Thousands starve, or turn to begging, crime, and thievery.
It is still only a few short days after Crothorp Incorporated announced its decision to reform its Southeast Asian operations, and already countless politicians, academics, and celebrities have hailed the action as one of the most selfless and humanitarian things that Crothorp has ever done.
The praise and celebration are the result of Sunday's announcement that Crothorp would be instituting major reforms in all of its Southeast Asian facilities. Crothorp, which is a world leader in the manufacture of toys, clothes, and especially common bathroom products such as deodorant and razors, has been heavily criticized in the past for its "exploitive" hiring practices and allegedly harsh treatment of workers.
"We were expecting to have more impact on the government than on the company itself".
The criticisms came to a head late last year, when several human-rights groups filed suit against Crothorp in several different courts, alleging violations of numerous human-rights and labor rights laws in several countries. "Crothorp's labor practices fly in the face of all that we know to be decent" said a representative of the plaintiffs.
Since then, Crothorp has been under heavy pressure from both international courts and public opinion. Boycotts have even been organized, which made effective use of mass communication, although they did not significantly impact Crothorp's sales.
Despite this public opinion fiasco, most observers were shocked when Crothorp announced that it was voluntarily changing its hiring and employment practices. "We wanted to have an impact, but we never expected them to do this," said Charles Bonnet, an organizer of protests against the company, "We were expecting to have more impact on the government than on the company itself".
The reforms instituted by the company included, among other things, the release of all child laborers, a drastic overhaul in working conditions, and a self-imposed "minimum wage", below which the company refuses to hire any worker.
The moves elicited nearly universal praise from political leaders and celebrities. Several European heads of state lauded Crothorp for providing an example to the world business community, and the White House issued a statement saying that Crothorp "is a shining example of the way compassion can exist in the business world". A litany of Hollywood celebrities signed a statement praising Crothorp's wisdom.
Not everyone in the world was so positive, however. While Crothorp has received much high-profile support and has seen a softening in public opinion, a sizeable minority is still dissatisfied. Many are accusing Crothorp of trying to deflect criticisms by making superficial changes that "do not change the underlying structure of oppression". Many still call for governmental and legal action against the corporate giant, and some even believe that Crothorp's moves will actually perpetuate injustice by "legitimizing" an exploitative social structure in the eyes of the world.
"We were going to build a series of schools, to train future managers and workers," said a company representative, "along with whole towns and new factories. We are no longer bringing in enough profits, however, to feasibly accomplish this".
More importantly, at least for Crothorp's Southeast Asian workers, are the many repercussions in the Company itself. The new arrangements have severely cut into profits, and the new rules to which Crothorp subjects itself have resulted in severe cutbacks in employment. "We refuse to hire labor at ‘oppressive' wage rates" said a company representative. "Unfortunately, this means that we can't hire nearly as many workers as before".
The firing of all child laborers, including adolescents, has left many families with a gap in income which they are hard-pressed to make up. Although the quality and safety of working conditions has improved greatly, the immense costs involved in improving them has forced Crothorp to release thousands of workers. "The facilities are some of the finest in the world," one company official noted, even pointing out that all workers were given their own bathrooms, in order to combat disease. "Of course," he added, "we found that most of our workers just use the same old bathrooms anyway, out of habit and convenience." In fact, there are currently more bathrooms than workers, since the costs associated with their construction necessitated the firing of many of the workers for whom they were built.
Crothorp's new higher wages and "Fair Promotion Policy" ensure that workers are paid well and promoted often, but it seems that there are all too few laborers to receive these benefits.
In addition, the extra costs associated with Crothorp products have caused sales to plummet, reducing company profits and driving consumers to competitors. Crothorp may be forced to release more laborers to meet the new situation.
Plans to expand Crothorp operations in Southeast Asia have also been halted. "We were going to build a series of schools, to train future managers and workers," said a company representative, "along with whole towns and new factories. We are no longer bringing in enough profits, however, to feasibly accomplish this."
The news that the new schools and factories would not be built has hit residents of the affected areas hard. "We were counting on sending our son to one of the schools to become a manager in one of the new factories, once we worked up enough money to pay for the costs" said one mother. "Now there will be no school, no new factory, and it wouldn't matter if there were because all the men in the family lost their jobs, so we couldn't pay the costs anyway."
Crothorp has wholeheartedly abandoned its "sweatshop" system and instituted major labor reforms, but despite these changes, poverty and crime have inexplicably gotten worse. "This just shows how timely these reforms were" said one human-rights activist. "If they hadn't happened, things might be even worse. Nonetheless, Crothorp's reforms were clearly insufficient. We must use effective governmental action to counter this intolerable situation. We clearly cannot rely on private initiative to solve these problems."
"Clearly, these workers do not understand what is in their best interests, and it is up to us politicians to lead them in this regard."
Indeed, many Southeast Asian governments have used the spike in poverty and crime to argue for government-led reforms, and some have even called for the nationalization of Crothorp's factories.
On the ground, things do look pretty awful. Prostitution, in all of its disturbing varieties, has become commonplace, and former employees are stealing just to avoid starvation. Gangs have begun cropping up, and police are having a hard time dealing with the lawbreakers.
Many of the Southeast Asian workers are thoroughly upset over the situation, and demand to have their jobs back, even at the same wages. Political and labor leaders, however, caution against such an approach. "I know they claim to be starving and miserable, but that is no excuse for deserting the workers' cause," said one politician. "Clearly, these workers do not understand what is in their best interests, and it is up to us politicians to lead them in this regard. We- I mean, uh, they- must not return to work at wages lower than those in place now."
"Harrigan stressed the need to couple good intentions with good economics."
With all the praise that has been heaped upon Crothorp, it is perhaps strange to note that at least one of Crothorp's officers is critical of the reforms. John Harrigan, Crothorp's vice president in charge of foreign development, has openly stated that Crothorp should undo the reforms immediately. Harrigan, who once served as head of an agency promoting "entrepreneurial charity and business-based solutions for the Third World", has said that the reforms were destructive and inhumane, causing poverty and moral degradation. "There is no excuse for creating this kind of mess," said Harrigan, "Not even good intentions can justify this." Harrigan stressed the need to couple good intentions with good economics.