little as 25c an hour so you can buy these things. How does this tie in with the topic? Companies use this labour to fatten their bottom line. It's despicable, disgusting and immoral, but it's in the companies' interests to use this labour. It's all about business. So just think about that next time you preach some crap about Bill Gates as the bad guy and Microsoft's dodgy products.

Mark
'no hat, some cattle'

 

[paulzag]

Originally posted by Mark Laszczuk
Just as an aside, this has nothing to do with the topic, but let me ask those of you who curse Billy boy under your breath, who wears shoes by made by Nike? Or clothes made by the Gap? Or purchases toys for their children made by Disney?
By purchasing goods made by these companies, you are supporting sweatshop labour (I do too, I admit it, it's impossible to purchase everyday goods these days without doing it). Someone gets paid as little as 25c an hour so you can buy these things. How does this tie in with the topic? Companies use this labour to fatten their bottom line. It's despicable, disgusting and immoral, but it's in the companies' interests to use this labour. It's all about business. So just think about that next time you preach some crap about Bill Gates as the bad guy and Microsoft's dodgy products.

Actually sweatshop labour is a western concept. 25c per hour is top of the market in most of those economies. And there is never a shortage of labour willing to trade up from making no-name sandles to working in Nike suppliers.

I would guess most Disney licensed product is made in China. The economies of scale combined with affordable (cheap) labour mean local manufacture is not competitive.

Hardly immoral. It's like complaining that landlords who rent to the poor are immoral and profiting from the sweat of battlers.

Originally posted by brains
Paul, sounds interesting. What do you do exactly?

We sell books, toys and gifts by leaving samples at workplaces throughout Australia and New Zealand.

Regards

Paul Zag
Dreamspinner

 

[Mr. Fabulous]

Paul,
I read an excellent article about sweatshop labour in Honduras (where Disney's factories are and where I got the 25c an hour deal from) in New International three years ago One guy who worked in the factories was making just enough to rent a corrugated iron shack, complete with dirt floor and one room for his family and put a little food in their stomachs.
People, especially women who work in the factories that make Nike and Gap and most big name labels work 14 hours a day, 7 days a week and most of them don't even get a lunch break or are even allowed to go to the toilet.
In a documentary that I saw on SBS a few years ago, they showed some women (with hidden cameras, of course) who actually sleep right next to where they work, because they are not able to afford the little bit of time to go home to their families, because they need that time to earn money.
Did I mention that rapes and beatings are also a common occurence? How about the women that were murdered in a Vietnamese sweatshop hellhole for daring to speak up? But hey, they're all jumping at the chance to go work for these guys, aren't they Paul. Is it because of the great working conditions? Hey, maybe they might even get promoted to V.C. of the company if they work hard enough. I mean, where does this 'willing to trade up' nonsense come from? You reckon people actually want to go work there? The conditions of the factories are despicable no matter where you go. It's got nothing to do with who owns the company.
And if people are making the equivalent of the living wage in these countries, why are they all suffering so much, with barely enough food to eat, let alone clothing and shelter?
To compare sweatshop labour to renting out houses to the working classes of Australia is one of the most disgusting things I have ever come across in this forum Paul. In Australia, most people make enough money to put food in their stomachs, clothes on their backs and a roof over their heads, and they don't have to work 14 hours a day 7 days a week 52 weeks a year to do it either.
Take a look at http://www.sweatshopwatch.org and tell me that what is going on is not immoral. And to think you're one of the ones that bags Bill Gates.

