In order to have a free or voluntary agreement between two partners, there must be a certain degree of economic equality or balance. If one party has all the economic power and other have none or very little it leads to coercion.
Labor union movement has come a long way in America to improve the working conditions in factories and other workplaces around the country and to have the laborer the deserved share of the economic pie.
As the labor standards in America are reaching heights, third world countries still have very poor standards. Labor in these countries is subjected to sub standards, dangerous, and at times barbaric conditions. They are sometimes force to work long hours for subsistence wages.
American Multinational Corporations are moving towards setting up business and factories overseas to cut down on the cost of labor. This brought to the surface the important issue of sweatshops. American corporations are under enormous pressure from protestors in United States against sweatshops and recently companies like Nike and Kathie Lee Gifford clothing Limited which sell in Wal-Mart were accused of using sweatshops for manufacturing their products.
In contrast, the nations in which these sweatshops are being building do not seem to be complaining. Some believe that the way sweatshops in early days these sweatshops played great part in economic growth in America is crucial to the growth of these third world nations. Other argues that should not oppress or exploit its people in an effort to get its economy started.
The opponents of sweatshops abroad argue the fact that they harm American workers by stealing jobs, and lowering wages, a point that some economists disagree.
Yet when corporations voluntarily cut their ties to sweatshops, the victims can be the very same people. .
Sweatshops opponents say they want to help.
Corporations are trying to adopt careful monitoring practices with their contractors and sub-contractors to make business more transparent.