Green Edge 12: Sweatshops Don't Make Sense

Nicholas Kristof sure got my goat yesterday by starting his column with this: "What the world's most impoverished people need isn't fewer sweatshops, but more of them."

Why does a kind-hearted person like Kristof say something that sounds so mean? Because based on his years in Asia he concludes that many sweatshops offer better jobs than slumdog scavenging, and Kristof seems convinced that attempting to improve the lot of workers in developing countries will make their factories uncompetitive. He accepts that factories with decent working conditions are better places to work than sweatshops, but he is afraid that the good factories will hire too few children who need jobs.

But consumers are smart enough to prefer buying products from factories that don't abuse their workers. If factory owners don't mind mistreating the workers they see, how little must they care about the consumers whom they expect never to see?

Good working conditions are better not just for workers but for owners, their local communities and consumers. The tainted milk in China that made hundreds of thousands of consumers sick, and killed some infants, came from lawless factories.

So it makes absolute sense that consumers should be willing to pay more, as studies show they are, for products from high-standard factories and farms, certified to the SA8000 decent work standard or to FairTrade or Ethical Trading standards. Europe is far ahead of the United States in making these connections. In a British airport or train station or High Street, just try to find coffee that is not branded as ethically traded.

The reason consumers are willing to pay more for products from certified factories is not just that they feel good about doing something for a fellow worker. They also know deep down that well- treated workers are more likely to produce safe and defect-free goods. The bonding goes both ways.

Kristof's reasoning seems to be that President-elect Obama's interest in imposing minimum labor standards on developing countries must be a payoff for U.S. union support. The higher standards will force up labor costs and prices, and cost-conscious multinationals will reduce their orders from the lowest-wage developing countries. Kristof fears, in a nutshell, that the anti-sweatshop cause is about to be used as a smokescreen for protectionist U.S. trade policies.

But Obama has yet to take office. We have one more workday to wait. His campaign promise was to "fight for a trade policy that opens up foreign markets to support good American jobs [and] spread[s] good labor and environmental standards around the world." It's too soon to dismiss this promise of higher labor and environmental standards as a protectionist ploy.

Fact is, factory jobs are being lost by the thousands both in the United States and overseas because of the harsh realities of unprecedented asset deflation. With half the value of their stock investments evaporated, and one-fourth of their homes under water (i.e., worth less than the mortgage outstanding), Americans have stopped being the world's consumers of last resort.

Until we have good reason to see it differently, why can't we read Obama's trade-policy promise as a commitment to strengthen our long-term supply chains for workers and consumers by
- encouraging voluntary ethical trading, labor standards and environmental standards within the United States and overseas,
- recognizing leading social responsibility initiatives among corporations, including incentives to suppliers to raise the working conditions in their factories, farm and stores,
- asking the governments of developing countries to do more to enforce their own local labor laws, and offering assistance to them through USAID and DOL to do so, and
- rewarding governments that make an effort to improve their labor laws and enforcement.

Higher labor standards should not be seen just as a cost burden. The standards are achieved through improved management systems that have great collateral benefits for owners. Better workplaces have higher retention and productivity rates, fewer product reject rates and better quality goods.

Higher standards protect jobs in workplaces where workers are respected. They also protect consumers who buy from them.

(Disclosure: John Tepper Marlin has been married for 37 years to Alice Tepper Marlin, President of Social Accountability International, which created the SA8000 labor standard.)

Comments

[KillTheMessenger]

Every rising nation starts with sweatshops. The US began with sweatshops. Oh, excuse me, the US began with real slavery. How fast we forget.

What is important is that rising nations build real factories for the kids of the people who have to work in sweatshops. And then they send the kids of those kids to Stanford and Harvard.

Look at Korea. Look at China. Look at Japan. Look at Vietnam. You helped destroy it, now they are rebuilding with sweatshops. Soon they will have high tech. And one day they will be one among many developed nations. But it takes the lives of a whole generation. That is the price.

[John Tepper Marlin - Huffpost Blogger]

1. Yes, some regulation is needed to ensure compliance with basic labor standards and human decency.
2. Yes, historically sweatshops have been around a long time.
3. But regulation is not a panacea. We imposed good financial regulations in 1933 that were gradually eroded, especially during the past decade.
4. There are fine labor laws in almost all developing countries. Laws against employing young children, for example. Trouble is, the laws are not enforced. The money for enforcement is not there and (yes) competition contributes to downward pressure on wages and labor standards.
5. We have learned a few things about workplaces that can shorten the sweatshop period in developing countries.
6. Factories that can improve working conditions, and show how the factory owner can benefit, can lead the way for other factories.
7. Much of the work of improving labor standards involves training workers and supervisors in management systems, which has great benefits for owners.
8. Consumers who care about sweatshops are trying to create the information that will link the factory to the retailer. This information will also reduce the problem for the consumer of tainted food and counterfeit medicines.

