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Corporate Slavery: Does It Still Exist?

INTRODUCTION

Most modern day societies view the concept of any form of slavery as reprehensible, yet forms of it continue to exist. Slavery can include any situation in which a person is being exploited in exchange for labor without the ability to leave because of threats, violence, coercion, abuse of power, or deception. Countless organizations and individuals throughout history have lent their voice in opposition to it. For example, on December 10, 1948, the United Nations adopted the Universal Declaration of Human Rights, which affirmed the basic human right to be free from slavery, admonished slave trade around the world, and plainly stated the wrongs of slavery in Article 4, "No one shall be held in slavery or servitude; slavery and the slave trade shall be prohibited in all their forms" (United Nations, 1948). In addition, most of the world's religions include some form of mutual respect in their teachings which would be violated by the use of slave labor. In fact, on September 4, 1993, representatives from many of the world's religions met in Chicago and created a document titled, Declaration Toward a Global Ethic that addressed the general religious consensus on slavery and included the following phrases regarding the rules society should live by when applying their collective teachings: "We must treat others as we wish others to treat us," "No person should ever be considered or treated as a second-class citizen, or be exploited in any way whatsoever," and "We must strive for a just social and economic order, in which everyone has an equal chance to reach full potential as a human being" (Parliament of the World's Religions, 1993, p. 2). From a non-religious perspective, this evaluation can be likened to ethical concepts of universalism and the "Golden Rule." Further, almost every country has laws against slavery, although those laws are inconsistently enforced and it can be difficult to track illegal behavior. In spite of these general perceptions and laws, slavery is still quite common and, while estimates are not exact, figures have shown that up to 46 million individuals are victims of modern slavery each day (Global Slavery Index, 2016). Forced labor and slavery are most prevalent in five sectors of the U.S. economy: prostitution and sex services, domestic service, agriculture, factory work, and restaurant and hotel work (Batstone, 2007). Modern slavery can take several forms, however, the main forms that involve legal businesses and corporations include prison labor, sweatshops and child labor, and forced migrant labor and human trafficking.

FORMS OF CORPORATE SLAVERY

Prison Labor

As many prisons are still public and government-run, it is important to acknowledge that a government is not a corporation, so any forced labor likely couldn't be qualified as corporate slavery. Arguably, however, corporations can draw from that forced labor pool, thus creating an interdependence in which the government is obligated to provide a set amount of "employees" from their prisoners and creates incentives to increase the labor pool through more restrictive sentencing for crimes. As such, the existence of corporate slavery in prisons is controversial. For example, Penn Law School professor, Stephanos Bibas, argued that not sending prisoners to work is harmful to them and to the American people and changing the law to allow prisoners to work without wage law interference would keep them occupied, allow them to learn job skills they could use once released, compensate the justice system and their victims, and foster a sense of discipline (Salam, 2013).

The US currently incarcerates the largest percentage of its population over any other country. In fact, the number of individuals incarcerated in 1980 was just under half a million, which grew to a staggering 2.3 million in 2008, and then dropped somewhat to roughly 2.2 million by 2016 (Gramlich, 2018). With around 2.2 million inmates in federal, state, and private prisons in the U.S., prison labor has grown into a billion-dollar industry providing products and services to private corporations, nonprofits, and federal and state agencies (Goodridge, Schwartzer, Jantz, & Christian, 2018). The 13th amendment of the United States Constitution, which was ratified in 1865, officially outlawed involuntary servitude in the U.S., "except as a punishment for crime whereof the party shall have been duly convicted." The vague wording of the 13th amendment allows for the abuse and exploitation of inmates' labor as it does not define any particular set of circumstances under which the involuntary labor of prisoners would not be allowed. Therefore, it is not unconstitutional to force prisoners, even those with non-violent offenses, to labor for the state. In fact, a prisoner who refuses to work can be punished with solitary confinement or the loss of visitation privileges (Kozlowska, 2016). For cases of extremely abusive and dangerous punishment or working conditions, prisoners may be able to bring constitutional claims of cruel and unusual punishment. However, this type of claim is often challenging to bring (Dougherty, 2007) and does not address fair wages and other forms of discrimination. As such, prison labor is an extremely complicated concept with multiple facets, where instances of possible corporate slavery are intertwined with routine, legal labor.