Mark
'no sweatshops, some rights for labourers'

 

[Mr. Fabulous]

Continuing on, here is some stuff I found at sweatshopwatch.org:

Fundacion Nacional para el Desarrollo, or the National Foundation for Development, an NGO research organization in El Salvador, establishes the basic basket of necessities for the average sized Salvadoran family (4.3 people) to survive in "relative poverty" as $287.21 per month. In El Salvador, workers at Doall Enterprises make $0.60/hour. This meets only 51% of a basic basket of goods necessary to survive in relative poverty.
SOURCE: "Liz Claiborne/Sweatshop Production in El Salvador," September 17, 1998, National Labor Committee

According to a U.S. Commerce Department report (February 17, 1998), "The minimum wage [in Honduras] is considered insufficient to provide for a decent standard of living for a worker and family." $0.43 per hour, or $3.47 per day, is the base wage for garment workers in the Evergreen factory in Honduras, meeting only 54% of the cost of survival, meanwhile inflation is expected to reach 13.7% next year, eating away the purchasing power of workers' wages. When transportation to and from work, breakfast and lunch costs $2.59, that leaves only $0.80 a day for families' other basic needs.
SOURCE: "Wal-Mart Sweatshops in Honduras," November 17, 1998, National Labor Committee

According to independent labor rights organizations in Hong Kong, a living wage in China would be about $0.87/hour. Minimum wage rates vary as they are set by each provincial government, however, they do not meet this living wage. Shanghai's minimum is $0.21/hour, and Guangzhou's $0.26/hour.
SOURCE: "Behind the Label: Made in China," March 1998, Charles Kernaghan/National Labor Committee

So what are you saying Paul, that people making only 50% of the basic living wage is not immoral? Just because paying people 25c an hour is the going rate, does not make it right. Workers the world over have the right to earn at least the minimum amount they require to live. Do you think that people cannot even get enough to properly feed, house and clothe their families is not immoral? Maybe you should go work there, then we'll see how immoral you don't think it is.
When you see these facts presented, seems to me that it is rather pathetic to compare Australian wages to the wages that people in sweatshops get.

Mark
'no oppresive work practices, some rights for workers'

 

[Patosan]

This tread is to blame for many of my cups of coffee going cold, GREAT !!

Not currently living in Oz I hadn't heard about this Jenman character till recently via this forum, so I think I'll have to do some searching. He does indeed seem to be doing something different, has got people strongly divided and me intrigued.

Certainly there's been little raised about poor old Andrea Sutton in this, her named topic though, so I'll await new info coming to this forum in the future.

Then somehow we drifted in Bill Gates and sweatshop debates.
Perhaps like most people like I can appreciate both views on the two highly contrversial issues. Billy is a great man though monopolies are not good for society, there are laws to protect against these which at times need fine tuning. I don't think anyone would applaud Nike etc for simply matching local standards of pay in such circumstances. Surely such multinational companies can pay well above local rates while still keeping their bottiom line ridiculously low. Of course we shouldn't blame the companies themselves .... after all who owns them --- shareholders. Yes super funds, mums and dads, you and me, it is this group which should stand up and voice their concern at general meetings about these conditions.

Shouldn't we all look at our own responsibility in these issues ?

 

[Macca]

a couple of comments if I may.

I believe it is part of the aussie psyche, a hangover from the convict days to knock the boss. It is now called the tall poppy syndrome, we have all heard of that.

Bill Gates got there on his own ability, he now has more money than he knows what to do with. His solution has been to create a trust to give money away. He has and is giving away Billions of dollars to causes he believes in.

Sweat shops?
the alternative is usually starvation. If you look at recent history not so long ago the sweat shop countries were Japan, Korea, Malaysia, China. By multinationals setting up in those countries it creates infrastructure which eventually assists the country to become economically viable. I agree it is hard on the present generation, but in the long term the country really does benefit.

Macca

 

[Aceyducey]

I'm with Mark - let's get all western companies out of third world countries and stop importing all products made in sweatshops (by name brands or otherwise)!

Call in all the debts that fat-cat rich people in those countries have taken with western banks as well!

This should leave everyone in the 3rd world on the same footing - starving, unemployed and desperate.

Then those that haven't died from the lack of medical supplies (from western countries) or in riots will starve to death - voila! Lots of vacant real estate for the western powers to move surplus population into.

I figure that it should take no more than 3 years for the 3rd world to collapse once we destroy their economies.

