Rebel Traders - Stock Market and Economic Analysis

Pictures smuggled out of a Chinese sweatshop producing computer accessories for Microsoft, and other corporations, reveals what the true cost is for growing profits.

I have in the past opined about companies that are using more and more foreign labor to make products sold in the United States. The reason they do this is very simple, the need to keep profits growing. Here is a situation where a human rights organization smuggled out photos and worker conditions at a company that makes computer products, Microsoft being one of those companies that has products manufactured there.

Employed for grueling 15-hour shifts, in appalling conditions and 86f heat, many fall asleep on their stations during their meager ten-minute breaks.

For as little as 34p an hour, the men and women work six or seven days a week, making computer mice and web cams for the American multinational computer company [Microsoft].

This photo and others like it were smuggled out of the KYE Systems factory at Dongguan, China, as part of a three-year investigation by the National Labour Committee, a human rights organisation which campaigns for workers across the globe.

The mostly female workers, aged 18 to 25, work from 7.45am to 10.55pm, sometimes with 1,000 workers crammed into one 105ft by 105ft room.

They are not allowed to talk or listen to music, are forced to eat substandard meals from the factory cafeterias, have no bathroom breaks during their shifts and must clean the toilets as discipline, according to the NLC.

The workers also sleep on site, in factory dormitories, with 14 workers to a room. They must buy their own mattresses and bedding, or else sleep on 28in-wide plywood boards. They ‘shower’ with a sponge and a bucket.

And many of the workers, because they are young women, are regularly sexually harassed, the NLC claimed. […]

[…] Microsoft said it was committed to the ‘fair treatment and safety of workers’. A spokesman added: ‘We are aware of the NLC report and we have commenced an investigation.

‘We take these claims seriously and we will take appropriate remedial measures in regard to any findings of misconduct.’

Full article at the Daily Mail

I have an idea, but Microsoft and their investors won’t like it. How about not using sweatshops in other countries at all. Why not set up some production facilities right here in the United States? Oh, how stupid of me, of course you can’t do that because it would mean that your profit margins would decline because you had to actually pay someone a real wage here in America.

Microsoft says they have commenced an investigation. Come on Microsoft, who are you trying to kid here. You must know what goes on in your contract production facilities, it is just you don’t want anyone to know about it. And when facts leak out you have to take the “we are shocked” attitude.

Want to do something that will shock the world? Announce that you will no longer use any foreign labor and use labor here, in the country that you call your home base. You say you can’t because you would have to pass along the cost increase to the customers, and that customers won’t like it. Easy solution, keep the cost of the products about the same and instead tell your investors that the profit margin will decline so that you can employ American workers instead.

How much profit is enough Microsoft? As a publically traded company I understand the need to keep showing increased profit every year, but at what cost will you be willing to go to keep that profit growing? What will you do if the labor costs in China begin to grow? What third world nation would you then move production to?