Further, while the Ashurst-Sumners Act amendment of 1940 made the direct public consumption of goods produced by prisoners in the open market illegal, the Prison Industry Enhancement Certification Program (PIECP) was created in 1979 as an exception to this restriction. PIECP allows prisons to contract with private organizations to produce goods to sell on the national open market and, as of 2016, 47 U.S. jurisdictions were PIECP certified, employing a total of 5,435 inmates nationally (Goad, 2017). Under PIECP, prison workers are considered to be directly employed by the participating private organizations. As such, PIECP-certified programs must pay wages that are comparable to those earned by civilians performing similar work in the same region (Goad, 2017). However, despite receiving taxpayer funds, corrections departments are allowed to withhold money from prisoners' paychecks for room and board, restitution for victims, domestic support obligations, and taxes, leaving incarcerated workers under this program to earn roughly $98.00 per month (Goad, 2017). As a result, the average wage for inmates in the U.S. is 93 cents per hour and can fall as low as 16 cents per hour after deductions, even when employed at private organizations (Bozelko, 2017). While this practice appears inconsistent with federal minimum wage laws, it is still controversial as to whether it constitutes corporate slavery. In addition, inmates who have brought lawsuits alleging unfair wages under the Fair Labor Standards Act (FLSA) or claims of discrimination under Title VII, have been overwhelmingly ruled against as a majority of U.S. federal courts have consistently held that inmates do not fall under the definition of "employee" because "incarcerated workers and the institutions for which they work are in nonmarket or noneconomic relationships" and are not in an employer/employee relationship (Goad, 2017, p. 189). Other federal courts have simply held that inmates are not employees because the essence of the social relationship between the inmate and the correctional facility is based primarily on incarceration and not employment (Goad, 2017). Furthermore, the Equal Employment Opportunity Commission (EEOC), a federal agency that enforces employment laws like Title VII and the Equal Pay Act, maintains that while employment antidiscrimination laws may apply in situations where prisons unfairly discriminate or interfere with prisoners' employment with outside employers involving work release programs, no employment relationship exists between the prison and its prisoners as this "employment relationship" flows out of the prisoners' incarceration (Threshold Issues, n.d.).

While prisoners are unable to unionize or receive any benefits from the corporations that profit from their work, the companies benefit through various tax subsidies from the U.S. tax code and other cost benefits for simply hiring inmates (Khalek, 2011). For example, the use of Louisiana prison labor by British Petroleum for some of the cleanup following the Deepwater Horizon incident, provided the company with significant savings and there was some controversy around how quickly the company recovered given the damage done to the Gulf region (Khalek, 2011). Regardless of whether these instances constitute corporate slavery, studies have proposed that paying higher wages to inmates during their sentences can allow them to save money for when they are released resulting in lowered recidivism rates (Decker, 2013). This factor alone, is indicative of a substantial social benefit from modifications to prison labor programs.

In addition, prison labor is not only limited to the United States. For example, prisoners in Vietnam process cashews for nut company subcontractors, which is one of that country's major revenue sources. Prisoners convicted or even just accused of drug possession and other offenses are forced to husk cashews, which exude irritating oil onto their skin and into the air (Marshall, 2011). Switzerland-based Vestergaard Frandsen, severed ties with several Vietnamese subcontractors when it discovered that many of its mosquito bed nets were made by prisoners (Marshall, 2011). In most detention centers across its mainland, prisoners in China, even if merely suspected of committing a crime, are forced to work in deplorable conditions producing goods for consumption in the United States (Guangcheng, 2016).