Oh, and it should cause inflation to rise to no more than a spiralling 20% per annum in western countries....after all, we can replace those sweatshops with well-paid middle-class westerners who are happy to work for not less than $15 pr hour (AU). Think of the new cost of your no-name clothes, let alone the branded versions.


Mark,

25c may be nothing to you, but to someone in the 3rd world who's other option is to work for the no-name brand at 20c it's a substantial lifestyle improvement. You talk about bad conditions - your ideas would make them worse.

Tell me - how much of your clothes & food is produced in 3rd world countries? How much is produced by workers paid 25c and how much by those paid less? I bet you like to buy the bargain no-brand chinese made clothes as much as the rest of us.

It seems to me rather hypocritical to boycott the western companies who are the only ones actually putting money back into the economies of 3rd world countries, building the infrastructure, educating the workers and giving them a bigger dream.

BTW: I admire Bill Gates as well....he has achieved amazing things & changed the shape of the world. Mark, did you know that he does a lot of the packaging of his products very cheaply in 3rd world countries?

Cheers,

Aceyducey

 

[brains]

Acey,

Are your political /economic beleifs to the right of Genghis Kahn?

You might be missing the point that its not that things are done in third world countries, its HOW they are done and the same applies for Gates, and the same applies for everything in life.



"I bet you like to buy the bargain no-brand chinese made clothes as much as the rest of us."


**And i dont like to buy (or wear) no name chinese brands.**

 

[Sim]

Originally posted by Aceyducey
BTW: I admire Bill Gates as well....he has achieved amazing things & changed the shape of the world.

Genghis Kahn, Attilla the Hun, Adolf Hitler and many others all achieved amazing things and changed the shape of the world. I'm sure there is little doubt that the way they achieved their success was not acceptable.

My point is not to make a literal comparison between these people and Bill Gates - and hence call Bill evil.

My point is to show that there are people who were considered great in that their achievements were astonishing and they really did change the shape of the world - but those achievements came at a price, one which we widely regard as unacceptable.

Bill is not a millitant megalomaniac - he is not interested in achieving world domination by means of causing physical harm to people, therefore it is not fair to make a direct correlation between his actions and those of the other people I mentioned.

However, he is interested in achieving effective domination in the business world, which in itself is not totally an evil goal. There are many factors which must be weighed when considering how far is too far. Not in what he wants to achieve, but in what he is prepared to do in order to achieve it.

Now this whole subject is a difficult one, as the concepts are not terribly well defined - should there be rules in business ? Should there be boundaries within which business should operate ? Or should it be purely a survival of the fittest and do what ever it takes so long as you are not physically hurting anyone ?

The biggest issue that Microsoft has been playing with is competition. We live in a society which demands choice. The ability to choose your own destiny is probably one of the most fundamental ideals in our concept of a "free" society.

Monopolies remove choice. Monopolies work hard to suppress new choices becoming available. Monopolies use their market dominance to destroy the attempts of competition to offer an alternative. Monopolies are also able to exert influence on society by arbitrarily adjusting their products and prices to achieve their own goals.

Is this fair ? Is this what a free society wants ? Does there need to be a line drawn in the sand saying where "too far" is ?

This is kind of the whole point of the exercise that the US DoJ went through with Microsoft recently. The abusive business practices which Microsoft were undertaking to further their market dominance by subduing choice. Interestingly IBM were found guilty of many of the same practices during the 70s and 80s, as was AT&T.

The issue of business ethics and what is acceptable in the war that is business is a rather evocative one, and it certainly can be difficult to produce an effective argument against certain activities when the lines are never clearly drawn.

My biggest concern is the common practice of attempting to divorce the impact of business activities from the impact on human lives. Ruthless business practices impact on humans.

For example, destroying the competition in a marketplace will lead to job losses which will never be countered by growth in the monopoly - due to the concept of economies of scale. The argument that all business is good because it provides jobs is only valid in my mind for as long as the business practices do not cause greater harm elsewhere.

