Sweatshops: Sources of human rights abuse, or sources of economic development?
By
John Abell, Associate Professor of Economics (This article appeared in the R-MWC
Sundial on 3/18/02)
From a public relations perspective, the punishment inflicted upon the female workers at the Nike shoe factory in the city of Dong Nai, Vietnam, on March 8, 1997, could not have been more damaging. It was International Women’s Day, and a dozen or so helpless young women were being forced to run around and around the factory in the blazing mid-day sun. They were being punished for the bizarre reason of having worn the wrong shoes to work that day. Their punishment only stopped after they began collapsing from heat exhaustion. The current boycott of Nike products began as a result of this unfortunate incident.
On the other side
of the globe in El Salvador, 18-year old Judith Viera works for a Taiwanese maquiladora
assembly shop in the San Marcos Free Trade Zone. Her company is under contract
to produce shirts for The Gap, Eddie Bauer, J.C. Penny, and other retailers.
These companies are demanding. In order to stay price competitive back in the
United States, they must keep their production costs as low as possible, and
they want their orders filled quickly. If Judith’s company can’t meet their
demands, then the maquilas down the street, or the one in the next
country can. So Judith and her co-workers start their day at approximately 5:00
a.m. so that they can be on the shop floor by 7:00 a.m., where they will work
until 9:00 p.m. That is the Monday through Thursday schedule. Fridays, they work
7:00 a.m. until 4:00 a.m. They sleep on the factory floor for what’s left of
the evening and start work again on Saturday morning at 7:00 a.m. The week’s
work finally ceases that day at 5:00 p.m. That adds up to an 87-hour workweek,
for which she and her friends get paid $43.00. Try the math yourself. You’ll
discover that Judith receives less than $.50 per hour.
Judith reports that
the supervisors constantly scream at the workers—mostly females under age
30—and slap them with the shirts that they are stitching in an effort to
exhort them to work faster. During their 14-hour workday, they are permitted to
go to the bathroom twice. They must get a bathroom ticket from their supervisor
and are allowed no more than five minutes per trip. Judith tells of a friend who
was feeling sick and went to see the plant’s doctor, who, unbeknownst to her
friend, diagnosed her as being pregnant. He prescribed some pills that he
claimed would make her feel better. What they turned out to be, also unbeknownst
to her friend, were abortion pills. The philosophy that underlies this unethical
medical procedure is that it is costly for the company to have to meet all the
rules about neo-natal medical care and leave of absence that are required by
law. It is easier to simply eliminate the pregnancy.
Perhaps you’ve
read of student protests and boycotts at colleges all across the country
demanding that their bookstores and athletic teams refuse to buy clothing and
shoes made under sweatshop conditions. These actions are an extension of a
broader set of protests against the IMF, World Bank, and the WTO. Judith’s
story, and the story of the women at the Nike plant in Vietnam, are just two out
of thousands of similar stories from the seamy world of sweatshop production
that have motivated such protests. Some of the protesters are convinced that the
free trade policies advocated by the IMF, World Bank and WTO have set in motion
a "race to the bottom" among countries competing with one another for
the privilege of having these export assembly shops locate in their cities.
When Corazon Aquino
of the Philippines visited R-MWC a few years back to receive her Pearl Buck
Award, I had an opportunity to ask her opinion of this race to the bottom and
how it might contribute to long-term economic development. She bluntly admitted
that her country was explicitly pursuing wage-related policies to ensure that
foreign corporations would view its labor force as the most affordable in the
region.
To many, the idea
that under-paying your workers will somehow lead to their eventual benefit seems
ludicrous. However, most developing countries have a variety of reasons to
behave exactly as Ms. Aquino recommends. Most are desperately poor, they have
burdensome external debts, they have vast pools of unemployed workers, and some
may even have rumblings of revolution amidst a disgruntled, landless population.
Under such circumstances a free trade zone full of low-wage maquiladoras
on the outskirts of town looks like a win-win solution. Many economists, in
fact, see this approach as the first step toward long-run economic development.
Take the case of
Mexico. By opening its doors to free trade and foreign maquiladoras, as
economic theory suggests, Mexican companies will be forced to become more
competitive (read: keeping their wages as low as possible). Furthermore, they
will have no choice but to become more productive and to improve the quality of
their products, or else lose out in the competitive wars with foreign producers.
As the desirability of Mexican products grows over time, companies located in
Mexico will need more labor. That increase in labor demand will, in turn, pull
up Mexican wages and eventually improve standards of living for the entire
country.
Critics point out
that such improvements may happen in the very long run, but only after thousands
and thousands of unemployed Mexicans have been absorbed into the system. In the
meanwhile, there is a steady stream of desperate men and women moving to the
U.S. border region where the maquilas are located, willing to work for
less than $.50 per hour under intolerable conditions. The critics also point out
that if Mexican workers raise too much of a ruckus about their pay or working
conditions, the maquila owners won’t hesitate to relocate to the
Philippines or any of a host of other countries where the pay and conditions are
that much worse.
The economist Paul
Krugman states that, "bad jobs at bad wages are better than no jobs at
all." He admits that the conditions workers are expected to endure are
"terrible," yet he is convinced that export-led economic growth is the
only answer to the ills of most countries. Alternatives such as foreign aid will
not be forthcoming in sufficient amounts, he argues, and even if it were, it
typically leads to permanent dependency upon the part of the recipient country.
