Do Sweatshop Scandals Really Damage Brands?

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A five-part Global Post investigation charges big-name brands like Apple and Microsoft with sourcing from exploitative factories in Asia guilty of human rights and work safety offenses. But do consumers even care?

Sweatshop scandals make for eye-catching headlines, but seem to have little impact on a company’s image or bottom line. Consumers are able to compartmentalize their own priorities the far-off needs of strangers.[more]

George T. Haley, director of the Center for International Industry Competitiveness, writes in MacNewsWorld:

There will always be a part of the market that will respond to notice of sweatshops being used… But outside of that small constituency, they are hardly ever affected in the long run.

In the 1990s, celebrities and students joined to boycott Nike over working conditions, but this had little impact on Nike’s long-term brand positioning.

Often, abusive working conditions in Asian factories violate the policies of the companies they supply. When exposed, most brands blame suppliers and toughen those policies. But often, these rules are not enforced, making them largely marketing efforts to mitigate damages to the brand’s reputation and public appeal.

“Worse, the codes permit the big brands to pat themselves on the back, even as workers continue to be exploited,” note Jonathan Adams and Kathleen E. McLaughlin in the Global Post article. 

Which begs the question: if sweatshop allegations are not enough to damage brands or decrease sales, what incentives do brands have to change conditions on factory floors?

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