An "altruistic monopoly", or "benevolent dictator" is all well and good. But when one is driven to maximise profits for the owners of the company, there is a conflict due to a constant pressure to screw as much from your customers as you possibly can. And when you have successfully destroyed all choice they have, then you can begin to truely milk them dry.

So is Bill Gates evil ? No, my definition of evil is not quite that broad.

Does he cross the line as to what is acceptable ? In my mind, yes.
Where is that line ? That is the problem - it is very difficult to accurately define where the line is and hence I have no definitive way of proving my argument that he has crossed it.

Is Bill Gates to be admired ? Yes, he has successfully built a large and quite effective organisation and that is certainly to be admired - and at the same time, I say no ! I strongly believe in competition based on merit alone - and the practice of actively working to destroy the competition because wining by merit is too costly, is to me quite unacceptable.

Am I naive and idealistic when it comes to business ? Maybe, but I set my own moral compass, and I do strongly believe that the ends do not always justify the means. We must always be concious of who it is our actions make us become.

At the end of the day, it does not matter how much wealth you have and what kinds of altruistic things you pretend to do with it, when you have already metaphorically sold your soul in order to achieve it.

 

[Sim]

Originally posted by Mark Laszczuk
... but that is the way business is done sometimes
... why allow yourself to be put into a position where you are susceptible to attack if you have the ability to knock down your competitors when they are still small?

It kind of depends on how you "knock down" your competitors ! If you simply out-smart them, out-innovate them, out-perform them, then great. But if you use your position of influence to restrict fair competition, then how can this be a good thing ?

 

[raoul]

Aceyducey

BTW: I admire Bill Gates as well....he has achieved amazing things & changed the shape of the world. Mark, did you know that he does a lot of the packaging of his products very cheaply in 3rd world countries?

I would like to set the record straight, there AceyDucey. Bill Gates does not package his own products - he licences the right (for a hefty annual fee!) to 3rd party companies who manufacture the products for Microsoft. I know - I work for one of these companies. It is a highly competitive cut-throat industry with paper thin margins and punitive fines for screwing up.

Yes, microsoft products are manufactured in 3rd world countries. But that is not because of some altruistic edict from his highness. Companies like the one I work for have plants all around the world, but have been moving production from countries like Australia, America, etc to so-called 3rd world countries like China in order to remain competitive and still have a hope of making a profit.

Please take this in the spirit I've posted in - a simple factual correction - it is not an attack. You are quite welcome to respect Bill Gates. However, in my case, I choose to differ, but that's another long and rambling post in itself.

cheers

raoul

 

[Mr. Fabulous]

Sim,
I didn't say that what Microsoft does is a good thing, rather that that is the way you keep your strength in business. In a lot of ways, I also disagree with the way that Microsoft does business, my point was that if you want to stay at the top, you need to take out your competitors, cause given half a chance, they will knock you down.
I also encourage competition, it keeps prices down and gives us a choice as to what we will use, buy, whatever. However, sometimes in business, the roses don't smell that nice, and you gotta be ruthless in order to stay at the top. Note: I am not condoning Microsoft's business practices, just merely pointing out their perspective.

Aceyducey, a reply to your arrogant, insulting post is coming.

Mark
'no hat, some cattle'

 

[Mr. Fabulous]

Aceydeucy,
In the words of Samuel Jackson in Pulp Fiction: Oh, you were finished? Well allow me to retort.

Where did I say that western companies should get out of third world countries?

Second, the large majority of people in those countries already are desperate, that's why they work in the sweatshops.

Third, in relation to your destroying their economies statement... their economies are already up the duff. Ever heard of a couple of tiny organisations called the World Bank and the IMF? Run by first world governments, these two organisations have already destroyed the economies of third world countries. How do you think first world governments keep control of the third world? By giving them no option other than to fall even further into spiralling amounts of debt, then forcing their people into sweatshop labour in a pathetic attempt to pay some of the debt. Of course, anyone with even a small understanding of world affairs knows the situation is hopeless.

