overseas manufacturing in developing countries

spinning this off from the steve jobs thread. I'd be interested to hear your thoughts on this. over the years I've vacillated between the two poles. 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. 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.

~discuss~

There's one thing worse than being exploited, and that's not being exploited.

first naive proposition: one would imagine that the parent company could enforce a certain level of employee rights, health and safety, pay and conditions that would be considerably better than the average for the country of manufacture, whilst still leaving manufacturing costs far lower than they wd be in the West.

a shitty job in america isn't necessarily a shitty job in, well, ireland, for a start.

second naive proposition: one would imagine that it really shouldn't be necessary for parent companies to collude with undemocratic or authoritarian regimes to deny union rights and basic protections to their employees.

And lower their profits for the next annual report? That would be illegal!

http://www.hrw.org/en/reports/2010/07/14/hellish-work-0

third naive proposition: allowing for relative standards of living and expectations in different countries and cultures, we could probably arrive at a set of rules which would represent the minimum tolerable conditions for people to be expected to work under, and we could probably attempt to legislate for adoption of these minimum standards by any company that wants to do business in our own

this is all predicated on "if we as a society and our political class gave one shit about people from a different country to us" you understand. which is probably naive proposition number 4.

and having said that, the answer clearly isn't to simply take away employment from developing countries. there needs to be political will to engage with developing countries in ways which improve on total exploitation.

the abolition of the slave trade was apparently unthinkable at one point in time.

agreement of a worldwide minimum standard of employment conditions is the dream fix, but i mean.....

failing that, first world govts having hard and fast standards for worldwide working conditions in companies that wish to operate in that first world market. Again, tough to pin this down as a working tactic.

Companies signing up to a global charter overseen and regulated by i dunno the WHO or similar probably as good as can be hoped, is there anything like this?

'Fair trade' banner etc prob a reasonable working attempt for now, also?

well setting aside the difficulties of enforcing any "legislation" at a global level, individual countries setting standards within their own jurisdictions - including for companies that source labour outside those jurisdictions - is marginally more achievable. however much of a nightmare policing such legislation might be. but a start's a start.

perhaps the Fair Trade guys, or other interested NGOs, shd consider campaigning for that kind of legislation

worth imho noting that every country that has humane working regulations went through a period of industrialization when they had none - which is not at all to say that thats the best way to do things

that's a given. you could argue that those inhumane conditions during industrialization didn't happen with a context of higher ethical standards existing outside the industrializing nations, nor were they a result of wilful exploitation by countries whose own citizens wouldn't tolerate those conditions.

yeah true there is prob a unique opportunity there

as a counter-example, slavery had undoubtedly existed within the British Isles hundreds of years before the 18th century, but was considered intolerable within the United Kingdom for generations during which British businessmen engaged in and exploited the slave trade overseas.

its true, also hitler existed

:|

lol anyway there are some v bad working conditions that could prob be accurately described as slavery and there are some that prob dont meet osha standards thatre really not that bad - i guess its a question of whats acceptable under the circumstances

It's funny there's a convention for humane treatment of 'captured' enemy personnel in wartime, but for employment it's basically "go'hed"...

yeah im sure a lot of it is turning a blind eye, people just dont want to know

i myself have in fact engaged in this behavior it occurs to me

i'm sure it's a broad picture and like i said the last thing that wd help anybody is wholesale removal of employment from developing nations. but since the worst employers are also often companies that do a lot of business in the West, we have the possibility of campaigning for improved conditions for workers who'd be endangering their families' lives if they attempted to campaign themselves.

i mean, dan said "discuss", so i guess i'm saying we shd probably be applying a lot more pressure on our governments to control businesses inasmuch as we're able.

i think also direct pressure on companies who exploit workers

i think part of the point of government is to step in because as individuals we are gonna buy cheap overseas-manufactured goods, and aside from the morality of that it simply isn't as effective to try and get everybody to constantly research who the "good" and "bad" employers are and boycott the bad guys consistently. legislation and policing wd at least be an improvement on that.

xp but direct pressure can be part of that, sure

we've just done some kind of "ethical consumering" thread right? don't want to inject that argument here, but i don't think it's trolling to say that it'll only ever be a small minority of consumers who put direct pressure onto companies in that way

occurs to me that the legislative approach is prob trickier than it seems, like how far back in the supply chain do you hold companies responsible - everything is connected ~man~

i don't think it's trolling to say that it'll only ever be a small minority of consumers who put direct pressure onto companies in that way

― Dios mio! This kid is FUN to hit! (Noodle Vague), Thursday, October 6, 2011 9:42 AM (2 minutes ago) Bookmark Suggest Ban Permalink

feel like ive seen some successful public shaming on this issue before, but yeah its not gonna work as a comprehensive approach

legislative approach is far from a panacea, but i think it might be a necessary push in the right direction. some companies will always break embargoes, but governments can make it effectively cheaper for medium to large businesses to work within the law than not.

yeah i agree i was just musing on the logistics of the thing

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.)

k i did not know that. how's does it work?

