Defending Sweatshops - What Do You Think? (1 Viewer)

PHNOM PENH, Cambodia

Before Barack Obama and his team act on their talk about “labor standards,” I’d like to offer them a tour of the vast garbage dump here in Phnom Penh.

This is a Dante-like vision of hell. It’s a mountain of festering refuse, a half-hour hike across, emitting clouds of smoke from subterranean fires.

The miasma of toxic stink leaves you gasping, breezes batter you with filth, and even the rats look forlorn. Then the smoke parts and you come across a child ambling barefoot, searching for old plastic cups that recyclers will buy for five cents a pound. Many families actually live in shacks on this smokinggarbage.

Mr. Obama and the Democrats who favor labor standards in trade agreements mean well, for they intend to fight back at oppressive sweatshops abroad. But while it shocks Americans to hear it, the central challenge in the poorest countries is not that sweatshops exploit too many people, but that they don’t exploit enough.

Talk to these families in the dump, and a job in a sweatshop is a cherished dream, an escalator out of poverty, the kind of gauzy if probably unrealistic ambition that parents everywhere often have for their children.

“I’d love to get a job in a factory,” said Pim Srey Rath, a 19-year-old woman scavenging for plastic. “At least that work is in the shade. Here is where it’s hot.”

Another woman, Vath Sam Oeun, hopes her 10-year-old boy, scavenging beside her, grows up to get a factory job, partly because she has seen other children run over by garbage trucks. Her boy has never been to a doctor or a dentist, and last bathed when he was 2, so a sweatshop job by comparison would be far more pleasant and less dangerous.

I’m glad that many Americans are repulsed by the idea of importing products made by barely paid, barely legal workers in dangerous factories. Yet sweatshops are only a symptom of poverty, not a cause, and banning them closes off one route out of poverty. At a time of tremendous economic distress and protectionist pressures, there’s a special danger that tighter labor standards will be used as an excuse to curb trade.

When I defend sweatshops, people always ask me: But would you want to work in a sweatshop? No, of course not. But I would want even less to pull a rickshaw. In the hierarchy of jobs in poor countries, sweltering at a sewing machine isn’t the bottom.

My views on sweatshops are shaped by years living in East Asia, watching as living standards soared — including those in my wife’s ancestral village in southern China — because of sweatshop jobs.

Manufacturing is one sector that can provide millions of jobs. Yet sweatshops usually go not to the poorest nations but to better-off countries with more reliable electricity and ports.

I often hear the argument: Labor standards can improve wages and working conditions, without greatly affecting the eventual retail cost of goods. That’s true. But labor standards and “living wages” have a larger impact on production costs that companies are always trying to pare. The result is to push companies to operate more capital-intensive factories in better-off nations like Malaysia, rather than labor-intensive factories in poorer countries like Ghana or Cambodia.

Cambodia has, in fact, pursued an interesting experiment by working with factories to establish decent labor standards and wages. It’s a worthwhile idea, but one result of paying above-market wages is that those in charge of hiring often demand bribes — sometimes a month’s salary — in exchange for a job. In addition, these standards add to production costs, so some factories have closed because of the global economic crisis and the difficulty of competing internationally.

The best way to help people in the poorest countries isn’t to campaign against sweatshops but to promote manufacturing there. One of the best things America could do for Africa would be to strengthen our program to encourage African imports, called AGOA, and nudge Europe to match it.

Among people who work in development, many strongly believe (but few dare say very loudly) that one of the best hopes for the poorest countries would be to build their manufacturing industries. But global campaigns against sweatshops make that less likely.

Look, I know that Americans have a hard time accepting that sweatshops can help people. But take it from 13-year-old Neuo Chanthou, who earns a bit less than $1 a day scavenging in the dump. She’s wearing a “Playboy”shirt and hat that she found amid the filth, and she worries about her sister, who lost part of her hand when a garbage truck ran over her.

“It’s dirty, hot and smelly here,” she said wistfully. “A factory is better.”

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Joe Bryant said:

The problem I have with his argument is I understand the logic but it feels eerily similar to what one sometimes sees the person in power say to the person who's being badly mistreated in shaming them with "plenty of other people have it worse".

Whether it's the abusive husband who tells his battered wife she should be happy they have a nice home and there are women in the homeless shelter who'd be glad to switch places with her. 

