Economics of Society
Economy of society in a whole is basically the state of a country or region in terms of the production and consumption of goods and services and the supply of money. It refers to the financial and trade to the world.
Economics of Nestle- Kit KatsQuick Economic Considerations
- Sales at CHF 83.6 billion - Employs 328 000 people globally - 14.5 billion francs in profit ($15.4 billion)
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Child Labour- in Cocoa Farming
Child labour is a huge problem in key commodities (cocoa, hazelnuts, vanilla). Nestle is being held account for aiding and abetting child slavery in Cote D'lvoire. People claim to have been trafficked as children and forced to work unpaid on Cocoa farms for up to 14 hours a day. Nestle is not in direct relationship with these companies that use children laborers. However, these companies are Nestle's main commodities. Accounts from people who worked as child slaves say that they where 'forced to drink urine' and 'fed scraps and beaten'. It is a huge problem and Nestle has responded. There are over 168 million children across the globe who are forced to work as child slaves. This number is much too large and Nestle are buying products from these companies.
Suggested Strategies to Overcoming These Issues
Issue: Child Labor in Cocoa Farms
Strategy 1:
Having government laws against child labour plus taxes against companies that have children employees and funding for companies that do not employ children. Economic Advantages/Disadvantages
Advantages- Families will have less adults not having jobs. Child laborers take jobs away from adults/parents because they are cheap and sometimes 'free'. If there were more opportunities for adults to have jobs, their families will benefit greatly with the extra income
Disadvantages- Government will need to pay/reward/fund companies that do not employ child laborers. Also companies may lose their profit because child labour is cheap and adult wages are much higher. |
Strategy 2:
Having government and Nestle regulation on all plantations on a regular basis. They will be able to prosecute companies that have children employees. Economic Advantages/Disadvantages
Advantages- Government will recieve tax money from companies that have child slaves. Job openings for people to regulate companies.
Disadvantages- Government will have to pay workers to regulate around the companies (monitors). |
Other strategies include mandatory schooling, funding for companies that do not employ children and regular checks on cocoa farms.
Strategy 1
Economic Consequences
- If there are no child slaves there will be a huge opening of job opportunities for adults. The unemployment rate in countries that supply Nestle cocoa is 25.27%. Even though this number is quite low, the economics of the undeveloped countries that nestle get their cocoa from is quite bellow the developed countries of the modern world, jobs are scarce and most employees are paid at minimum wage. This percentage number may be greatly reduced if cheap child slavery was abolished.
- Families may lose income because in some cases children of families can earn up to 1/4 of the family wage. Eliminating their jobs may be detrimental to the family.
- Companies will gain money because of the reward if they abide by the rules of no child slaves and upholding the human rights of the child.
- Families may lose income because in some cases children of families can earn up to 1/4 of the family wage. Eliminating their jobs may be detrimental to the family.
- Companies will gain money because of the reward if they abide by the rules of no child slaves and upholding the human rights of the child.
Nestle's Response
The Cocoa PlanAs shown in this video, Nestle's main response to child slavery is by building 42 schools by 2016. This would decrease the amount of children that do not have much to do during the day. School would provide them with an escape from working. To add to this, Nestle is taking action by working closer with their suppliers, working with the government and gaining regular updates on their progress on their way to achieving their goal of abolishing child slavery in cocoa farms and throughout their supply chain.
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Quiz Questions
1. What is the basic meaning of 'economics'?
2. What are child slaves?
3. What is one strategy that Nestle could use to decrease the number of child slaves in their supply chain and mainly in cocoa farms?
2. What are child slaves?
3. What is one strategy that Nestle could use to decrease the number of child slaves in their supply chain and mainly in cocoa farms?