overseas manufacturing in developing countries

pleased to see this was online, it might interest you later on darragh

http://www.cvoice.org/CV3gibson.pdf

anarchist Tony Gibson's 1952 pamphlet "Who Will Do the Dirty Work?". not a set of theories to live by probably but a funny, interesting look at issues around low paid jobs, from an era before the "everybody goes to university boom"

speaking as a dude that sells lots of imported stuff, part of the problem is that most of the super cheap products change factories constantly - its all a bidding thing done on a 6 month or sometimes less cycle. so i think its safe to assume that there isnt a lot of due diligence re: standards of employment. the vast majority of american companies that i deal with have no ownership or control of the factories that make their imported goods.

xp to dayo

Hoo boy. That's kind of a big one, y'know? We're holding on to our low corporation tax rate, and therefore a reasonable amount of manufacturing and low-grade white collar jobs for the moment, i guess. Our rapid growth happened at a stage that allowed us to shed total manufacturing dependence while myriad higher-qualified positions were available, so we're now very much a service-based economy- there's a lot of factors touted as to why we attracted the likes of google, microsoft, amazon etc who've all got their european hubs in dublin, but the ability to declare profits here @ 12% odd is a big one, which is why we traded everything but that when the IMF came calling. Poison chalice imo, but that's another thread.

xp cheers nv, i've to study limited differentiation tonight to get my bro past his repeats but if i get a chance i'll catch that.

Hey, guys! There are already some global labor standards in place for different industries. I don't know about any of them except printing/binding, but we haven't used any companies who don't comply with our chosen standard for maybe a decade. (I'll remember the name of the standards organization in a sec.)
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Well, there's a regulating body (International Standards Organization = ISO) who gives tests and visits plants to inspect conditions, and plants have to achieve certain standards, including health & safety, labor conditions, living conditions for on-site personnel, etc. If they don't pass them but the deviation is small, they get another chance in like the next 6 month period.

P much factories know that they're either within shooting distance of the rules, so they clean up a few areas of compliance and they're in, or they're not interested because their customers won't care.

But it's pretty uncool as a highly visible commercial enterprise NOT to care, like, I make books for children, so if child labor were being used to make them, that would be a) indefensible and b) terrible for business! For instance, Disney has one of the strongest sets of standards in the entire Asian manufacturing business; if a facility has been DISNEY-approved, you know you're safe to send work there.

― Octavia Butler's gonna be piiiiiiiiiiiiiiiiiiised (Laurel), Thursday, October 6, 2011 10:19 AM (2 hours ago) Bookmark

I have worked in QA for a US housewares company for almost 8 years now (almost all injection-molded plastic stuff with stainless steel, very little wood stuff and almost no textiles), and basically everything Laurel said reflects my experience.

We own none of the factories who produce our goods (almost all of them in China, most of those in Dongguan). We conduct third-party audits of all of them assessing labor practices, working conditions, bookkeeping practices etc. On top of that, most of the larger retailers who carry our products have their own labor standards for which they send in their OWN inspectors to look at the factories we work with. Obviously the factories know when they are gonna be audited and probably can sweep a lot of stuff under the carpet the day before or whatever, but we also visit all these places frequently to do routine QA inspections and our inspectors tend to keep a weather eye out when they are on-site.

Wages for factory workers in China have gone up a great deal and are still rising, but it's still difficult for these factories to retain them. Each holiday break, a huge percentage of workers stay in their hometowns and don't return (= right after each holiday the products are shitty because everyone on the line are noobs). Workers in China or at least in Dongguan and surrounding areas no longer feel they have to work in manuafacturing and are more liable to seek something better. To me, Jon Lewis, this is a good thing, even though to me, manager of QA inspections, it's a total headache.

Also, word on the street is that the government is pushing manufacturing out of its classic areas in order to recast these towns as more touristy and 21st century. So I expect more and more of our vendors to either 1. head to the next province over 2. go out of business.

Another thing to consider in this convo is the rising rising rising fuel cost of shipping manufactured goods from China to the U.S. There has to come a point when the labor savings no longer offsets the cost of shipment. This already happened to us with one product which was large yet lightweight-- we moved it to a factory in Philly.

Great thread BTW.

peak oil will be what saves us

great post jon, btw

thx but i forgot to say I have no idea what the state of play is in China garments & textiles manufacturing. Like, whether the old 'sweatshop' conditions have been systemically remediated at all. I suspect so?

i wd imagine it's harder for the old sweatshops to continue in the same way as long as more attractive jobs are competing for labour?

willing to bet that workers probably still work 10-12 hours a day with mandatory overtime

Um in our experience here, workers WANT to work overtime and the standardized labor regs won't allow them to.

oh, hm. I'm misremembering

maybe some kind of shift-juggling where they don't get overtime

I find it amusing when people consider Taiwan, Singapore or South Korea "developing countries".

esp when their cost of living is > the USA's.

I think some of that willingness to work what we consider inhumane hours is that people don't do these factory jobs for a long time, typically. They work for 6 mos or 12 mos or a couple of years, max, and then as jon said, travel back to the country for Chinese New Years (a month-long holiday for some factories) and don't come back.

shasta you're the first person to mention those countries itt

to me what's hilarious is that even luxury companies manufacture their things in china - as if their profit margins weren't big enough already

laurel I think notions of amount of hours considered to be inhumane is going to be informed as much by culture and necessity and willingness as much as by some objective limit of what we consider humane.

some of these workers make far more than they would otherwise at home by working in these factories, and want to maximize their pay as much as possible, maybe working 12, 14, 16 hours a day. in this respect, they are not very different than investment bankers or biglaw lawyers.

others, however, are not willing and maybe be compelled to. that is abuse.