Sweatshops

A sweatshop is defined as "a place where people work long hours at low wages under unhealthy conditions" (Sweatshop, 2018). As another controversial form of labor management, the use of sweatshops is frequently referred to as corporate slavery or forced labor and several companies have come under fire for controversial compensation practices and working conditions. One of the best known incidents of sweatshop practices occurred on April 29, 1996, when Charles Kernaghan of the Institute for Global Labour and Human Rights (IGLHR), told Congress about unjust conditions present in Kathie Lee Gifford's Wal-Mart clothing line and alleged that sweatshops in Honduras were subjecting children to 20 hour shifts while producing the clothing (Blumgart, 2013). The fallout was disastrous for Kathie Lee, who claimed that she knew nothing of the practices and she, subsequently, began to campaign against sweatshop conditions to raise awareness (Strom, 1996). The use of sweatshops is not uncommon in many countries, such as Bangladesh, Jordan, and China, where child labor is prevalent and laws against forced labor and protecting worker rights are not regularly enforced and who produce goods for multinational companies, including Wal-Mart, Target, Macy's, and others (Ross, 2011).

Sweatshop conditions and labor violations are not exclusive to the international arena and companies who are exposed for engaging in these practices frequently lose minimal business and experience little, if any, long term financial losses. For example, in 2012, Wal-Mart terminated its contract with one of its seafood suppliers from Louisiana due to reported labor violations. C.J.'s Seafood, which sells an estimated 85% of its crawfish to Wal-Mart, was being investigated for having terrible working conditions, forcing guest workers to work 16 to 24-hour shifts without overtime pay, sometimes even locking workers in the plant (McMahon, 2012). "Guest workers are temporary workers from abroad who typically receive special visas to do seasonal work" (Greenhouse, 2012a, para. 4). They are incentivized by the potential for better salaries in the United States; however, the treatment is worse and worker protections are limited. Wal-Mart chose to suspend business with C.J.'s Seafood shortly after the case concluded in June 2012 when the company was fined approximately $34,000 for committing 11 safety violations and ordered to pay $214,000 for violations of wage and hour rules (Greenhouse, 2012b). In another example, between April and June of 2016 in Los Angeles alone, the Department of Labor investigated 77 clothing factories and over 85% of them had labor violations and, while they fined the companies $1.3 million in back wages, lost overtime, and damages, it did little to damage their brands (Kitroeff & Kim, 2017).

In addition to low wages, poor working conditions, harsh production quotas, long work hours, unsanitary conditions, and hazardous workplaces, other alleged abuses at sweatshops and in prisons around the globe include inhumane treatment by managers including rape, beatings, and psychological abuse (Blumgart, 2013). Due to the limited remedies that the workers have to exercise for improved conditions, sweatshops and prison labor are at the core of corporate slavery. However, other forms exist and remain in use, such as human trafficking and forced migrant labor.

Human Trafficking and Forced Migrant Labor

While human trafficking and forced migrant labor are often used interchangeably, they are somewhat different. Forced migrant labor is a similar concept to human trafficking, but it may or may not involve human trafficking, whereas, virtually all human trafficking involves a form of forced labor or slavery. Human trafficking accounts for approximately 600,000 to 820,000 new victims being trafficked internationally and 50,000 being trafficked across US borders each year (Global Slavery Index, 2016). In this form of modern slavery individuals may be deceived into entering the United States under fraudulent circumstances and are then forced to work against their will, often in sweatshops and other unhealthy environments. For example, Lakireddy Bali Reddy, a California entrepreneur and criminal who was convicted of human and sex trafficking in 2001, worked together with several of his family members to import hundreds of immigrants from India by using fake visas and false identities to disguise them as highly skilled software technology professionals and instead employed them for long hours at minimal wages as waiters, cooks, dishwashers, and prostitutes in his businesses and required they return most of those wages in exchange for rent to live in apartments that he also owned (Batstone, 2007).

Forced migrant labor is one of the more common forms of slavery and indentured servitude where the worker takes an opportunity to migrate to a perceived better environment only to find themselves trapped under the control of the wealthy person who paid for their transport (Batstone, 2007). It differs from human trafficking in that many workers enter the country legally, but are then exposed to abhorrent working conditions in order to stay. It is prevalent throughout the world, but is mostly concentrated in Southeast Asia, Northern and Western Africa, and parts of South America (Bales, 1999). For example, in South Asia, an owner of a rice mill used small loans to enslave an entire village by forcing them to work for 18 hours per day and banning them from passing beyond the walls of the rice mill without supervision (Batstone, 2007). In another example, in the previous case of C.J.'s Seafood, the guest workers gained entry legally and willingly, but were subsequently threatened with beatings in order to increase productivity and warned that their families in Mexico would get hurt if they complained to the government agencies and were charged $45 a week to sleep in moldy and crowded trailers infested with rats (McMahon, 2012).