Or slave masters who wanted to pat themselves on the back for having nicer slave housing than the "mean" slave owner who was even more cruel. 

At some point you know something is wrong. The fact it's less wrong than something else doesn't make it ok.

The fact a country has Dante like hell conditions for some people doesn't mean Nike gets credit because they just run a sweatshop. 

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Joe Bryant said:

The fact a country has Dante like hell conditions for some people doesn't mean Nike gets credit because they just run a sweatshop. 

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fatguyinalittlecoat said:

I voted "somewhat agree."  I think Kristof's position is clearly dictated by a basic understanding of economics if you take the world as it is.  But I couldn't vote "strongly agree" because I generally view multinational corporations as a very imperfect vehicle for lifting people out of poverty and making the world a better place.  I would greatly prefer it if the rich countries of the world (like the United States) substantially increased humanitarian aid that helped improve living conditions in the sorts of places Kristof is talking about.  I don't think it's particularly good for anyone if children in poor countries are toiling in factories rather than getting educated, especially if those factories are polluting where those children live.  And if the sweatshops are producing a bunch of crap that Westerners don't really need but they buy it anyway because it's just so cheap, that's a bad outcome too.  

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Maurile Tremblay said:

I don't think that should have prevented you from voting "strongly agree" because I doubt Kristof would be opposed to that.

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Maurile Tremblay said:

Nike isn't really looking for credit, I don't think. It's looking for profits.

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Joe Bryant said:

I think my biggest argument with Kristof is you could use the exact same logic in defending slavery. 

I've never been a big fan of the "Sure it's bad. But it could be worse" as a way to justify or defend what we know is still bad. 

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fatguyinalittlecoat said:

I don't think the logic works all that well in defending slavery.  If there was no slavery, the former slaves would, presumably, be better off.  If there were no sweatshops, the former sweatshop employees would be worse off.  That's the whole point of the article.

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fatguyinalittlecoat said:

Joe Bryant said:

I think my biggest argument with Kristof is you could use the exact same logic in defending slavery. 

I've never been a big fan of the "Sure it's bad. But it could be worse" as a way to justify or defend what we know is still bad. 

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I don't think the logic works all that well in defending slavery.  If there was no slavery, the former slaves would, presumably, be better off.  If there were no sweatshops, the former sweatshop employees would be worse off.  That's the whole point of the article.

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Joe Bryant said:

I've never been a big fan of the "Sure it's bad. But it could be worse" as a way to justify or defend what we know is still bad. 

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Maurile Tremblay said:

If the only choices are bad and worse, I think it's a mistake to favor worse.

"Treating slaves well is preferable to treating them poorly, so let's have slaves and treat them well" isn't acceptable when a third possibility -- ending the institution of slavery -- would make people better off.

With sweatshops, what's the third possibility? If ending the institution of sweatshops would make people worse off, what then?

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Joe Bryant said:

Maurile Tremblay said:

If the only choices are bad and worse, I think it's a mistake to favor worse.

"Treating slaves well is preferable to treating them poorly, so let's have slaves and treat them well" isn't acceptable when a third possibility -- ending the institution of slavery -- would make people better off.

With sweatshops, what's the third possibility? If ending the institution of sweatshops would make people worse off, what then?

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Who is favoring worse?

I'd say the third possibility is pay much better wages and have what we'd call good working conditions. 

I have a hard time believing profit margins on the Nike Shoes can't withstand paying decent wages. I get their goal is to make a profit. But at some point, enough is enough. 

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Joe Bryant said:

Who is favoring worse?

I'd say the third possibility is pay much better wages and have what we'd call good working conditions. 

I have a hard time believing profit margins on the Nike Shoes can't withstand paying decent wages. I get their goal is to make a profit. But at some point, enough is enough. 

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[scooter] said:

Sure, Nike could pay more to its overseas employees. But then it would experience a decrease in profits, which would lead to less money for investors and for Nike's American employees, which would lead to a smaller amount of money being pumped back into the American economy.

Also, it would allow Nike's competitors -- including ones that aren't based in America -- to capture market share by undercutting Nike's prices, which could lead to Nike losing its position as the #1 sports apparel brand, which could lead to thousands of Americans losing their jobs.

