Tag Archives: sweatshop

Need for a Minimum Standard

In an earlier post I argued that sweatshop, a shop or factory in which employees work for long hours at low wages and under unhealthy conditions, is a better choice for folks in least develop and developing countries than no place to work at all. This is why, in general, workers there do not request high standard of working condition as their counterparts in developed world do. They adapt to some poor condition even though at the same time they are not well paid.

This situation attracts many major retailers in U.S. and other developed nations to massively relocate their productions abroad, such as to China, Vietnam, Bangladesh, Indonesia, and other countries with low labor cost. A figure said that more 97 percent of apparel and 98 percent of cloth sold in U.S. are imported while in 1960an, that figure is only 5 percent.

Developing world, home for the factories, benefits from this shift. Since in general the new industries are labor intensive, they have been creating a huge number of jobs.  In 1980s, the number of garment factories in Bangladesh is only hundreds while recently, that number reaches nearly 6000 factories.

However, the world was shocked by witnessing 1134 people dead and hundreds injured when the Rana Plaza building in Savar, Bangladesh collapsed last year.  This is just a problem among many other issues involving multinational companies searching for low cost labor.

While I argue that sweatshop is one solution for the poor in least developed and developing countries, but dangerous working condition is another issue. What I mean by dangerous is a situation where it may threaten life safety of the workers.  a minimum standard has to be set up to avoid such tragedy or other accident in a smaller case. Then, the question is who should be in charge of such rules. The industry itself is not a good choice for this responsibility since a player could not be a referee.

Leaving the task to the government to regulate is also not a guarantee since low labor cost is one of its comparative advantages. Imposing too many restrictions might cause its industry less competitive and it means that investors could easily move their productions to other countries with less strict regulations. Thus, a collective action should be taken to overcome this issue. In my opinion International Labour Organization (ILO) and World Trade Organization (WTO) are good candidates to take this responsibility given their credibility among parties involved.

Sweatshops or Jobless

It is interesting to discuss the low wage worker in developing countries and labor standard.  Can labor standard be enforced to what it should be like here in the U.S?

Enforcing labor standard in sweatshops too tightly is the same as trying to eliminate sweatshop itself. In other word, it is the same as to eliminate comparative advantage from developing world.  Nevertheless, factory audit like that is happening in Bangladesh right now might be a midpoint solution.

I strongly agree with Nicholas Kristof when he said in his rather old article Where Sweatshops Are a Dream: “The best way to help people in the poorest countries isn’t to campaign against sweatshops but to promote manufacturing there….”

I am not saying that tolerating labor standard in sweatshops means that they can abuse the minimum safety standard like that caused deadly factory tragedy in Bangladesh. What I want to say is that the labor standard in developing countries is not similar to that in developed countries. One situation that U.S. workers might consider unacceptable is not necessarily the case for Indonesian workers for instance.

The scavenging job example that Nicholas brings to convince his view in favor of sweatshops might be too dramatized, but in general it is the case in developing countries. Working situation in agricultural land for example, is not a lot better than his scavenging story.

In Java, most Indonesia’s populated island, young men and women from rural area have left their village just after graduating from high school or even  from middle school headed to cities to search for a job.  Working in Factories is among their destination. Some with less education find job as a nanny in a working-mother family for women and as a driver for men. Many others go to construction sites. Do not ask about labor standard to them. Job as a driver or a nanny in a household is far from regulated. As a nanny, often they have to work from early morning to late evening, seven days a week.

They simply accept those jobs since they do not have much choice. No promising jobs in villages, as they thought. Agriculture land has already shrunk. Most farmers have only less than a hectare land each. For sure, this job cannot be relied on to live. Others that do not own lands have to compete for few jobs from their neighbors.  Unfortunately, youths today are also not interested in this manual farming. Working in rice fields is dirty with mud, hot from sunshine, and also give little money.

Thus, working in a manufacturing factory in a city is much better for them compared to working in villages, working in an informal job in a city and certainly much better than unemployed. From this point, I think we should view this issue from the root of the problem and more importantly from developing world side rather than comparing it with the best practice in developed world directly.