While frequently considered to be the product of black market business dealings, human trafficking and forced migrant labor can be implemented in almost any organizational structure and victims are frequently used in manual labor and industrial jobs that may be difficult to staff at necessary levels using traditional methods or are frequently sources of work for immigrants so it may be difficult to distinguish between legal workers and those who are victims forced labor or human trafficking.

FACTORS OF CHANGE

One of the most difficult aspects of modern and corporate slavery is that, as it is illegal, there isn't any formal ownership or tracking, which allows the slavers to take advantage of the enslaved who have little to no power to resist or seek a remedy. Today, slave labor has both a direct and indirect impact on the success of individuals and businesses as, aside from facing legal judgments, businesses can easily have their image and credibility destroyed as a result of their involvement in such practices (Meinert, 2012). Therefore, some of the most significant obstacles to eliminating corporate slavery lie in the international realm, where laws designed to fight slavery may be weak or inconsistently enforced with very little hope of a global community led intervention through military action and countries that are corrupt in their practices are indifferent to the problem or have long histories and cultural traditions in support of slave trades (Byerly, 2012). As such, active pressures from the public, customers, stakeholders, non-governmental organizations (NGOs), governments, and other companies are vital to promote the strengthening of global worker rights. Currently, there are a number of laws, policies, and initiatives underway that attempt to tackle this problem, albeit with varying levels of enforcement and effectiveness. The main areas in which pressures can affect companies are: awareness and corporate socially responsibility (CSR) and state and federal regulation.

Awareness & Corporate Social Responsibility (CSR)

As globalization increases and consumers become more aware of potential issues and the movement towards conscious consumerism grows, organizations will be increasingly held accountable for how they staff their labor force and how those employees are treated (United Nations Environmental Programme, 2017). However, the average consumer does not ordinarily take the time to investigate the conditions under which the products they consume are produced, so they may remain unaware as to their role in reinforcing or condoning these practices. In addition, even though the consumer may be aware, they may have limited funds or access to properly evaluate the products, may simply pursue the cheapest without regard to the ethical implications, or may be detached enough from the victims that they do not care about labor practices. While there is a growing push towards using personal values to support business initiatives and product purchases, there remains a substantial customer base for those companies that do not engage in ethical practices (Brinkman, 2004; Wicker, 2017).

In addition to consumers being aware and engaging in ethical consumerism, stockholders can also indirectly influence the use of corporate slavery by demanding accountability from their CEOs and top level managers to ensure that they are in compliance with the corporate values and clearly convey that slave labor and abusive practices are not an acceptable business practice. Many of these social changes and shifts away from slave labor and disadvantageous employee relationships are being led by the stockholders and CEOs as they begin to recognize the benefit of being proactive when it comes to employee treatment. However, there is still a long way to go as many corporations are taking advantage of poverty stricken people both domestically and abroad and paying them just enough to barely survive, sometimes forcing them into situations where they must rely on public assistance, while rewarding the CEOs with extremely high salaries and annual bonuses. For example, the typical US CEO in 2016 made 271 times the average US employee salary of $58,000, whereas in 1978 CEOs only made 30 times the average worker, making for an adjusted inflation rate of 11.2% for employees and 937% for CEOs (Mishel & Scheider, 2017). This problem is not exclusive to the US and implementing regulations on CEO pay is controversial; however, it does raise the question as to why companies are still engaging in any form of forced labor when they could arguably be quite profitable without violating ethical and legal treatment standards (Doran, 2009).

