An article in today's New York Times about workers sickened by n-hexane -- a potent neurotoxin used in Chinese manufacturing plants that produce iPhone components for Apple -- underscores the questions raised in my piece called "A Great Leap Backward" posted yesterday on The Pump Handle.
Seeking to lower production costs and boost per dollar productivity, U.S. companies have routinely sought locations with lower wages and less stringent environmental and occupational health and safety regulations. This has been true for some time, but now House Republicans are pushing to rollback standards ostensibly to make us more competitive with China. As we listen to these arguments, it's worth considering what environmental and working conditions in China actually are.
During the weeks of February 7 and 14 -- in the run-up to the February 19 vote on the FY2011 budget bill -- the House Education and Workforce, Energy and Commerce, Judiciary, Oversight, and Rules Committees held hearings to examine how environmental and workplace safety regulations impact job creation.
While watching these hearings, I've thought about what I've learned about and seen of the working and environmental conditions in places that are now the hub of world manufacturing. I've been picturing the smog that hangs over Chinese cities. I've been thinking about the fatal despair of young high-tech workers at Foxconn and Samsung factories in China and South Korea, about the depressed wages and severe working conditions at factories in the Philippines, and about the electronics workers I met in Indonesia this past fall who overflowed with questions about the health effects of their working conditions.
The House Republicans' premise is that the regulations created to implement current United States environmental and occupational health standards are costly impediments to job and business growth, and prevent the U.S. from fully competing as a manufacturing power in the global economy. These regulations, say Republican House members and witnesses representing business associations and manufacturing companies, have caused the U.S. to lose jobs to foreign countries, particularly to developing Asian nations, like China. Without such regulatory obligations, these speakers imply, domestic manufacturing could be booming.
Michael Friedrich, president of a Wisconsin company called MCM Composites, gave this assessment in testimony before the Oversight Committee on February 10th:
We cannot compete on labor costs... The total cost of production labor (hourly wage plus health care, payroll taxes, unemployment compensation, etc) in China, India, East Asia, and Mexico is only a fraction of the cost in the US. What costs $30 per hour to produce in the U.S. costs $15 per hour in East Asia and $5.00 in Mexico. The only way we can compete - and we can compete - in the world economy is through higher productivity coupled with lower overhead burden. The current burden includes the compliance costs of federal regulations, and with the threat of additional burden the U.S. is moving entirely in the wrong direction.
By contrast, Democratic members and witnesses from academic institutions, NGOs and some businesses maintain that government regulations that safeguard occupational, environmental, and public health result in net benefits (including financial benefits) that outweigh any upfront financial costs of implementation. (See University of Maryland law professor Rena Steinzor's testimony before the House Energy & Commerce Committee's Subcommittee on Environment and Economics.) They also maintain that these regulations and the standards they implement can produce and preserve jobs -- and are essential to basic public safety. "I defy you not to think about regulations the next time you get on a commuter airline or the next time you drink tap water in Chicago. Think about it in the morning when you have your eggs," said Representative Mike Quigley (D-IL) during a February 10th House Oversight and Government Reform Committee hearing.
The House Republicans' goal appears to be the removal of what they consider regulatory obstacles to industrial productivity -- the legally enforceable occupational and environmental safety standards designed to protect workers and the public from adverse health effects of industrial processes. Regulation by the Environmental Protection Agency to enforce air-quality standards and by the Occupational Safety and Health Administration to address workplace noise are among their targets.
Here's some recent news from China to bear in mind when considering what life is like in the absence of rigorous environmental and occupational safety standards two generations after The Great Leap Forward -- China's rapid industrialization campaign (led by Mao Zedong starting in the late 1950s) that did begin to transform the country from a rural agrarian to urban industrial society but at devastating human cost:
- In March 2010, the Chinese government reported that in the first two months of the year there had been 10,854 workplace fatalities (a decrease of 15.2 % from the previous year) and 63,552 workplace accidents. The official 2009 death toll from "work safety accidents" in China in 2009 was reported at 83,196. In 2009, 2,000 workers died in coal mine disasters, down from almost 7,000 in 2002, reports the Chinese news agency Xinhua. These large numbers of deaths translate into high fatality rates; for instance, in 2004 (the most recent year for which rates could be located), China's fatality rate per 100,000 workers was 10.8, while the US's was 4.1 (and the UK's was just 0.81).
- The International Labor Organization (ILO) estimates that 2.3 million people die each year in Asia from occupational accidents and work-related illnesses - or about 2 people every minute, according to figures from the Asia Resource Monitor Center. And it's well recognized that official occupational accident, illness and fatality numbers are likely incomplete given the large number of informal workers and problem of under-reporting, particularly of work-related illnesses.
- In July 2010, the Wall Street Journal reported that China was experiencing its worst air quality since 2005, resulting in part from a huge increase in particulate matter. The WSJ described the pollution as both a "drag on economic growth" and public health. That lack of environmental regulation can negatively impact industrial production is illustrated by the fact that on January 12, 2011, a leading Chinese steelmaker, Shougang Group, halted all its steel-making operations in Beijing to cut air pollution in the capital.
- A study published on February 8th in Environmental Health Perspectives by researchers from Oregon State University and Peking University shows that China emits the most polycyclic aromatic hydrocarbons (air pollutants that result from fuel combustion) of any country (followed by India and the U.S.). The study also indicates that at current levels of PAH pollution, Beijing - population 22 million - would see about 21,200 lifetime cases of lung cancer. If pollution controls adopted during the 2008 Olympics were maintained, the study says, that number would drop to 11,400. The researchers cite estimates that put annual heart disease and lung cancer deaths associated with air pollution in China at 300,000.
Thanks to implementation of the Clean Air Act and Occupational Safety and Health Act in 1970, hundreds of thousands of premature pollution-related deaths and thousands of work-related fatalities have been avoided. So the question policy-makers need to be asking as they consider the current attack on environmental, health and safety regulations is do we want to make a great leap backward?