[DuganS1]

For many teenagers, which you call children, if they're not working their running the streets You can work in the US at age 14 by the way with a permit, or have a paper-route or mow lawns or shovel snow at an even younger age. I don't understand the comment about the "money not being there" in emerging market countries, as there is plenty of money for such regulations that I can tell. I think the issue is they don't want to because it keeps factories operating, unemployment down, and corporate earnings and further investment and government revenues up. I also don't understand the comment about "improving labor standards by training workers and supervisors in management systems"... This is un-skilled labor we're talking about. They come in and they work, and if they aren't efficient they are easily replaceable. Last, what does regulation of the financial markets have to do with labor conditions in emerging markets?? None that I can tell.

[KillTheMessenger]

I didn't say anything about regulations. I simply put sweatshops and slavery in a historical perspective. The US would be nowhere without either. And even today US labor regulations are some of the weakest in the developed world. So I wouldn't be too proud about them.

I find your point 5) somewhat interesting, maybe you can elaborate based on primary economic data?

6) is optimistic. Unless there is an economic incentive (which for most factories involved in chemical and waste producing operations does not exist because of simple laws of nature) we have to synthetically create an economic downside (e.g. by shutting polluters down for good).

I think you will find that most companies which are exploiting their employees are quite sophisticated and efficient in doing so. It's just that their goals are not what they should be. "management systems" are value neutral. They work for slave drivers just as well as for benefactors.

8) Consumers in general do not care and no amount of education so far has put a dent into that level of ignorance.

[Thermodynamics]

I think this post partially explains why we are in a financial meltdown. Here we have a professional economist and professor in MBA programs mixing together several different issues.

Only regulation works. Wall Street did not control itself. It self-destructed, driven by greed.

A. You can't guilt trip the public into making better choices.
1. Most don't even know where their bling comes from. Your macho American SUV can be full of little parts from all over Asia.
2. Most are amoral consumers (its a marketplace, much is fungible) and don't care.

B. The question, "Are sweatshops bad?" is very complex. Some manufacturers that have relocated to Asia used to have little non-union operations in the US Southeast. I guess those were American sweatshops. They weren't good jobs, but they were better than no job in those hayseed towns, where you could actually live on minimum wage. We can't all work at the 7-11.

My answer is regulate product quality levels (lead paint, etc) and stop sending production off-shore. We need the jobs.
We could enforce working condition regulations if the jobs were here.

See Sen. Fritz Hollings about keeping production in the US. -- VAT to be reimbursed for items exported, etc, as in Europe
http://www.huffingtonpost.com/sen-ernest-frederick-hollings/sobering-up_b_158498.html

[DuganS1]

"Some manufacturers that have relocated to Asia used to have little non-union operations in the US Southeast."

That's very true and many US manufacturers build facilities abroad to supply those foreign markets as costs are too in the US to export and be competitive there. Some US owned auto-parts, tire, and construction equipment manufacturing operations are serving both US and foreign markets.

As for Fritz Hollings, I wonder what he was saying when those "good high paying" textile/apparel (what he calls manufacturing) jobs were being shipped from high cost New England and the Midwest to his low cost home state of South Carolina? The fact that Hollings seems to over-look is that no one is going to invest in textile/apparel mills/facilities in S Carolna anymore because it's not profitable. It's simply a terrible business and US operations are generally uncompetitive. I think it's futile to try and reverse that 40 year long process of those industries dying in America.

[DuganS1]

Facilities that have their workers work more than 40 hour weeks/eight hour days or not having hour lunch breaks or a being at a work place that isn't perfectly clean does not equate to facility managers "abusing" or "mistreating" their workers. Nor does the example of facilities producing some bad milk mean the managers were "lawless." What the author in the article above doesn't understand is that nearly a billion people were taken out of poverty in the past decade because of increased trade and the global increase in factory jobs. Sure it makes sense to improve working conditions, but it doesn't if it means the factory has to shut down because it doesn't make money and all the workers are forced back into poverty.

[solace zhang]

To the above post- you obviously are highly ignorant about both social justice and poverty issues. Sweatshops in the developing and third world are basically slave labour, and highly detrimental to the environment. anyone who believes in human rights is inherently anti-sweatshop.
buy local.

[montestruc]

Refusal to buy from poor people who need the income more than anyone is "social justice"? Oh my, isn't that special.

I would think that buying the products of the labor of the poor is a way to help them out of poverty and allow them to keep their pride.

In any case pardon my ignorance and you might want to look at lower left corner of a post to look for the link to post a direct reply to a poster.

[montestruc]

People would not work in those "sweatshops" if doing something else that was better for them was available to to them. Poor working conditions are associated with the poverty of the societies that those "sweatshops" are located in, not with "heartless capitalists" or some other tired socialist platitudes.

Those "sweatshops" are a way out of the grinding poverty those people are in, much as the "sweatshops" in the USA in the late 19th and early 20th centuries were a way out of poverty for many in the USA during that era. The "higher standards" you mention are a function of the wealth of the society, and cannot be imposed by your decree. In fact refusing to buy from them tends to hold such people in poverty.