Spiralling inflation? Let's look at inflation. In an article I found at a sweatshop site, they mentioned that Honduras' inflation was tipped to rise 14% in the next year, how do you reckon that's going to fare for the sweatshop labourers there?

And where does the working for Nike will get you 25c instead of 20c deal come from? Where's the evidence? In actual fact, Nike workers are often the lowest paid workers of any of the big name companies. A few years back, they moved from a factory in South Korea where the workers were paid $2.37 an hour to a factory in China where they receive 25 - 40c an hour. The only difference between the clothes that you refer to so eloquently as 'bargain no-brand Chinese made clothes' and Nike is the logo on the shirt/shorts/shoes (and the massive price difference you paid for them).
The reality is that it is the companies like Nike and the Gap that drive the wages DOWN, not up (not even by 5c). To be successful in getting their business in the first place, the owners of the factories push production costs down (including wages) to get the companies' contracts. Nike and The Gap (and others) use this to their advantage and hold the factory owners to ransom by threatening to move elsewhere if they don't get what they want. So much for workers in Nike factories getting paid more.
I read a report not long ago that for Nike to make a pair of shoes from the purchase of raw materials to getting them on the shelf where you pay $200 for them is $5. Yep, five dollars. Most of the profits they make go into their marketing campaigns.

How is making an extra five cents a hour (so you claim) a 'substantial lifestyle improvement'? I mean, you don't really believe that, do you? Surely you aren't that naive? In one of my earlier posts, I gave examples of how the pitiful wages people are making are at best 50% of what they need to have even the most basic living standards. And that is poverty line stuff.

How are they building infrastructure? Educating the workers? Giving them a bigger dream (I have to admit, that one really made me laugh, I've haven't read something that funny in ages)? These people live in slums, with no running water, raw sewerage and all of the other wonderful things that come with living in extreme poverty. And where are they being educated? When are they being educated? It's a bit hard to get an education when you work 14 hours a day seven days a week... Now for my favourite one: What dreams are they cultivating? Do you think that these people are working towards something? A better life? They can't even live on the poverty line, their wages are so ridiculously low. Bigger dreams... Mate you gotta be kidding.

Finally, I actually don't enjoy wearing the bargain no-brand Chinese clothes just as much as the rest of you... I do my best to not purchase sweatshop clothing. I stand by my beliefs. Of course, it is not always possible to avoid (try finding a pair of sneakers made by any company that aren't made in a sweatshop). And by the way, my food is grown right here, in Australia. I go to the markets and buy local produce, cause I believe in supporting local farmers.

Are you saying Acey that you disagree with my argument that ALL workers have the basic right to a decent living wage? Are you saying that these people should be happy with what they are getting now? It certainly seems so. It doesn't take much in these countries to have enough to have a basic living wage. A couple of dollars, although still absoltely pathetic would be a major improvement, not the 5c you claim.

Mark
'no hat, some cattle'

Edited to correct mistake: Above I stated that a pair of shoes cost Nike $5. In the report (in the link below) there is a bit that shows that the cost to Nike is actually around the $20 mark. My mistake, and I have no qualms about pointing it out. This report was done in 1995, hance the relatively cheap example of the price of the shoes.
HOWEVER, at the end of this cost analysis is this excerpt. So much for spiralling inflation...

Note that the cost of production labour is only $2.75 or 4 percent of the price paid by the consumer. So wages for production workers could be significantly increased without adding much to the cost of the shoes.

Even if wages were doubled and the extra cost passed straight on to the consumer, it would add no more to the price of the shoes than the cost of a pair of shoelaces. It would add 4 percent, or in Australian terms, A$4 onto the cost of a A$100 pair of shoes. Consumers would hardly notice, but it would make an enormous difference to hundreds of thousands of production workers and their families.