Unfortunately, the attraction to lower labor costs often overrides the desire for ethical integrity, as most multinational corporations that close "first-world" manufacturing plants to move to "third-world" plants do so due to the less restrictive labor laws and lower perceived costs (Bales, 1999). This leads to another issue with targeting corporate slavery in that most human rights infringements do not occur as a direct result of the organization's practices, but indirectly through third party manufacturers and contractors (Byerly, 2012). As such, the overwhelming burden of creating safe and ethical work environments rests on the retailers and wholesalers to make sure slave-made goods and services are kept out of stores and away from consumers. Additionally, the retailer is in a much better position to negotiate for products that meet global ethical and legal standards while balancing customer demands for high quality and low prices than the customer is as the customers have even more indirect control over the products which they can access and afford. If the retailer demands information regarding human rights activities during the negotiation phase and refuses to carry products that violate ethical and legal standards, then manufacturers and their contractors will be forced to address the issues.

This retailer education and negotiation component can involve multiple steps. As a first step in prevention of selling slave made products, businesses can educate their contract negotiators to take notes of any of the "red flags" guidelines set forth by Polaris, a NGO designed to combat slavery, which include how freely the workers are to move from where they work or live, how many possessions they own, how much debt they are in, or whether they hold legal identification or passports (Meinert, 2012). Organizations should routinely conduct audits to check for such signs and, if discovered, the company should take immediate action by severing ties with the manufacturer/contractor and reporting it to the proper authorities as well as actively supporting any legal investigations into the activities.

For the past several years, Coca-Cola has been leading the charge in the awareness arena. By co-organizing a conference with multiple business groups, including the U.S. Council for International Business, the U.S. Chamber of Commerce, and the International Organization of Employers, Coca-Cola has been instrumental in shedding light on the current global issues relating to human trafficking, ensuring that these issues are kept at the forefront of business considerations (Meinart, 2012). Having champions like Coca-Cola, makes the considerations of such issues trickle down to smaller companies and increases funding to protect vulnerable people. Another group that raises awareness is Anti-Slavery International, which works worldwide to end slavery, but does so through multiple avenues at once by reaching out to local organizations, exposing slaveholders, pressuring companies, lobbying governments, and corresponding with the United Nations (Bales, 1999). While these are just two examples, they show that the pressure to reduce reliance on slave labor must come from multiple sides at multiple levels of economic status in order to be truly effective and motivate both companies and governments to think about or change their current supply chain policies. In addition to the generation of awareness for social causes and ethical labor policies, organizations must also ensure that their corporate values are strong enough to convey a sense of responsibility beyond just the traditional economic view of the firm as existing solely to make a profit and recognize the need to create a sustainable future.

Part of creating a sustainable future is to focus on the concept of corporate responsibility as more than simply generating profits and instead becoming a harbinger of preserving profitability into the future, both for long term economic feasibility of the company and the economy as a whole through recognizing the concept of corporate social responsibility (CSR) and sustainable business practices. With CSR initiatives, organizations are recognizing that they function as more than just economic bodies and through their financial forces, they can effect positive change in political, social, and environmental policies and practices and feel responsible to do so. Currently, forced labor makes up 17% of total human trafficking and is primarily justified through the business "need" arguments, as such, any efforts in finding a resolution must target those organizations that profit from and directly or indirectly support abusive work practices by instilling CSR as an integral strategy to prevent worker abuse now and in the future (Byerly, 2012). The best way that this can be accomplished is by holding a firm's decision makers accountable and creating and enforcing financial consequences for labor violations. For instance, some polls taken of Americans have shown that they are completely supportive of the notion of CSR in that if products are similar in price and quality, 84% of them are likely to switch brands because of that company's associations (Dess, Lumpkin, Eisner, & McNamara, 2012).

NGOs deliver another area of support in shaping corporate social responsibilities. For instance, the Rugmark Campaign is an NGO that has worked effectively in combating modern slavery. It was created to reduce child labor abuse in the rug and carpet making industry in India and put pressure onto both individual and retail customers who were purchasing rugs and carpets made using slave labor by promoting a special tag that would indicate that forced labor was not used in production (Bales, 1999). The Otto Versand Group, the largest mail order company, along with other major retailers in the United States, Germany, and Holland, now import only Rugmarked carpets (Bales, 1999). This shows how positive pressure exerted by NGOs can best be used to influence CSR, as customers buying patterns trended towards wanting Rugmarked products which shaped corporate buying behaviors and made it more difficult for manufacturers to be profitable if they used forced labor. The effects of NGOs are also evident in the Nike Corporation which modified their production practices after NGOs brought attention to their practices of utilizing sweatshops by creating a code of conduct for its factories and a department specifically focused on improving labor conditions (Nisen, 2013).

