The working conditions of many factories overseas are considered poor by United States standards. Many citizens in the U.S. are aware their t-shirts and laptops were manufactured in circumstances they’d never hope to be in themselves. However, this situation has been very difficult to change. 97% of clothing items sold in the U.S. are imported, and consumers have rarely had access to reliable information about the factories providing these goods. This even includes leading executives of U.S.-based companies that depend on these factories. But with the advent of mobile technology, this may be changing, and with it, the marketplace.
In 2010, with support from USAID, Oakland, CA-based nonprofit Good World Solutions began developing a tool called Labor Link. Labor Link harnesses the fact that 89% of people in developing countries have mobile phones to help U.S. firms gather data on their manufacturing outlets. To use Labor Link, factory employees call a phone number and receive an automated call back. They are then offered a multiple-choice survey about their workplace conditions. The process is designed so illiterate workers can participate, and Labor Link assumes the cost of the call.
International labor audits are often conducted by in-person visits to factories. However, these can be unreliable: managers frequently instruct their workers on what to say to auditors. Often, they are present during these visits. Because of this, information reported is not always honest: many workers fear retaliation and even job loss if they give negative reports. Labor Link provides a way for workers to discuss factory conditions anonymously and on their own time. This gives better data to U.S. companies who may not have a clear picture of what life is like in their factories.
This is just one example of the ways digital disruption helps grow equality in the workplace. All around the world, employees and consumers share information about their working situation and the products they buy. This heightened transparency leads to a call for greater corporate accountability, and savvy companies step up to the plate. However, the most ethical labor choices are often the most costly. If this trend continues, what will happen to market prices?
It may well be that certain goods become more expensive, at least in the short term. Clothing companies relying on U.S. factories, such as American Apparel — who built their brand on only using domestic labor — tend to offer more expensive items. The digital trend also helps publicize fights for higher minimum wages in the U.S., leading to increased prices in lower-wage workplaces (such as fast food restaurants). Corporations are struggling to be accountable to both consumers interested in social responsibility and their own bottom line. A more expensive final product may be the result.
In the long run, however, increased equality could lead to a better marketplace overall. Executives that know how to balance ethics with smart business and publicity strategies can harness this trend to their benefit. Constant access to information has made corporate accountability a hot topic, so brands displaying social sensitivity are gaining favor among consumers. Use of tools like Labor Link and B-Corporation Certification have become proud markers of corporate social responsibility. Companies using these are smart to publicize them as part of their branding strategy. In an ideal situation, increased business helps offset the cost of more expensive labor.
Since this shift is just beginning, there’s no surefire way to predict its financial impact. Different industries must respond in ways suitable to their markets. One thing is becoming clear: across all sectors, the public is interested in the initiatives their favorite companies are taking to help equality grow. As digital tools continue to foster greater equality, smart companies will use this trend to distinguish themselves and create a more positive experience for everybody they serve.