It should be noted that Nike spends nearly twice as much on promotion and advertising as it does on production workers' wages. In March 1995 for example, tennis star Andre Agassi was paid a reputed A$140 million to promote Nike shoes and clothing.

 

[Mr. Fabulous]

For those of you that are interested, here is a link to a report about working conditions for workers in Nike factories in Indonesia. There is also a bit about China there too. The link is: http://www.globalmarch.org/virtuallibrary/oxfam/nike/sweating.html

Mark
'no hat, some cattle'

 

[Aceyducey]

A bit of a three-prong post here:

Sim,

I agree with your view on Microsoft, Gates has done a fantastic job building a highly successful organisation, but does at times cross the line as to acceptable corporate behaviour.

Personally I have experienced how difficult it is for a company and its executives to maintain acceptable behaviour over time as social mores change & legal interpretations turn legal into illegal and vice-versa regularly.

The framework for appropriate corporate behaviour is not a set thing but a continually evolving melange of social, ethical, human rights, environmental and governmental concerns spiced up by differences in thought across the globe and media distortions.

The most recent example I've seen of this evolving framework, other than the British-American Tobacco appeal win (which I disagree with) is the recent decision against Dow Jones in the Supreme Court on the right to sue publishers for libel in a different jurisdiction to which material is published online (which I have not formed an opinion about yet).

I don't believe that Microsoft necessarily pushes the boundaries more than other companies, or governments for that matter, and I don't feel there is anything wrong with pushing the boundaries - how else can we set them.


Brains:
Genghis Khan was more to the north of me rather than to the left - I can't speak as to his political views, he didn't have the depth of political experience and material to draw on as we do today, nor the cultural background or technological tools to establish a fairer social system.

His system worked, he was tolerant of religious and cultural beliefs and loved his kids - what more can you ask (well maybe for less killing and maiming, but this was not unacceptable political theory at the time).


Mark:
I recognise and accept your points, and personally find sweatshops very distasteful. I have also worked in a sweatshop-like environment here in Australia, a start-up web development company where the staff were paid in food as the company had no money...but of course someone did very well out of it and the workers were never adequately compensated - a long story, not one to be published on a public forum.

Personally I look for what works over time, not what is fair in the short term. Admittedly if you take the longest-term view we're all dead (though that may not hold true for much longer)....however the successes in the ongoing transformation of countries such as South Korea, Japan, Malaysia, China and India, and going further back the sweatshops in Europe and US demonstrate to me that sweatshops may be a necessary step to move countries to affluence.

I don't claim that sweatshops are pleasant or ethical, but have not seen demonstrated a better system for taking a country from poverty, poor infrastructure and high inflation (and 14% isn't what I define as high - try 100s or 1000s of %) to one where a large proportion of the population is affluent in Australian terms (not all - we have not yet achieved that in ANY country and someones I wonder why people forget the sweatshops and homeless here at home).

We can debate about the Nikes of the world - or more relevantly about the governments and companies that are willing to allow their people to work for virtually nothing (in our terms) in sweatshops - Indonesia could always legislate minimum wages. However bear in mind that railing against the western labels does not change these countries or companies' policies, thinking or ethics.

If Nike demanded higher pay for workers this would push up its prices...leaving a niche for a more 'competitive' player to step in. An improvement?

Unfortunately we live in an inperfect world. Fortunately things change constantly.


Cheers,

Aceyducey

 

[Sim]

Originally posted by Aceyducey
I don't believe that Microsoft necessarily pushes the boundaries more than other companies, or governments for that matter, and I don't feel there is anything wrong with pushing the boundaries - how else can we set them.

I am inclined to agree with you actually Aceyducey... at the same time as I criticise Microsoft for stepping quite far over the line (in my opinion) of acceptable corporate behaviour, I do also recognise the necessity for companies at the cutting edge (of whatever !) to push the envelope - even if only in the name of progress.

I still stand by my position that they go too far - but as I said, actually drawing the line on what is too far is never an easy task, and as you quite rightly pointed out, it is indeed a moving target !