Race to the Bottom: How Western Corporations Exploit Cheap Foreign Labor and Its Effects

By Jakob Robinette

Faculty Mentor: Dr. Kimberly Kinsley

Abstract

This thesis is concerned with addressing the impacts of foreign direct investment in poor Southeast Asian and African countries to cut costs that major fashion labels and technology firms can then pass on to the consumer and increase shareholder returns. This “race to the bottom” concept is seen across many industries looking to get a leg up on the competition. As a result, costs are cut concerning workers such as wages, ventilation, heat, lighting, and general safety precautions. This has led to several high-profile incidents such as the Tazreen fire in 2012 and the Rana Plaza building collapse in 2013. As a result, international coalitions have been formed to “combat the injustices against these workers” and ensure that each factory producing goods for Western brands follow the protocol set by the coalition members. This thesis aims to analyze the history of sweatshops in Southeast Asia, cobalt mines in the Democratic Republic of Congo, the many industries connected to them, legislation and regulations passed as a result, the environmental impacts, the reactions of shareholders, and the subsequent public relations issues for top brands associated with sweatshops and cobalt mines alike.


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