Sunday, November 18, 2012

Ikea making a buck sans ethics

It is a story about using forced labor in East Germany in the 80s (before the fall of the wall) to produce components for products for companies like Ikea. [Ikea Admits Use of Forced Labor in the 1980s]. Think outsourcing.

Ikea wasn't the only company - they are just the headliner. Apparently this use of forced labor wasn't just some isolated incident. And, it is much more of a story than the use of prison labor - much of this labor consisted of political prisoners. Political prisoners were once aplenty in East Germany.

Not only is there political and publicity fallout for these companies like Ikea - there is the issue of compensation. It was "said that more needs to be done for the victims, many of whom today live under worse circumstances than their former tormentors." [Hugo Diederich, the chairman of the Association of Victims of Stalinism].

Outsourcing to save a buck (really pennies) carries large risks. Many countries don't share American values. Child labor, prison labor, unacceptable working conditions and pay may make the bottom line look better - but when these conditions are shown the light of day - the companies rightfully pay the price.