These acts make certain articles imported into the United States duty and quota free. It seems that this makes it likely that more “sweatshops” will develop in these countries as a result. Although producing the items in the US can reduce the shipping and customs cost on these items, this cannot make up for the reduction in labor and occupancy costs in developing countries. By removing the duty due and creating a non-quota situation for imports from these countries, we are setting them up for a rise in the number of US companies using contractors to produce goods in these countries.
Some contractors are notorious for having extremely poor working conditions, including lack of basic human necessities such as potable water, restroom facilities, and the receipt of a “Living Wage”.
As the US puts trade agreements such as these into place, are we doing more harm than good to the citizens of these countries? Could they be better served by leaving duties and quotas in place, or would this lead to further abuses from US companies?
A sweatshop might seem like a bad deal to you but for them it is better than what they got (nothing). By creating jobs there the standard of living will rise and, eventually, salaries and working conditions will improve. denying them those jobs today is denying them the chance to develop.
Sailor: You’re starting to scare me. Not that I disagree with your argument, it’s more a case that I can see your point. As a point of interest though, do we let the sweatshops develop and count on time and market forces to improve the working conditions, or do we try and speed that process up a little?
Mate - If I knew that answer, I sure as hell wouldn’t be working in a call centre for health insurance - I’d be running the damn world!
I figure that sweatshops are generally found in poorer countries, making goods for the economically stronger countries. The latter must be able to put some sort of pressure on the former to change those conditions, even if this does result in an increase in the price of the goods. Alternatively, we can try and change the corporate practice of ridiculous amounts of money being paid to the higher end of the workforce, and the absolute mania for bottom line profits in favour of a more equitable treatment of staff throughout the organisation. If you want something more specific than that, I’m more than happy to give you an entire essay, but it’ll be somewhat of a tangent from the OP.
Not having a sufficiently developed economy con societal conditions create sweatshops. Not even building sweatshops will never allow an economy to develop, at least not to my understanding.
Sailor is correct. The alternative to sweatshop labour is that a lot of women in third world countries can instead go into prostitution to support their families, with the risk of AIDS and other diseases.
I have had this debate elsewhere, and someone pointed out that if a company was compelled to pay its sweatshop employees more, then this would cause massive inflation in the region around the sweatshop. Those not working for the sweatshop wouldn’t be able to afford food.
This doesn’t obviate a desire to have such companies invest in the infrastructure of the community whose workers are employed by the sweatshop, by sinking wells, establishing schools and hospitals and the like.
An interesting book I am reading at the moment is called ‘When Good Companies Do Bad Things’ by Peter Schwartz and Blair Gibb. It gets stuck into Nike, but also gives examples of responsible companies helping communities in third world countries.
Enough of this pro sweatshop bullshit. We are not talking about buying clothes from some Burmese corner store. The term ‘sweatshop’ refers to the horrid conditions that the workers are subjected to. Not pleasant. Do not confuse “taking advantage of a favorable exchange rate” with “sweatshop”. No benfits, below subsitance wages and forced overtime with no pay and Armed guards. Don’t like it? Lose your job. All because multinational companies can force the local governments to look the other way for fear of losing their business (which usually generates no or very little revenue for the country anyways).
I’m not saying go into a nation and start paying everybody in your factory $50US per hour. Is using cheaper labor ok? Yes. Is it good for developing nations? Yes. Is forcing people to take pregnancy tests and then firing them because of the loss of productivity pregnancy brings ok? No. Is petioning the governments in Indonesia or Mexico or wherever for “exemptions” from minimum wage requirements ok? No. Sweatshops=shitty life. Period.
Trade agreements and corporate agendas make the use of less expensive foreign labour inevitable under the curent ‘profit-or-perish’ economic climate. Fair enough. But for a corporation (or more often it’s contracted company)to make working conditions downright hazardous and inhumane is not right.
The only good things about sweatshops is that it isn’t you or your kids working in them. Want more? I’ll see you in the pit.
My point is directed to those people who think that those people should be paid at levels comparable with Western workers. That’s unrealistic.
Responsible corporations have made a difference, in places on the Indian sub-continent. I don’t have my book to hand, otherwise I’d give you an example.
kylen, you have correctly illustrated the difference between third world factories, and sweatshops.
Ok, I can’t see this, because I work for a clothing manufacturer. The problems with this scenario is that, if it becomes more expensive in, say, Guatemala and less expensive in Ghana to produce these items, goods are simply placed for production in Ghana instead of Guatemala. The contractors that produce in these countries must do everything within their power to keep production costs low, and even then there are factors beyond their control, such as these trade agreements. It is very easy to switch production between contractors and countries. Is there any concern for the employees left without jobs because of this? Not at all.
This has been a debate in my department recently. There are multiple reasons for pregnancy testing of employees. When thse tests are used to discriminate in hiring or terminate employees because they are pregnant, then they are used incorrectly. If the tests are used to ensure that the employee is not placed in a work situation that is hazardous to the employee and/or receives the full benefits that she is entitled to under the law, and nothing else, the tests are being used for the reason these countries allows them to be performed before hiring. Is it usual that these tests are only used for this reason? No.
If it were THAT easy to move production, every job in the world would be in Mozambique (the poorest country in the world, where you can pay the lowest wage.)
