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# Exploitation

Lerne mit deinen Freunden und bleibe auf dem richtigen Kurs mit deinen persönlichen Lernstatistiken

Nie wieder prokastinieren mit unseren Lernerinnerungen.

Have you ever been paid to do a job for someone only to find out that other people got paid way more to do the same job? It makes you feel kind of used. Your skills have been used by someone else to complete a task that they needed to have finished and you were not fairly compensated for your efforts. Unfortunately, this happens every day, all around the world. Oftentimes, those who are exploited either do not know it or cannot do anything about it because any job is better than no job. This explanation will define exploitation, cover various types, and examine some examples. Sounds like what you were looking for? Let's get right into it!

## Exploitation Definition

Traditionally, the exploitation definition is to take advantage of someone or something so that you can profit from it. From an economic perspective, nearly everything can be exploited whether it is people or the earth. Exploitation is when someone sees an opportunity to make themselves better off by using someone else's work unfairly.

Exploitation is when one party unfairly uses the efforts and skills of another for personal gain.

Exploitation can only happen if there is imperfect competition where there is a gap in information between the workers who produce a good and the price that buyers of the good are willing to pay. The employer who pays the worker and collects the consumer's money has this information, which is where the employer makes their disproportionately large profit. If the market were perfectly competitive, where buyers and sellers had the same information about the market, it would not be possible for one party to have the upper hand over the other. Exploitation can happen to those that are in a vulnerable position where they are in financial need, do not have an education, or have been lied to.

Note: Think of employers as buyers of labor and workers as sellers of labor.

To learn all about perfect competition, have a look at our explanation

- Demand Curve in Perfect Competition

When someone or something is vulnerable, it is not protected. Protection can come in the form of financial stability or an education to be able to recognize when something is unfair and be able to advocate for yourself. Laws and regulations can also help protect more vulnerable members of society by providing legal barriers.

Exploitation is an issue because it is harmful to those that are exploited since they lose out on benefits or profits that they could have earned. Instead, they were either forced or cheated out of the benefits of their work. This creates and exacerbates the imbalances in society and it is often at the cost of the physical, emotional, and spiritual welfare of the exploited.

## Labor Exploitation

Labor exploitation refers to an imbalance and often abuse of power between the employer and the employed. The laborer is exploited when they are not properly compensated for their work, they are forced to work more than they want to, or they were coerced and are not there of their own free will.

Usually, when someone is employed, they can decide if they are willing to work for the compensation that the employer is offering. The worker makes this decision based on the information that they have available to them like the pay for the labor they will be doing, the hours, and the working conditions. However, if the employer knows that workers are desperate for jobs, they can pay them a lower rate, force them to work more hours, and in worse conditions and still be confident that they will be able to hire enough workers to maintain their supply chains. They are exploiting the financial need of the workers.

It is not always a given that the workers know their worth. A firm might have to pay $20 per hour in one country and so they move their operation to somewhere they only have to pay$5 an hour. The firm is aware of this difference in wages but it is in the firm's best interest that the workers do not have this information lest they demand more.

Sometimes the company itself does not set up a factory in another country but hires a foreign company to do their production. This is called outsourcing and we have a great explanation to teach you all about it here - Outsourcing

Some firms may place minimum working hours per worker. This requires the worker to complete the minimum requirement to be able to keep their job. If a country does not set maximum working hours per shift or per week, firms can mandate laborers to work more than they want to so that they can keep their job. This exploits the workers' need for a job and forces them to work.

## Capitalist Exploitation

Capitalist exploitation takes place under capitalist production when the employer receives a greater benefit from the good that a worker produced for them than the compensation that the worker receives for producing it.1 The exchange between compensation and services rendered is asymmetrical when it comes to the economic value of the good.1

Capitalist Carla asked Marina to knit a sweater for her so that Carla could sell it in her shop. Carla and Marina agree that Carla will pay Marina $100 for knitting the sweater. Come to find out, Capitalist Carla sold the sweater for$2,000! Because of Marina's skills, effort, and materials, the sweater she knit was actually worth \$2,000 but Marina did not know that, since she had never sold one in a store like Carla's before.

