Politics from the Palouse to Puget Sound

Tuesday, February 27, 2007

Sweatin' to the Lefties

Here are some facts about "sweatshops" I guarantee were not discussed at last night's PARD panel discussion.

Dr. Pranab Bardhan, an economics professor at the University of California, Berkeley, wrote in the April 2006 edition of Scientific American:
Global market competition in general rewards people with initiative, skills, information and entrepreneurship in all countries. Poor people everywhere are handicapped by their lack of access to capital and opportunities to learn new skills. Workers in some developing countries--say, Mexico--are losing their jobs in labor-intensive manufacturing to their counterparts in Asia. At the same time, foreign investment has also brought new jobs. Overall, the effect appears to be a net improvement. In Mexico, low-wage poverty is declining in the regions that are more involved in the international economy than others--even controlling for the fact that skilled and enterprising people migrate to those regions, improving incomes there independently of what globalization accomplishes. A recent study by Gordon H. Hanson of the University of California, San Diego, which took into account only people born in a particular region (thus leaving out migrants), found that during the 1990s average incomes in the Mexican states most affected by globalization increased 10 percent more than those least affected.

In poor Asian economies, such as Bangladesh, Vietnam and Cambodia, large numbers of women now have work in garment export factories. Their wages are low by world standards but much higher than they would earn in alternative occupations. Advocates who worry about exploitative sweatshops have to appreciate the relative improvement in these women's conditions and status. An Oxfam report in 2002 quoted Rahana Chaudhuri, a 23-year-old mother working in the garment industry in Bangladesh:

This job is hard--and we are not treated fairly. The managers do not respect us women. But life is much harder for those working outside. Back in my village, I would have less money. Outside of the factories, people selling things in the street or carrying bricks on building sites earn less than we do. There are few other options. Of course, I want better conditions. But for me this job means that my children will have enough to eat and that their lives can improve.

In 2001 Naila Kabeer of the University of Sussex in England and Simeen Mahmud of the Bangladesh Institute of Development Studies did a survey of 1,322 women workers in Dhaka. They discovered that the average monthly income of workers in garment-export factories was 86 percent above that of other wage workers living in the same slum neighborhoods.

Another indication of this relative improvement can be gauged by what happens when such opportunities disappear. In 1993, anticipating a U.S. ban on imports of products made using child labor, the garment industry in Bangladesh dismissed an estimated 50,000 children. UNICEF and local aid groups investigated what happened to them. About 10,000 children went back to school, but the rest ended up in much inferior occupations, including stone breaking and child prostitution. That does not excuse the appalling working conditions in the sweatshops, let alone the cases of forced or unsafe labor, but advocates must recognize the severely limited existing opportunities for the poor and the possible unintended consequences of "fair trade" policies.
Dr. Richard Vedder, distinguished professor of Economics at Ohio University writes in his new book, The Wal-Mart Revolution:
Generally, critics claim that companies in the developed world purchase goods in developing nations from firms that engage in sub-standard labor practices. For example, there are claims of exploitation of labor and of women, who are forced to work in "sweatshops." The critics allege that these manufacturing activities increase income inequality, both within the producing nations and in comparison with more developed nations. Moreover, they claim that the factories that produce goods for the big-box stores drive down wages in their home countries. In sum, it is often heard that the developing-world companies, including big-box retailers, are participating in a global "rqce to the bottom," through their international purchasing practices.

This grossly inaccurate characterization of employees in low-cost countries as being paid "slave wages" and forced to work long hours is an exaggerated and emotionally loaded use of very serious terms denoting a labor condition - slavery - which the world has worked hard to eliminate.

Forced labor is illegal in virtually all nations of thr world. The employees who work at low-cost manufacturing plants in China, Indonesia, India and elsewhere are not forced to work there. They have freely taken their jobs, principally because they are the best on offer. The alternative for such is not a better-paying job. It is, rather a job that pays less or no job at all. Thus, manufacturing employees in China, Indonesia, India and elsewhere are better off for being employeed by contractors to General Motors, Carrefour, Wal-Mart, IKEA, and the like. If they were not, they would not work in the factories. It would, of course, be preferable for them to work in the safer, cleaner, and more comfortable environments typical of American or Western European factories. However, forcing such standards on weak economies would destroy the very jobs that provide the best present hope for economic advancement, simply because productivity levels are so low there.

The American "sweatshops" of the early nineteenth century created much capital formation, much innovation, and much wealth that helped propel America through its Industrial Revolution and beyond. Later on, wages got relatively high in New England, and the industry migrated to the American South, and then to Japan, then to Southeast Asia, and now to South Asia - as history repeats itself and the so-called sweatshops are incubators of prosperity.
So why all the brouhaha? Robert W. Tracinski cut right to the chase in a September 6, 2003 article in Capitalism Magazine:
Well-off American college students and $25 per hour union workers have banded together in a growing movement for what they describe as a "progressive" cause and a battle against "exploitation." Their goal: to take away economic opportunities from desperately poor people in the Third World.

This is the vicious contradiction behind the recent campaign against so-called "sweatshops": The "progressives" scream loudly about "workers' rights" -- but their actual goal is to deprive poor people in the Third World of their right to work.

The first mark of a dishonest campaign is a refusal to define its terms. Campus activists use the term "sweatshop" as a catchphrase to rouse the hearer's emotions, but not to convey information. And to the extent they do explain the term, notice that they package together real, concrete violations of individual rights -- such as forced labor -- with such minor charges as not providing enough bathrooms for workers.

And that brings us to the second mark of a dishonest campaign: the refusal to mention facts that don't fit one's prejudice.

Why all the outrage, then, from the "progressives"? The anti-"sweatshop" campaign is driven, not by concern for Third World workers, but by hatred for American corporations. The activists' real complaint is that Third World factories are run for the purpose of making profits and not as a form of foreign aid. Wages, in their view, should not be set by the free market or by the requirements of investors and business owners. Instead, wages should be a kind of subsidy paid by American corporations as a welfare payment to the Third World.

The activists' campaign is driven by the dogma that anything motivated by self-interest is inherently evil -- no matter what the actual facts. In service to this dogma, any benefits gained by workers from industrialization and "global capitalism" must be ignored, rejected, and eventually outlawed -- even if it means more poverty for those whom the "progressives" allegedly want to protect. This scam should be unmasked and this anti-capitalist dogma rejected. It should be done in the name of American corporations, who have a right to profit from inexpensive goods freely produced in the Third World. And it should be done in the name of the workers in these factories, who have a right to improve their lives by seizing the economic opportunities offered to them.
Well-off American college students and $25 per hour union workers? You be the judge.

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