State Regulation

While awareness and CSR can create positive momentum, complete elimination of unethical labor practices may require state and federal regulation making such practices illegal. While both domestic and international laws and policies already exist that make it illegal to enslave workers and create opportunities for remuneration, there remain issues with education and enforcement and loopholes that need to be closed. One example of an additional initiative is the California Transparency in Supply Chains Act, which takes the additional step of requiring retail sellers and manufacturers who have more than $100,000,000 in gross annual revenue and operate in the state of California to train, monitor, and report that their supply chain is free from human abuse (Harris, 2015). California is an ideal location to start such regulations as it has the 5th largest economy in the world (Corcoran, 2018). Thus, major retailers like Wal-Mart and Target, must now comply with the regulations by posting compliance efforts on their websites, consisting of specific efforts to verify, audit, certify and train their workers, managers, buyers, and merchandisers to follow their Statement of Ethics and Standard for Suppliers (Harris, 2015).

The importance of this disclosure cannot be understated, because it requires leading retailers to make a public stance regarding the prevention of labor abuses and places pressure on them to be proactive. Unfortunately, the actual transfer of public reporting to organizational policies is mixed, which underscores the need for federal interventions (Todres, 2015). In fact, the federal government of the United States is and has been taking a more involved approach in fighting for the rights of humans worldwide to stop offensive labor practices. For example, strong legislation known as the Trafficking Victims Protection Act of 2000 (TVPA) and subsequent iterations were approved precisely to address the problem by expanding outdated laws regarding forced servitude and awarding assistance to victims who testify against their abusers, which helps greatly in restricting the flow of human trafficking (United States Department of Justice, 2010). For example, in the C.J.'s Seafood case involving Wal-Mart, two workers who testified were able to secure visas in exchange for their testimony against their administrators (Serwer, 2013). Positive examples like that show how the world will benefit from such laws, since authentications of abuse must occur for prosecutors to win their case and would be unlikely to occur if victims were not encouraged or incentivized to be vocal about such abuses. Moreover, the federal government may be in a better position to fund rehabilitation efforts for victims who may be both mentally and physically fragile after rescue and the recovery process can take years. Furthermore, the federal laws can increase the coordination between local, state, federal, and international governments allowing them to increase the range of detection and bring about efforts to rescue victims and launch cases against abusers (United States Department of Justice, 2010). Influential nations, such as the United States, can work with other governments and pressure companies to secure the rights of their workers. Lastly, as the government increasingly works with mistreated employees, it can identify weaknesses in current laws or policy and work to correct oversights in the system. For example, legislation is underway to alter the way the visa system works to give businesses less power over their workers by giving them the right to apply to similar jobs rather than being forced to stay at one job for the duration of their visa, which will prevent businesses from threatening employees with visa termination if they aren't meeting unrealistic demands and increase employee mobility (Serwer, 2013).

CONCLUSION

Today, slave labor can happen anywhere and it has a devastating impact by threatening jobs and endangering individual civil liberties and safety. Organizations must be aware of potential abusive behaviors regarding prison labor, sweatshops, and human trafficking and forced migrant labor in order to effectively combat such practices and create a sustainable future. By increasing awareness and corporate social responsibility and creating and enforcing laws, people, organizations, and governments can reduce and potentially eliminate abusive labor conditions and slave labor.

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Alison E. Wall, Southern Connecticut State University

Robert A. Smith, Southern Connecticut State University

Omid Nodoushani, Southern Connecticut State University
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Author:Wall, Alison E.; Smith, Robert A.; Nodoushani, Omid
Publication:Competition Forum
Geographic Code:1U9CA
Date:Jul 1, 2018
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