Capitalist Carla, on the other hand, knew what price she would be able to sell the sweater for. She also knew that Marina did not truly know what her skills were worth and that Marina did not have a shop to sell the sweater in.

Under capitalist exploitation, the worker is being compensated for the physical work they put into producing the good. What they are not being compensated for is the knowledge and skill that the worker possesses to be able to produce the good in the first place. Knowledge and skills that the employer does not possess. Where the employer has the upper hand over the worker is that the employer has an overview and influence over the entire production process, start to finish, where the worker is only knowledgeable about their particular portion of the production process.1

Under capitalist exploitation, the producer's level of compensation is just enough for the worker to be able to survive and continue producing.1 No more, otherwise, workers might elevate themselves out of a position where they can be exploited, but no less either, lest workers not have the energy to continue to work.

## Resource Exploitation

Resource exploitation relates mainly to the over-harvesting of our earth's natural resources, whether they are renewable or not. When humans harvest natural resources from the earth, there is no way to compensate the earth. We cannot pay, feed, or clothe the earth, so we exploit it every time we collect its natural resources.

The two categories of resources are renewable resources and nonrenewable resources. Examples of renewable resources are air, trees, water, wind, and solar energy, while nonrenewable resources are metals and fossil fuels such as oil, coal, and natural gas. When nonrenewable resources eventually run out, there will be no efficient way to replenish them. With renewable resources, this does not have to be the case. For some renewables, like wind and solar, there is no risk of overexploitation. Plants and animals are a different story. If we can exploit renewable resources like trees at a rate that allows them to regenerate at least as quickly as we harvest them, then there is no issue.

The issue with natural resource exploitation comes in the form of overexploitation. When we harvest too much and do not give the resource time to regenerate, it is the same as a producer not paying their workers enough to survive and then wondering why production levels are falling.

One way to prevent the overexploitation of natural resources is to limit their trade. If firms cannot trade as many resources or are taxed on the quantities they trade, they will be discouraged from doing so. Our explanations of these protectionist measures will help explain why:

- Export

- Quotas

- Tariffs

## Exploitation Examples

Perhaps the most well-known exploitation examples are the sweatshops that many fashion brands use to mass produce their garments. Big brands like H&M and Nike are well known for exploiting the inhabitants of developing nations like Cambodia and Bangladesh.3 Especially during challenging times like the COVID-19 pandemic, is when it is made clear that these sweatshop workers are not treated with the same standards as workers in the home nation are. For example, while H&M's headquarters are in Stockholm, Sweden, the workers in its Bangladeshi sweatshops had to fight to be paid their wages for the hours that they worked.3 Developed nations, like Sweden, have government policies in place that advocate for the right of the workers which makes it nearly impossible to get away with delaying or not paying workers their hard-earned wages. Big corporations know that developing nations like Bangladesh do not have this same level of extensive policy infrastructure in place yet to protect workers' rights.

Another exploitation example is the agricultural industry in the United States, where undocumented immigrants and even those with visas are kept isolated and in debt by their employers.4 Undocumented immigrants have the obvious issue of being undocumented, meaning the threat of being reported, jailed, and deported is very real. Employers know and exploit this fact and threaten undocumented workers with turning them in.

In the US, the H-2A Visa program allows employers to hire foreign workers for up to 10 months. Because the workers are hired outside of the US, the employer does not abide by US hiring standards and can specifically seek out workers that are less likely to make a fuss about any injustices like unpaid hours, short paychecks, or unacceptable working conditions.5 Both undocumented and H2-A visa workers rely heavily on their employers for basic needs like housing, food, and transportation because they arrive with little to nothing, and often have no local family.4 Employers will promise workers housing and transportation as a part of their contract without informing them that these expenses are taken out of their paychecks, usually at above-market rates.4 The employers who do this rely on language barriers, different cultural standards, and the workers' lack of social standing to get away with these practices.

