In China, in the first nine and a half months of last year,
1,146 Chinese coal miners died in work-related accidents; in comparison, 17 American
coal miners died in work-related accidents in 2011. Such alarming statistics
caught the attention of Columbia University economist Ray Fisman and University
of Southern California finance professor Yongxiang Wang who wondered if they
could document the link between the nature of a firm’s management and its rate
of worker fatalities. They studied 276 Chinese firms operating in hazardous
industries like mining, smelting, construction, and chemical processing from 2008-2011.
Chinese firms that included managers who had previously held
high-level government posts were defined as politically “connected.” The correlation
they found was alarming - connected Chinese companies averaged FIVE TIMES more
fatalities than similar unconnected companies. The new Chinese Communist Party
leader pledged to make cleaning up corruption a priority, though many are
skeptical about if he actually can do so.
Corruption has grown to more that just a monetary leakage,
it’s now directly taking the lives of thousands of workers.
Do you think that it is the responsibility of the federal government to intervene upon reckless businesses, or is it the responsibility of businesses to correct their practices when accidents occur?
ReplyDeleteIt's a bit alarming that the mining industry in China continued operation as normal when accidents were occurring at such alarming rates. At some point, firms need to hold THEMSELVES responsible for their actions; employee deaths should inspire radical reform within a firm.
In the end, the Chinese government is undeniably correct to intervene in their mining industry. The sad part, for me, is that they were forced to do so.
I totally agree with Colton...however, businesses, no matter what, are essentially in the business of making money. That is what businesses truly care about and they don't mind breaking rules to achieve whatever it is they want to achieve. As long as they can escape it, life is beautiful (for them). Therefore, I think it is unwise to imagine that any corporation will be socially responsible without government intervention.
ReplyDeleteThe issue (problem) in China is that they have a plethora of cheap and seemly dispensable unskilled labor that is coupled with the goal to constantly find ways to minimize costs, in this case, of the flexible unskilled labor force. I think that in the Chinese mining industry, the potential of higher productivity clearly outweighs that risks of injury and death to labor.This is a disturbing business ideology that the government has "helped" induce, and thus should be the one to tackle it.
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