Laurel OTM... for the workers on the factory floor I think it's kind of like those insane fishing boats ppl work on for a summer (except minus the adventure, plus ping pong, and for 11 months instead of one season...)

re: 'even' luxury companies manufacturing in china- can't have 'too much' profit. the place i quit sold upmarket geegaws and knicknacks in posh homeware stores, has a big share of the outdoor pursuits clothing & equipment market, not low-margin stuff

xpost yeah compulsory overtime is a whole different thing and of course there are different ways in which it can be 'compelled'.

another interesting wrinkle-- Chinese govt labor laws state that workers should be compensated by time worked whereas a lot of workers prefer to be compensated per finished piece.

i've worked on insane fishing boats for the summer too!

whereas a lot of workers prefer to be compensated per finished piece

Wasn't this how Stalin did it?

laurel I think notions of amount of hours considered to be inhumane is going to be informed as much by culture and necessity and willingness as much as by some objective limit of what we consider humane.

otm I consider 40 hour weeks inhumane considering how much money this country has

laurel I think notions of amount of hours considered to be inhumane is going to be informed as much by culture and necessity and willingness as much as by some objective limit of what we consider humane.

The complaint I have heard is that the regs our plants are required to follow limit the work-day to a Western-standard value, ie 8 hours or no more than 10-hr shifts, 4 days a week, or something, and the workers are frustrated by not being allowed to put in more time. NB I have not spoken to the mainland China employees personally in Chinese without mgmt present so I cannot promise that this is their true opinion, but that's what I hear.

If fuel costs end up making container ships a relatively expensive way to ship things, the world is going to change in a massive, massive way.

that is the underlying concern of the suburbs thread and the energy thread and like a million other threads

I'm also wondering how much of it is actual worker feedback and how much of that is predatory bosses - "oh yeah, our workers want to work MORE!" *pockets money* xxp

A one-dollar rise in world oil prices leads to a 1 percent rise in trade transport costs. In terms of the marine and inland transport movement of a 40-foot container from Shanghai to Columbus, Ohio, the total transport cost was $3,000 when oil prices were $20 per barrel in the year 2000. Today at $140 per barrel, the cost is $8,000, and should oil prices rise to $200 per barrel transport cost would rise to $15,000 per FEU

http://www.marad.dot.gov/documents/Modal_Shift_Study_-_Technical_Report.pdf

!!

We may get our industry back, people!!

it's a definite possibility, though it's such a huge concept and so diametric to trends over the past 20+ years that it's hard to get your head around it.

Village blacksmith ftw

or what you said upthread, dayo, i.e. peak oil will save us

i.e. mommy will take the candy away

30 years ago you could ship a 40-foot container across the pacific for $3000

hmm can i say 'diametric' like that? To the grammar fiends thread

that report says that even in 2000 you could get a 40-foot container all the way across the pacific and up to columbus OH for $3000.

would be an interesting study imo- what effect, if any, has the ability to kick a ball in the street had on the cost of transoceanic goods transportation ?

oh sorry i didn't realize we were doing this

brb

(think "diametrical" would be better in that context, not sure why)

'diametrically opposed' yeah.

http://msnbcmedia3.msn.com/j/msnbc/Components/Photo/_new/080827-girl-vmed-645a.widec.jpg

I find this photo really touching - behind every strong iphone stands an even stronger chinese worker working 12 hours a day

Ford, GE and Otis Elevator are among companies that have all just recently announced moves of labor back to the US.

Trying to find good articles that are not WSJ-paywalled.

Supposedly some of it is rising labor costs in China (I had a feeling eventually this would happen) and rising transportation/warehousing costs, but there's some speculation it's partly an image thing, especially with a company like Ford.

I guess an assume-a-can-opener economist would argue that this is what's supposed to happen -- the same free market that drives manufacturing overseas should also eventually drive the cost of manufacturing in other countries up and we should move toward some kind of equilibrium. In reality I find it hard to believe that things work that way for a number of reasons.

Well yeah, partly because rising standards of living in China usually just mean pushing things out to even poorer parts of the world.

If fuel goes up, wages gotta go down

assume-a-canopener would then posit that the increased competition for labour would eventually bring up wages, standards in those economies also, tho

A rising tide lifts all container ships!

ha!

Xpost - and yes I am skipping a zillion posts to make a point that has probably already been made loads of times upthread.

yes, it's incredibly exploitative of the workers who under any reasonable standard of fairness shouldn't have to work in what are, by all accounts, pretty horrific conditions.

Horrific conditions are not intirinsic to overseas manufacture. The problem is surely the horrific conditions, not the overseas manufacture. It is probably quite economically advantageous to have overseas manufacturing taking place in reasonable enough conditions, given the pay differentials between po' countries and the first world.

however, the harsh economic and social realities of the country they were born into make it so that these jobs are often their only alternative to an even harsher existence.

this is also a valid point - except in those countries that still have slavery and serfdom, people are free to decide whether working for peanuts in a maquiladora is a better or worse deal than loafing around as a landles agricultural labourer (or whatever); without Foxconn they do not even have that choice.

Campaigns drawning attention to factory conditions that we would consider unacceptable are useful as way of forcing some improvement in those conditions.

Well yeah, partly because rising standards of living in China usually just mean pushing things out to even poorer parts of the world.

― TracerHandVEVO (Tracer Hand), Friday, October 7, 2011 8:34 AM (3 hours ago) Bookmark

Keep in mind there are vast regions of China where these industries have not even happened yet, so it may just mean pushing things to a different, poorer region of China. But that means more distance from those new manufacturing regions to the port and there's those fuel costs again...

Right..