Green Edge 12: Sweatshops Don't Make Sense

2009-01-16-20080829TheGreenEdgecrpd4.jpgNicholas 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.)