## Exploitation - Key takeaways

• Exploitation happens when someone or something is taken advantage of for the gain of another party.
• Exploitation happens in imperfect competition when all parties involved do not have all the information necessary to be on equal footing to make decisions and demands.
• Labor exploitation happens when there is a great power imbalance between the employer and the employee where the employee is subject to unfair working conditions.
• Capitalist exploitation happens when workers are not adequately compensated for the work that they do for the employer.
• Resource exploitation occurs when people harvest natural resources from the earth, usually in a way that is not sustainable in the long term.

## References

1. Mariano Zukerfeld, Suzanna Wylie, Knowledge in the Age of Digital Capitalism: An Introduction to Cognitive Materialism, 2017, https://www.jstor.org/stable/j.ctv6zd9v0.9
2. David A. Stanners, Europe's Environment - The Dobris Assessment, 13. Exploitation of Natural Resources, European Environment Agency, May 1995, https://www.eea.europa.eu/publications/92-826-5409-5/page013new.html
3. Clean Clothes Campaign, H&M, Nike and Primark use pandemic to squeeze factory workers in production countries even more, July 2021, https://cleanclothes.org/news/2021/hm-nike-and-primark-use-pandemic-to-squeeze-factory-workers-in-production-countries-even-more
4. National Farm Worker Ministry, Modern-Day Slavery, 2022, https://nfwm.org/farm-workers/farm-worker-issues/modern-day-slavery/
5. National Farm Worker Ministry, H2-A Guest Worker Program, 2022, https://nfwm.org/farm-workers/farm-worker-issues/h-2a-guest-worker-program/

Exploitation is when one party unfairly uses the efforts and skills of another for personal gain.

Exploitation happens when there is a gap in information between the workers who produce a good and the price that buyers of the good are willing to pay. The employer who pays the worker and collects the consumer's money has this information, making it possible for the employer to earn a large economic profit while only paying the worker for the energy it took to produce, and not the knowledge they needed to produce.

Exploitation is an issue because it is harmful to those that are exploited since they lose out on benefits or profits that they could have earned.

Labor exploitation refers to an imbalance and often abuse of power between the employer and the employed where the worker is paid less than a fair wage.

Two examples of exploitation are the sweatshops fashion brands use to cheaply mass-produce their clothing and shoes and the wage gap between domestic workers and the mistreatment of migrant workers in the agricultural sector in the US.

## Exploitation Quiz - Teste dein Wissen

Question

What is exploitation?

Exploitation is when one party unfairly uses the efforts and skills of another for personal gain.

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How can labor be exploited?

Labor can be exploited by not paying adequate wages, not paying for it at all, or not providing proper working conditions because the workers do not have the social backing to stand up for themselves.

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How can the earth be exploited?

Humans can exploit the earth by overharvesting its natural resources without allowing it to recover.

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What is not being compensated for under capitalist exploitation?

The knowledge of the worker.

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How is it possible for people to be exploited?

People can be exploited when they do not have a full picture of the market and are ignorant of other wages and options. Also when they are in a vulnerable financial position it is easier for companies to take advantage of their desperation.

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Is exploitation harmful?

Yes, because it takes advantage of people and resources without providing proper compensation.

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Why do some workers stay even if they are being exploited?

They are in a financially difficult place and need the money.

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Why would it not be possible to exploit workers if there was perfect competition?

Because employers and employees have the same information about the market, it would not be possible for one party to have the upper hand over the other.

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How can people be protected from exploitation?

Education.

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If an employer pays someone who has never weaved a rug the same minimum wage as someone who has weaved 10,000 rugs, what kind of exploitation is most likely happening to the experienced weaver?

Capital exploitation.

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An example of resource exploitation is ____.

Loggers cutting down every tree in a forest.

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What is a real world example of labor exploitation?

Sweatshops in developing nations and the treatment of migrant farm workers in the US.

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What type of resources can not be overexploited?

Renewable resources like wind and solar energy.

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Under capitalist exploitation, the worker is being compensated for the _____ of producing the good but not for the ____  that the worker possesses.

Physical work, knowledge and skills.

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What are some ways farms exploit migrant workers in the US?

Offer them H2-A visas.

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