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NCCommish said:

Or we could institute policies that make all importers play on a level playing field. Here's the thing when workers rights are respected these factories can be a good thing. But when all they do is chase the next cheap place then they aren't.  And part of this problem is the whole idea that there is never enough profit that is driven by Wall Street. 

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Max Power said:

So why cant Nike pay $15 an hour for a living wage?

America seems to have a plan for this to work. Why not implement it globally?

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Arodin said:

Pay $15/hr to make shoes and ship them halfway around the world, vs. pay $15/hr and make them in our backyard and truck them to market.

It’s the low labor costs that make it feasible to produce in places with minimal infrastructure, far from the consumer markets at all.

So unless Nike can afford to engage in international charity and still stay in business, requiring them to pay living wages overseas may as well be the same as driving the workers back to the garbage dump.

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Joe Bryant said:

Who is favoring worse?

I'd say the third possibility is pay much better wages and have what we'd call good working conditions. 

I have a hard time believing profit margins on the Nike Shoes can't withstand paying decent wages. I get their goal is to make a profit. But at some point, enough is enough. 

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Maurile Tremblay said:

If every intervention we can think of would make things worse, then anyone calling for intervention is favoring worse.

How do you propose to get employers to pay much better wages and offer good working conditions? I don't see a way to force it that doesn't do more harm than good -- i.e., I don't see a way that isn't effectively favoring worse.

Take Cambodia. We could encourage Cambodia to pass minimum-wage legislation to protect its own workers. But then factories owned by international corporations would relocate from Cambodia to Mauritania. That wouldn't be good for Cambodians. (It would be good for Mauritanians, but only because it would give Mauritania its own set of sweatshops, so it doesn't solve the problem we're trying to solve.)

Or we could have the U.S. forbid importing goods assembled in factories that pay less than $5/hr or whatever. But then factories would relocate from Cambodia to Mexico, or maybe Ohio. That wouldn't be good for Cambodians, either. (If Americans want to benefit Ohioans at the expense of Cambodians, that's possibly a valid desire; but in that case let's not use concern for Cambodians' own good as a pretext.)

We could hope that Nike just voluntarily agrees to pay above-market wages to Cambodians. They can afford it, to an extent. But Nike has an unusually strong brand that allows it to make an above-average return on invested capital. Its own situation can't be generalized to all manufacturers with factories in Cambodia, many of which would end up having to close down if they tried to pay above-market wages. So that's not a robust strategy.

Also, when we're talking about companies voluntarily paying above-market wages, we're no longer in section (a) of the final paragraph of my previous post, but we're instead in section (c). Subsection (c) is great. I'm all for it, and I think Nike's shareholders should use some of their own dividends to make charitable donations to people in places like Cambodia. But that's really a separate conversation, and anyway I don't see why the burden of foreign aid should fall on Nike shareholders specifically rather than on U.S. taxpayers more generally.

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In the early 1990s, for example, the U.S. Congress considered legislation that would have imposed sanctions on corporations who benefit from child labor. The bill never got through Congress, but it did trigger enormous political pressure on such companies. One German company buckled under pressure from activists, and laid off 50,000 child garment workers in Bangladesh. The British charity group Oxfam later conducted a study on those 50,000 workers, and found that thousands of them later turned to prostitution, crime, or starved to death.

In 1995, anti-sweatshop activists persuaded Nike and Reebok to close down soccer-ball manufacturing plants in Pakistan to thwart planned protests during the 1998 World Cup. The closings laid off tens of thousands of Pakistanis. Additional activist-inspired closings laid off hundreds of thousands more. The UPI reports that the mean family income in Pakistan soon fell by more than 20 percent. In Tomas Larsson’s book "Race to the Top," University of Colorado economist Keith Maskus says the Pakistani child laborers who lost their jobs were later found begging, or getting bought and sold in international prostitution rings.

UNICEF reports that an international boycott of Nepal’s child-labor supported carpet industry in the 1990s forced thousands child laborers out of work. A large percentage of those child laborers were later found working in Nepal’s bustling sex trade.

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Joe Bryant said:

I don't think you can force them to pay above sweatshop wages. In general, I'd just like to see it. 

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Maurile Tremblay said:

If every intervention we can think of would make things worse, then anyone calling for intervention is favoring worse.

