Bangladesh disasters highlight – humans should not be treated as throwaway machines.  Can we do something about this?

Reports say that U.S. retail companies who traffic in cheap commodities from Bangladesh have refused to help the families of the nearly 3000 garment workers who died or were injured in two major disasters during the last year.

The Tazreen fire (2012 Nov 24,  Dhakar Bangladesh) was the one with the locked emergency exit doors, apparently so that workers could not relieve calls from nature during their long work day. The Rana Plaza building collapse (2013 Apr 24, also Dhakar region) was of a factory using a in a building -built for light shopping and offices- as its work site for heavy vibrating equipment.  Help for those damaged in these disasters are our immediate topic, but the issues extend throughout the garment industry, from China to Bangladesh and farther.

Steven Greenhouse, NYT business reporter

The New York Times’ business reporter Steven Greenhouse reports that Primark (Irish) and C&A (Dutch-German) are engaged in making a long-term fund operational.  There are other customer firms negotiating to join the help (names not given in Wikipeida).  But, Walmart, Sears, Children’s place and most other US companies (clients of factories) refuse to come on board; but all claim they have important changes they are right now making – for the past year.  This topic makes for interesting reading.

Let’s not be naive.  If Walmark or Penny’s were to agree to support these families, would it not be an admission that they were complicit in exploiting people who are nearly slaves?  We should not expect to see any such voluntary statement.

Slave Labor – harsh words

Dov Charney, Founder of American Apparel, Inc.

Such words arise when discussing modern garment manufacturing strategies.

In an interview with Vice.com,  Dov Charney, founder and CEO of American Apparel, calls the people slave labor and their factories death-trap manufacturing.

AmApp sells clothing made by his factories in this country.  They provide pay checks 65% more than the minimum wage one gets with most menial labor jobs in America.

This LastTechAge discussion is not to condone American Apparel sales strategy nor Mr Charney.  Nowadays,  we are not even sure what “over-the-top” might mean.

But Charney’s products are made in the USA under to U.S. regulatory standards. American Apparel pays a wage above what we pay line workers in the Michigan Tier-2 Automotive supplier industry.  Charney is proud of his patriotic actions.

He has a good point.  U.S. EPA and OSHA regulations, along with better than minimum wages make our factories safer, better than any in Bangladesh, Indonesia, India, and certainly much better than the slave dorms in China filled with political prisoners.  (How can anyone compete in price against Chinese interests that use throw-away workers and ignore even customer product safety?)

But US companies purchase goods and exploit this pool of discardable labor.  Should they not pay the damaged workers some kind of compensation since their patronage surely propagates if not enhances problems.

Unpleasant reality.

Modern “first world” consumer society has become dependent on the ultra-cheap labor used to make its commodities.  We have closed down our own  resources in favor of cheap goods based on nearly unpaid workers.

To accept these cheap prices, American citizens have had to keep their eyes tightly shut. The alternative would have been The only alternative would have been storming the boardrooms between 1980 and 2000 when they used the ‘home run’ business strategy to make offshoring decisions.  We discussed home runs in other posts, too.

So, here in America, we all live the good life on the backs of working slaves.  This is so much counter to our self image that I plead – before criticizing, take the Disrobing Challenge given at the link site shown in previous paragraph.  <…back from the challenge…>  The Bangladeshi make $38/month = $456/year.    Apple iPhones are no cheaper there than here and those people do not live like 3rd world kings.  Real slaves would make $0, but makers of our garment are really close to this.

There is a spin on the economic events of the last 30 years:

We close manufacturing so that all the intellectual development work can be focused here.  Since this is true, everyone must take an advanced degree to survive.  That way we all will stay at the top.

Statements like this are a kind of stagecraft manipulation. Too bad the manufacturing support legs of our economy can not magically pop back in place.

See our [Index] tab under the banner, go to Economy for a list of our posts on offshoring and the advanced degree requirement for everyone.

The college degree solution is, right now, too expensive for most families with incomes under $100,000 and/or several children.  Here in my home city, an undergraduate degree at the University of Michigan costs about $27,000 per semester (if you are from Michigan).  This assumes you live in some the older dorms and eat on the  basic UofM plan; it prices a B.S. at over $200,000. Out of state students expect twice that.   It is not really comfortable even for a family in the uppermost 10% of all earners (incomes > $130,000). Compare this with median income, less than half that $130k.

This is not 1943, anymore, Toto.  It seems the UofM is now where scions of the elite can mix and meet with the other real people, avoid mingling with their lowers.

Bill Clinton still talks of rosy futures where our 320M citizens obtain university degrees like him and move to the intellectual work foreigners cannot not understand.  His thinking is wrong is so many ways.

Suppose we want to meet Clinton’s goals. How would we go about educating?

• Community Colleges?  The are 2 year teaching institutions. I started my career teaching and, in retirement, am teaching as an adjunct.  CCs are good places for pre-apprentice training, assuming more jobs are not closed. Also good for courses required by the universities.
• For-profit schools? They are a growing movement, yes, and they would love to take the money and issue diplomas.  Great investor home run, maybe, but education…?
• Distance learning? You get on the internet and log into your class.  My teaching experience is that students with poor high school training will not learn this way. (“Really, prof, I would have done so much better if our tests were multiple choice!”). I avoid involvement in DL – fun as teacher, but what educational quality do graduates get?

But maybe I am just an old frowny-face.  Maybe Alan Blinder really is right and we all can and will become brain surgeons. But I think this whole thing is about removing money from our majority median income population. Home run thinking by … whom?

Right-tariff trade to avoid supporting Slave Labor barons

Proposal: Free trade access might really be a valid solution, it could produce the environment needed to keep our lead companies in continued competition, out of monopoly formation.  But unfettered access to our market place should only go to those companies that prove they meet all the workplace safety, product quality assurance, manufacturing standards, and employee management practices that we require of US based industries.

Restate:  Right-tariffing should be required of all companies who ship saleable goods into the United States.  Each company should

• meet U.S. EPA and OSHA standards at its manufacturing sites
• pay its minimum wage at least to US levels
• provide health and retirement benefits at least to US levels.

If the manufacturer can not pass required on-site inspection tests, then tariffs should be levied to balance cost driven prices with those that do meet our internal work-place standards.  The EU, UK,  Canada, etc., would have no problem getting free access to US markets, provided our products could have reciprocity. Unclear what it would do to NAFTA.  Reciprocity on 3rd point might make it difficult for American goods to freely enter European markets, though.

I am no ideologue, and I do not think this is the sure way to a  rosy future. It would actually lead to politicking, negotiation, anger, pain.  But such a rule would have kept our “American companies” from bulldozing their own factories into rubble and re-siting facilities where people can be used like equipment, used until they are worn out, then scrapped.

__________________

click for other discussions on trade policy

At this moment (Thanksgiving, 2013), can you see how to end our role as slave users?  I do not.  But until we stop using cheap production by people living short brutal and enslaved lives, the practice will continue, with little modification.  Bangladesh and the other 3rd world countries will continue on with recurring disasters.  Our companies will continue to disavow engagement in the practices, no real help will come, and certainly no change.

Update: 2013 Nov 28: Added in final proof:  Paul Krugman hit our problem squarely in his 2012 Jul 06 article that we covered here.  He makes the point that consumers accept the sub human environments of factory workers so long as it is far enough removed that it is not visible.The orginal article disappeared from the NYT website last year, the original can be found at the link, though.  

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Charles J. Armentrout, Ann Arbor
2013 Nov 28
Listed under   Economics   …thread Economics > Inequality
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