The problem with your reasoning here is that the difference in production cost between Ghana and Mozambique would have to be quite substantial to bother moving production. Even if you’re switching contractors rather than constructing a factory, there are considerable expenses involved.
Isn’t that true of contractors HERE? Are people in Ghana less moral and ethical than people here?
I realize, of course, that Ghana has fewer laws in place than we do to protect workers. We can afford that sort of thing; they can’t. But that said, there must be something to having a factory somewhere other than Mozambique, because there aren’t many factories in Mozambique.
To add to rickjay’s post, I’d also like to say that even if a company does leave due to cheaper labor, unless it is a one-trick town the reason labor costs went up is because they got a better standard of living there. You’ve now got a growing economy with a bunch of semi-skilled, already trained laborers.
Secondly, what’s the bigger problem: that sweatshops showed up, or that they left? They can’t both be bad.
Was there any concern that you wanted to (general you, here) shut those sweatshops down because of their “horrid” conditions? Either way, these people are out of a job.
Ok, I’m going to quit lurking just for a little while I feel pretty strongly on this subject, and although I know there are no easy solutions I think that things need to be changed and soon.
Factories to create clothing etc for developed countries have a place in developing countries. Their economies are in a sorry state and in my opinion developed countries should do their bit to help in any way they can, and why not… they get a great deal out of it, Contractors will manage your workforce which will work for wages much lower than in the developed country, and the workers get a living wage. But my beef is with companies which abuse this arrangement solely for insane profits. There is no need to force overtime and bad working conditions on the workers, they are willing to work. There is plenty of profit to be made without bad working conditions, but companies allow mistreatment of people to get the largest profit humanly possible.
RickJay - It is my finding that clothing manufacturers do find it very easy to move locations, and do so regularly. From what I have heard of Nike they consistantly move factories to the very cheapest locations. And since they use only contractors to produce their footware they don’t need to move equipment just change contractors, and of course just go with the lowest bidder…
I think that people have a point that factories going to developing countries do have a positive impact on the country (until they leave…) but there is no reason to have sweatshops. Plenty of companies have managed to get profit quite successfully with having labour in the developed world along with large wages and benefits.
Anyway that my 2cents. Back to lurking
I don’t think anyone disagrees with this, but the solution that’s constantly suggested is that Western businesses should not be allowed to set up shop there. Remember that Lsura’s initial assertion was that the absence of duties would make sweatshops likely.
Well, that’s wrong. The absence of duties makes it inevitable that some manufacturing will occur overseas. Whether those facilities try their best to provide a decent working environment, or whether they’re sweatshops (or, in China et al., concentration camps) is up to thsoe countries and is a matter that, frankly, should be handled by the government of that country. I can certainly get behind the West boycotting a country that openly uses slave labour, but at some point we have to hand it off to the governments of Ghana and Mozambique to set up their own labour protection laws. That’s their job.
Ultimately, the only way Ghana is going to haul itself out of the economic gutter, so to speak, is to start producing something at a profit. The best opportunity for them to do this is by producing something that people want to buy, and are capable of buying. We can provide them that opportunity by opening our markets to Ghanan products. In cases where a country is obviously an enemy state or using slaves or something, I can see tariffs or sanctions, but for the most part I think the Third World needs an honest chance to make a buck.
Actually my clients tell me it is easy to move factories. If you are Tommy Hilfinger (which actually produces none of its own clothing - it is all manufactured by other companies) you send the pattern, design and logos to a factory in, say, China. If the factory ups its price, or if currency fluctuations cut into your profits, then you place your next order with a different factory in, say, Thailand. The only disincentive is that the first company has all of your logos and patterns and might start manufacturing genuine, but unauthorised clothing. Which is a good reason why fashion changes from season to season.
Okay, based on the definitions earlier, I think we all agree that slave-like sweatshops are a bad thing. I live in China, and the Chinese government thinks that they are a bad thing and cracks down hard on the practice.
I know a lot of trading companies here in China that source product for global clients. Some own their own factories. Ultimately, it’s the consumer and the home corporation that drives the practice. Some companies are very above board that they will not tolerate below a certain level among the contract factories. This has increased in the past few years. Trading companies are creating positions of contract factory managers that actually do inspections and try to improve standards where necessary owing to increasing demand from the US companies.
There has been an inprovement in at least some factories in China owing to external pressure. But it means that prices will rise.
True enough. However, the experience of the Asian tiger economies shows that when countries invest earnings (taxes) from low-skilled, low-pay industries into education and infrastructure, they move up the industrial food chain into the production of higher value-added goods that require more skill to produce. Note Tawain’s move over the past 30-odd years from sweatshops to electronics.
One more thing - you can’t blame sweatshops on trade deals. They existed long before the WTO or NAFTA or whathaveyou.
Yes, they can. sailor makes it sound like the people who lived there did absolutely nothing before the sweatshop showed up. One would think they were naked and ate dirt. Of course that’s not true. The people had a (primitive) economy, grew subsistence crops, had a culture, and all sorts of other things. These things are generally crippled by the impact the sweatshop makes. The sweatshop replaces some of the old ways with new ones, certainly, so although it’s a loss it’s not a total disaster. But when the sweatshop leaves there’s no going back to the old ways. So both getting a sweatshop and losing it creates problems.
I feel pretty strongly on this subject, and although I know there are no easy solutions I think that things need to be changed and soon.