Human Rights in Business Ethics: Labor, Globalization

Introduction: Human Rights and the Business Environment

Human rights are an integral element within the business environment. Globalization has created a far more interconnected society that requires a common set of standards among businesses. These minimum standards first serve to level the playing field for businesses to operate on equal footing. More importantly, they help lift the overall prosperity of those in the labor class. The benefits of shared prosperity then ripple throughout society, improving the lives of all involved.

Without human rights protections, however, it is easy for businesses to exploit inefficiencies in the market. We have seen this with various international organizations where profitability pressures have caused them to exploit the prevailing market conditions within a given jurisdiction. Through efforts to improve profitability and shareholder returns, these companies have essentially disregarded their domestic human rights principles in favor of lower standards in foreign countries. To be fair, many of these instances are not illegal — companies were often legally exploiting the laws and regulations within a developing economy.

The most notorious example occurred with Nike and its exploitation of Asian women and children in its sweatshops. Workers — many of them women and children — labored for nearly sixteen hours a day at very low pay in deplorable conditions. These sweatshops offered little to no rest breaks, employee insurance, healthcare, or other benefits that workers in developed nations routinely expect. Even worse, the workers were subject to the supervision of male leaders who tended to exploit their dominance by physically and mentally abusing their subordinates during those long hours. Nike permitted these conditions as it leveraged cheap labor to increase profitability and profit margins. Many regarded this as a violation of basic human rights, even though the operations were completely legal in the countries where they occurred.

Having a globally standardized approach to human rights ultimately allows working conditions for poor families to improve while also helping to level the overall economic playing field on which international businesses operate. Through improvements in labor practices, all stakeholders — including governments, individuals, and businesses — can benefit (Alston, 2014).

The Role of Labor in Societal Prosperity

Labor is a critical element within the global environment and the basic building block of societal prosperity. Labor allows individuals to exchange their time and skills for money, which can then be used to purchase goods and services that improve their quality of life. The benefit of this system is that consumers can choose the goods and services they wish to consume. Some will take their earnings and save them for a future period; others will invest those sums and accept risk in hopes of consuming more later; still others will purchase cars, homes, and other comforts of life.

The ability to consume, however, is generally predicated on labor. Through the exchange of time for money, societies as a whole become more productive — their labor forces can produce more goods and services, which can in turn be consumed. This system benefits society through new products, benefits individuals through wages, and benefits governments through an expanded tax base that funds services such as infrastructure and education. Due to its foundational importance, labor is therefore a critical element within the human rights equation.

Historical Context: Labor Rights and the Industrial Revolution

Historically, human rights laws against the exploitation of labor were scarce. During the industrial revolution in the United States, for example, children as young as ten would work in coal plants, power plants, and on assembly lines. The typical work week varied widely, with many men working upwards of fifty to sixty hours; failure to comply could result in termination. Benefits such as health insurance were only just beginning to appear in employer packages, and concepts such as 401(k) retirement plans, paternity leave, or sabbaticals were nonexistent. Labor unions similarly lacked much power to negotiate wages and benefits on behalf of workers.

It was not until the reforms associated with the New Deal era — following the Great Depression — that labor unions, negotiated contracts, insurance coverage, shorter work weeks, and paid vacations became standard features of employment. These changes did not happen organically; they required an external political catalyst to force the reorientation of the relationship between employers and workers.

Conclusion

Paying a livable wage, providing health insurance, and helping employees live a better life are basic human rights. Through meaningful advances in the rights discussed above, organizations can set a standard that serves as a global model for companies operating overseas. When businesses, governments, and individuals commit to a shared framework of human rights — one that encompasses labor protections, environmental sustainability, and the dignity of all workers — the resulting prosperity benefits every stakeholder involved.

References

Alston, Philip, and Frederic Megret, eds. The United Nations and Human Rights: A Critical Appraisal. Second Edition. Oxford University Press, 2014.