Situation

G.T. Research Associates is hiring part time employees for a six month project to do telephone interviews. They were awarded this contract because they substantially underbid two other research consulting firms and they are eager to “get off the ground” with their new venture. They are able to hold down their costs because they have access to a large pool of part-time undergraduate students who have been in their classes and who have few other job opportunities in this small community. The wages they pay are low and they save on training costs because students have had some beginning research training in their courses.

Questions

1. Are the employers’ wage setting practices in this captive labor market ethical? What are their obligations to former students and other potential employees in ensuring fair employment practices? Would this be different at an expensive liberal arts college compared to a community college located in the inner city?
2. What is the likelihood that these researchers can draw on the semi-trained skills of their former students? DO they have an obligation to the granting organization to ensure that they have a sufficient employment pool? A well-trained employment pool?

Discussion

G.T. Research Associates, as a small business, is required to comply to all federal and state labor laws which protect the rights of employees and ensure fair labor practices. Although G.T. Associates may not pay high wages or offer benefits to its employees, it must follow the regulations related to withholding, unemployment compensation, workmen’s comp., etc. As long as G.T. Associates advertises for these positions and students apply on other own volition, there are no ethical violations and it cannot be argued that G.T. Associates is “exploiting” the students. On the other hand, if the adjunct professor who owns and operates G.T. Associates required the students to conduct interviewing as part of their course grade (even if they were paid), this would be an ethical violation since the students would have felt “coerced.”  

As for the quality of the employment pool, G.T. Associates should have made it clear that the employment pool consisted of students who have already had some research training. It is still the responsibility of G.T. Associates to guarantee the quality of the interviewers; therefore, any additional training should be provided prior to beginning the work. If G.T. Associates does not provide this training and the performance of the students is poor, G.T. Associates will pay the price in the long run. The quality of the final product is the responsibility of G.T. Associates, not the individual students hired to conduct the interviews. Therefore, if the product is not up to standards, it will be difficult for G.T. Associates to grow and prosper.

The employers’ wage-setting practices in the captive labor market are ethical because, as mentioned, they comply with labor laws. Despite the low pay, G.T. Research Associates