Increasing Shareholder Wealth
INTRODUCTION
The goal of all corporations is to increase shareholder wealth.
Shareholder wealth is increased is by increasing the corporation's profit. In a
corporation involved in manufacturing, reducing the cost of the factors of
production is essential for growth.
One of the major components of production costs is labor. When in comes
to labor costs, the corporation and the worker usually have very different goals.
The corporation wants to pay the worker as little as possible, while
maintaining the productivity and quality required by its customers. The worker,
on the other hand, seeks to increase his or her personal wealth by demanding the
highest possible wages and benefits.
Because of this somewhat adversarial relationship, corporations and
labor have developed strategies to strengthen their positions. One of Labor's
main defenses is to organize in unions. The existence of unions can be an
effective method of gaining a position of strength, especially when dealing with
power corporations. Depending on the size of the corporation, they might have
the power to employ methods which are difficult for the workers to prevent or
counteract.
One tactic used by corporations to reduce labor costs is the utilization
of "sweatshop" labor. A sweatshop is a manufacturing facility that operates
below minimum standards of safety and/or wages and benefits. Sweatshops
flourished in the United States in the late 1800s and early 1900s.
This paper will examine the re-emergence of sweatshop manufacturing in
the U.S. and a ...