How do you propose to get employers to pay much better wages and offer good working conditions? I don't see a way to force it that doesn't do more harm than good -- i.e., I don't see a way that isn't effectively favoring worse.

Take Cambodia. We could encourage Cambodia to pass minimum-wage legislation to protect its own workers. But then factories owned by international corporations would relocate from Cambodia to Mauritania. That wouldn't be good for Cambodians. (It would be good for Mauritanians, but only because it would give Mauritania its own set of sweatshops, so it doesn't solve the problem we're trying to solve.)

Or we could have the U.S. forbid importing goods assembled in factories that pay less than $5/hr or whatever. But then factories would relocate from Cambodia to Mexico, or maybe Ohio. That wouldn't be good for Cambodians, either. (If Americans want to benefit Ohioans at the expense of Cambodians, that's possibly a valid desire; but in that case let's not use concern for Cambodians' own good as a pretext.)

We could hope that Nike just voluntarily agrees to pay above-market wages to Cambodians. They can afford it, to an extent. But Nike has an unusually strong brand that allows it to make an above-average return on invested capital. Its own situation can't be generalized to all manufacturers with factories in Cambodia, many of which would end up having to close down if they tried to pay above-market wages. So that's not a robust strategy.

Also, when we're talking about companies voluntarily paying above-market wages, we're no longer in section (a) of the final paragraph of my previous post, but we're instead in section (c). Subsection (c) is great. I'm all for it, and I think Nike's shareholders should use some of their own dividends to make charitable donations to people in places like Cambodia. But that's really a separate conversation, and anyway I don't see why the burden of foreign aid should fall on Nike shareholders specifically rather than on U.S. taxpayers more generally.

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Smack Tripper said:

What is your metric of “good” for these people?

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Max Power said:

Nike can afford it. They just put profit over people and that is their right. I just dont want to hear people say they are leading the way in corporate morality. 

This $15 hour minimum wage is going to sink smaller businesses in America. At the same Nike continues to exploit child labor to remain a multi billion dollar company.

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NCCommish said:

Here's another problem. At some point Cambodians say "hey prices are rising and I need a higher pay to maintain my buying power" Nike says " screw that we are moving to Mauritania". Rinse and repeat.

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Joe Bryant said:

Probably not slavery as an institution. But definitely the mistreating of people. Justifying one mistreating another by claiming others are so much worse off they'd be improving their position to move up to swap with the people you're mistreating. 

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fatguyinalittlecoat said:

I don't think the logic works all that well in defending slavery.  If there was no slavery, the former slaves would, presumably, be better off.  If there were no sweatshops, the former sweatshop employees would be worse off.  That's the whole point of the article.

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Joe Bryant said:

The problem I have with his argument is I understand the logic but it feels eerily similar to what one sometimes sees the person in power say to the person who's being badly mistreated in shaming them with "plenty of other people have it worse".

Whether it's the abusive husband who tells his battered wife she should be happy they have a nice home and there are women in the homeless shelter who'd be glad to switch places with her. 

Or slave masters who wanted to pat themselves on the back for having nicer slave housing than the "mean" slave owner who was even more cruel. 

At some point you know something is wrong. The fact it's less wrong than something else doesn't make it ok.

The fact a country has Dante like hell conditions for some people doesn't mean Nike gets credit because they just run a sweatshop. 

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jon_mx said:

Seems like the best thing to do would have some labeling which would certify the product was made with some minimum level of labor practices,

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msommer said:

That would enable the consumer to vote with his/her money. Some would. Many would not for various reasons such as lack of economic freedom and unawareness (willful or not).

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jon_mx said:

It would also guilty trip the major brands into action.    Right now it I see no evil hear no evil. 

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Joe Bryant said:

The fact a country has Dante like hell conditions for some people doesn't mean Nike gets credit because they just run a sweatshop. 

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Godsbrother said:

I don't think anyone is saying they should be earning $15/hour in a country like Cambodia or Bangla Desh.  But conditions in some of these factories are really, really bad and work week is way too many hours. 

I find it hard to believe that the corporations couldn't pay a little more in wages, reduce the work day a little, and improve the working conditions a bit.  There has to be a happy medium between profits and not exploiting poor people.

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