Krugman even acknowledges that foreign governments should "provide more
social justice" for their own citizens, but assumes they won’t, and will
not be coerced to do so.
Notice that by
casting the argument in this manner—that the choices are either export-led
growth or non-existent foreign aid—Krugman and other free traders have stacked
the debating odds in their favor. Well, if you would allow me to offer a
contrarian viewpoint, I maintain that the right questions aren’t even being
asked. There are deeper issues here than worker pay and conditions on the job. I
find it troublesome that no one is asking why it is the case that there
are so many desperately poor and unemployed workers in these countries in need
of maquila jobs.
In my opinion, the
issue is not only about jobs and wages, but also about land, access to the means
of production, and human rights. In most of the countries where the sweatshops
are located, their societies have traditionally been rooted in agriculture. Over
the centuries, though, foreign conquest and colonial occupation forced most of
the indigenous populations off of their ancestral lands to make way for cash
crop production.
Independence and
enlightenment, unfortunately, didn’t alter the skewed land holding patterns.
It is still the case today, in countries like Guatemala and El Salvador, that 2%
of the wealthiest individuals in society own 80% of all arable land, dictate
terms of credit, and control the functioning of markets. This same 2% can still
count on the military and a corrupt judicial system to operate with impunity on
their behalf to maintain this imbalance.
Under such
conditions, the landless poor have no choice but to line up at the maquiladora
employment office, cap in hand, hoping for a $.50 per hour, 87 hour per week
job. Nobody questions this arrangement though. Discussions of agrarian reform
are dismissed as communist leftovers from the Cold War.
I maintain that
these issues should be at the forefront of the debate, and that to assume, as
Paul Krugman does, that social justice is not possible in these poor countries,
is to operate from the "ostrich head in the sand" position. His view,
that these countries cannot be coerced into improving conditions for their
populations, simply ignores the realities of international politics.
I would like to
respectfully point out that these countries allow themselves to be coerced all
the time. They have fallen all over themselves in the past to do whatever the
IMF and World Bank asked of them in order to receive loans. Privatize? They’ve
done that. Eliminate food subsidies? They’ve done that. Drop the one-party
political system? They’ve done that. Devalue their currencies? They’ve done
that too.
What if the World
Bank and IMF instead demanded that these countries address problems of abuse in
the workplace before they ever receive another loan? Or Human rights violations?
Or Women’s rights? Or Indigenous rights? Or Agrarian reform? Or Corruption in
government? My guess is that most of these countries, desperate for financial
assistance, would continue falling all over themselves to please the
multi-lateral lenders, doing whatever is asked of them.
Let’s suppose
that you have stayed with me thus far and concluded that you want to err on the
side of activism. The question you should be asking at this point is whether or
not protests and boycotts can be effective in bringing about change. The answer
is, sometimes. Perhaps you heard of the McDonalds boycott in the mid-1990s over
the issue of Styrofoam packaging? The boycotters quickly carried the day as
McDonalds shareholders panicked and voted to eliminate the offending packaging!
In this case, the boycott victory was clear and verifiable—the offending
Styrofoam packaging simply disappeared.
There was another
issue, though in that boycott that has yet to be resolved: the clear-cutting
of rain forest land for the grazing of beef cattle. This remains a major concern
of the boycotters despite denials of this practice by McDonalds. This highlights
a problem associated with boycotts. How do you know when to stop, in the absence
of clear signals such as the disappearance of Styrofoam packaging?
Unfortunately, the only answers here are education and activism.
Also, until your
protests convince the IMF, World Bank, and WTO to address the deeper issues of
land, access to the means of production, and human rights that were mentioned
above, you need to be a conscientious and careful boycotter. The goal should not
be to put the various companies out of business. This would not serve the
interests of the workers that you wish to help. You simply need to demand that
the offending companies alter their policies and that you will resume your
consumption of their products only after they do so. Also, after careful
research on the issue, suppose, hypothetically, that you choose to purchase hemp
jeans from EarthHemp.com, rather than blue jeans from Polo Ralph Lauren. You
should do Mr. Lauren the favor of letting him know why you chose to not
buy his product—otherwise, how will he know that you’re not pleased with the
behavior of his company?
If you would like
to learn more about these issues, some simple key word Internet searches, such
as “sweatshops,” “Nike Boycott,” or “McDonalds Boycott” will get you
started.
The following websites provide a good start into the
complexities of this issue. The first two bring you up to date on the Nike
boycott, with views from both the protesters and the company:
http://www.globalexchange.org/economy/corporations/nike/stillwaiting.html
http://www.nikebiz.com/labor/index.shtml
http://www.globalexchange.org/economy/corporations/campus/update.html
http://www.sweatshops.org/
http://www.responsibleshopper.org/
http://www.blank.org/sweatgear/ss.html
http://web.mit.edu/krugman/www/smokey.html
http://www.icftu.org/focus.asp?Issue=childlabour&Language=EN
http://www.oneworld.net/guides/land_rights/front.shtml
http://www.mcdonalds.com/countries/usa/community/environ/info/rainforest/index.html