Nike is oft-maligned for its sweatshop practices. I was following a Supreme Court for a while, and the Nike case piqued my interest. I read the California brief and concluded that these corporations are not interested in being truthful about their business practices (Nike's audits seem to back up the contention that they continue to run sweatshops, despite their claims to the contrary).
I don't know quite what to do about this, except to consider where my money goes, and to support efforts like unionization that work to improve the working conditions of the world.
Money spent on anything goes to an array of people. My goal is to think about who those people are, what their contribution to the product is, and how fairly the money I spend gets apportioned to them. This is part of my responsibility as an Informed Consumer participating in that democratic process of the Free Market: if I believe that one product is better than another--where "better" includes social costs as well as financial costs to me--I should choose to buy it.
I'd like to be sensitive to environmental issues. Following the Cradle to Cradle model, I'd rather buy natural fibers than synthetic.
I don't know to what degree the country of origin hedges against sweatshops. Certainly I've considered buying nothing but Italian-made shoes and dress clothes. Sweatshops can be found in the U.S. I've been hoping that the union-made label helps guard against local sweatshops.