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The fruit of knowledge: Apple’s sweatshop problem

Recent calls to boycott Apple due to poor working conditions at its Chinese supplier, Foxconn, are simply business as usual. Nike has faced sweatshop accusations for decades; Disney and Mattel were added to this unenviable list last year. If a company is manufacturing overseas, it appears that taking advantage of poor labor conditions is more the norm than the exception.

A common defense is that the company “unknowingly” sourced from a supplier with illegitimate business practices. Today’s lengthy global supply chains, with tier upon tier of suppliers, can make visibility throughout the network difficult, and it is often likely that a company has never interacted with its second- or third-tier suppliers. But for Apple, this excuse seems considerably less valid. Shouldn’t a company of its size and sophistication be held accountable for what happens in its supply network?

Calls for a boycott are admirable. Consumers can easily punish Apple with their pocketbooks. However, we are ultimately the force that drove Apple to search worldwide for the lowest labor cost available. Our insatiable appetite for the cheapest electronics and clothing is impossible to curb. If iPads stopped flying off the shelves at Apple stores, change would be mandated. Realistically, we will be more likely to see a resurgence in dialup Internet first. Our consumer culture is not developed to restrain itself.

As our global marketplace continues to expand, the onus is on the business community to police itself. The last several years have shown us the effect that lax ethical standards have in the financial sector. We are facing another ethical crossroads in business: How can we continue to make a profit while protecting and developing our vulnerable labor pools? Economists show that difficult working conditions, such as those found throughout Asia, often precede or accompany increases in wages and quality of life. Our presence in these countries is likely not detrimental to their development. However, there is a fine line between making a positive and negative impact in these developing countries. Turning a blind eye to what is happening in the supply chain makes this line impossible to see.

Recently, Apple released a list of all firms within its worldwide supply chain, finding that an overwhelming 62 percent did not comply with Apple’s maximum 60-hour workweek policy. Before we can ask the question of how many other companies are willing to release such a list, we must ask how many can even create such a list. Whether through government mandate or company policy, the first step a firm must take to prevent “unknowingly” exploiting poor labor conditions is to develop full visibility of its supply network—understanding exactly what is being sacrificed to make a profit.

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