Mr. Obama and the Democrats who favor labor standards in trade agreements mean well, for they intend to fight back at oppressive sweatshops abroad. But while it shocks Americans to hear it, the central challenge in the poorest countries is not that sweatshops exploit too many people, but that they don’t exploit enough.
"Conservatives" recite similar arguments in refutation of "liberal" denunciations of sweatshops. Kristoff's article continues:
Talk to these families in the dump, and a job in a sweatshop is a cherished dream, an escalator out of poverty, the kind of gauzy if probably unrealistic ambition that parents everywhere often have for their children.
“I’d love to get a job in a factory,” said Pim Srey Rath, a 19-year-old woman scavenging for plastic. “At least that work is in the shade. Here is where it’s hot.”
In her book NO LOGO: Taking Aim at the Brand Bullies, author Naoimi Klein reports on export processing zones (EPZs), a world wide array of sweatshops. In Rosario, the Phillipines:
Windowless workshops made of cheap plastic and aluminum siding are crammed in next to each other, only feet apart. Racks of time cards bake in the sun, making sure the maximum amount of work is extracted from each worker, the maximum number of working hours extracted from each day. The streets in the zone are eerily empty, and open doors - the ventilation system for most factories - reveal lines of young women hunched in silence over clamoring machines.
...The zone is a tax-free economy, sealed off from the local government of both town and province - a miniature military state inside a democracy.
Klein provides some historical perspective:
Though it has plenty in common with ... other tax havens, the export process zone is really in a class of its own. Less holding tank than sovereign territory, the EPZ is an area where goods don't just pass through but are actually manufactured, an area, furthermore, where there are no import and export duties, and often no income or property taxes either. The idea that EPZs could help Third World economies first gained currency in 1964 when the United Nations Economic and Social council adopted a resolution endorsing the zones as a means of promoting trace and developing nations. The idea didn't really get off the ground, however, until the early eighties when India introduced a five-year tax break for companies manufacturing in its low-wage zones.
Since then, the free-trade-zone industry has exploded... In total, the International Labor Organization says that there are at least 850 EPZs in the world ... spread through seventy countries and employing roughly 27 million workers...
Here's what it's like for EPZ workers:
Regardless of where the EPZs are located, the workers' stories have a certain mesmerizing sameness: the workday is long - fourteen hours in Sri Lanka, twelve hours in Indonesia, sixteen in Southern China, twelve in the Philipines. The vast majority of the workers are women, always young, always working for contractors or subcontractors from Korea, Taiwan or Hong Kong. The contractors are usually filling orders for companies based in the U.S., Britain, Japan, Germany or Canada. The management is military-style, the supervisors often abusive, the wages below subsistence and the work low-skill and tedious. As an economic model, today's export process zones have more in common with fast-food franchises than sustainable developments, so removed are they from the countries that host them. These pockets of pure industry hide behind a cloak of transience: the contracts come and go with little notice' the workers are predominantly migrants, far from home and with little connection to the city of province where zones are located; the work itself is short-term, often not renewed.
...
Fear pervades the zones. The governments are afraid of losing their foreign factories' the factories are afraid of losing their brand-name buyers; and the workers are afraid of losing their unstable jobs...
The theory behind EPZs is that they will attract foreign investor, who, if all goes well, will decide to stay in the country, and the zones' segregated assembly lines will turn into lasting development: technology, transfers and domestic industries. To lure the swallows into this clever trap, the governments of poor countries offer tax breaks, lax regulations and the services of a military willing and able to crush labor unrest. To sweeten the pot further, they put their own people on the auction block, falling over each other to offer up the lowest minimum wage, allowing workers to be paid less than the real cost of living.
...
The rationale goes something like this: of course companies must pay taxes and strictly abide by national laws, but just in this one case, on this one specific piece of land, for just a little while, an exception will be made - for the cause of future prosperity. The EPZs, therefore, exist within a kind of legal and economic set of brackets, apart from the rest of their countries ... the local police and municipal government have no right even to cross the threshold. The layers of blockades serve a dual purpose: to keep the hordes away from the costly good being manufactured inside the zone, but also, and perhaps more important, to shield the country from what is going on inside the zone.
Because such sweet deals have been laid out to entice the swallows, the barriers around the zone serve to reinforce the idea that what is happening inside is only temporary, or is not really happening at all
Kristoff theorizes some more:
I’m glad that many Americans are repulsed by the idea of importing products made by barely paid, barely legal workers in dangerous factories. Yet sweatshops are only a symptom of poverty, not a cause, and banning them closes off one route out of poverty. At a time of tremendous economic distress and protectionist pressures, there’s a special danger that tighter labor standards will be used as an excuse to curb trade.
Yet Naomi Klein reaches a different conclusion:
It is one of the zones' many cruel ironies that every incentive the governments throw in to attract the multinationals only reinforces the sense that the companies are economic tourists rather than long-term investors. It's a classic vicious cycle: in an attempt to alleviate poverty, the governments offer more and more incentives; but then the EPZs must be cordoned off like leper colonies, and the more they are cordoned off, the more the factories appear to exist in a world entirely separate from the host country, and outside the zone the poverty only grows more desperate.
Kristoff describes the Cambodian government's "interesting experiment" to work with factories to establish "decent labor standards and wages." Readers of his column are forced to guess at just what exactly decent labor standards (hours per day, overtime limits, days per week, perhaps) and decent wages are.
Cambodia has, in fact, pursued an interesting experiment by working with factories to establish decent labor standards and wages. It’s a worthwhile idea, but one result of paying above-market wages is that those in charge of hiring often demand bribes — sometimes a month’s salary — in exchange for a job. In addition, these standards add to production costs, so some factories have closed because of the global economic crisis and the difficulty of competing internationally.
Kristoff just really wants all of the global campaigners against sweatshops to just give the poorest countries of the world their best hope, and to stop all these oh so obviously successful global campaigns against sweatshops.
Among people who work in development, many strongly believe (but few dare say very loudly) that one of the best hopes for the poorest countries would be to build their manufacturing industries. But global campaigns against sweatshops make that less likely.
Kristoff's column might have been better if he had taken some time to interview some sweatshop workers, to find out truth there is to the dreams of 13-year-old Neuo Chanthou, that a factory (sweatshop) is better.