Could a global living wage pull us out of this recession?

http://blogs.ft.com/economistsforum/2011/07/a-global-minimum-wage-system/

yeah, how d'you trace that from one shell company to another holding firm owning several very nasty indian subsidiaries or whatever? Forensic analysis is expensive and it's hard to prove the links in a lot of cases, i mean

Xxxxxp this is pretty much the same subject as the 'individual consumer' thread, tho jho, even if ahem u didn't respond to me on that thread just sayin

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.

sry im a lil behind on that one! xp

a global minimum wage would be based on what? Cost of living locally? That's pretty much what exists now, just that some countries are at an earlier stage of industrial development.

Or some nominal baseline income? How could you even start to set that?

darraghmac, people have been thinking about the answers to those questions for a long time. if you read the article i linked you'll see that guy proposes a percentage (say half) of a country's median wage. which is not that difficult to calculate.

eh, i should come kinda clean here, tho it's gonna hurt my ilxmage.

Before i finished college i'd already interviewed for and secured a job as product manager for a decent sized local firm that sourced and imported a fairly large range of products from eg china, india and rebranded them for sale in ireland (and further afield iirc). It was a pretty shit-hot gig, flights round the world to be wooed by sellers, five star hotels and banquets and a few nudged references to kickbacks etc while you were out there. Ms mac was delighted.

From day one it was pretty clear that the firm didn't give two shits about working conditions of suppliers, so after a few days of wrangling with the options of 'doesn't bother anyone else here man up' or 'this sucks' i quit.

I am a bleeding heart lefty.

xp sorry tracer, i'm ilxing on the phone so i'm not throwing the article aside, i won't get a chance to read til later is all.

I mean yeah i could stay out of the debate til then but that won't make work go any quicker now will it

lol outed yrself

don't get excited i still hate minorities and women

hooray :D

No reason why the UK govt couldn't legislate on the same princple as they have done with the recent Bribery Act - if you fail to comply with x or do y anywhere in the world, then you're guilty in the UK.

Bribery act has many people who do business outside The West not knowing how the hell they'll be able to run their businesses but.

i'm no expert, but how does that work re: jurisdiction etc?

I think the re-branding part of darra's experience is a key to what kind of company takes labor standard precautions: if you put out the products under your own brand AND are responsible for the manufacturing, there's a direct line that's very traceable to your brand reputation. In that case, you just make the higher standards part of the added value your product offers to consumers--the assuaging of whatever consumer guilt/reassurance that you are consuming "responsibly" blah blah see other thread.

this is why I love ILX - you can get up to speed on the current levels of thinking about an issue in 40 posts flat.

I'm pretty disturbed by how quickly companies move to transfer their operations as soon as their is a hint of rising standards or wages or demand for rights in a country. makes it hard for the country in which the factories are in to enforce anything - the companies jump ship as soon as they get shook.

related note, someone who works in japan told me that companies have been using the earthquake/tsunami as an opportunity to move manufacturing off shore - previously it would have been too politically incorrect or culturally frowned upon to do so outright, but hey now that they're destroyed and we're gonna spend the money anyway let's do it in vietnam.

yeah, that's smart.

It's also a big book factory, that's how I see it anyway.

That'd be interesting to get the full scope of overseas manufacturing and how it relates to our lives as consumers and the lives of workers in the factories. Maybe it'd be a bit too much for people to face, though, to see how much of our convenience and luxury rests on the backs of people living and working in terrible conditions. Seems like the kinda thing people would block out of their minds, though ... nobody (or at least decent people) likes being complicit in abusing people, especially when it makes their lives more convenient.

Funny how human nature doesn't change very much... was there ever a period in human history without some type of slavery? It's not just having people in physical shackles, but also circumstances and conditions that compel sacrificing your life and individual freedom to survive. Even when we do have the luxury of actual freedom of choice, there was a response to that: consumerism. Will the future be any different?

I think the more interesting question is, let's say the developing world agrees to strictly adhire to american labor standards. how much more would an iphone cost? would it be worth the jobs lost in the process?

The experience of working in assembly of small electronics, the experience of working in a factory running injection molding machines making plastic bowls, and the experience of working in a garment factory all very very different. Part of the reason why there's so much focus on that Apple plant is that the pace there is super intense because of the insane demand. There are industries where factory workers get to chill a bit, believe me.

err adhire = adhere

would it be worth the jobs lost in the process?

I don't believe any jobs would be lost - really. i think demand is price inelastic well beyond the price increase required to avoid sweatshops.

the difficulty is coordinated action - china doesn't want to go first because it's already facing pressure from vietnam, etc. apple doesn't want to raise the price of the iphone if samsung doesn't do this. etc.

well are we talking about some global minimum wage too? and I wasn't really talking about *just the iphone* which is fairly unusually price inelastic, I was just using it as a default object in a world w/ universal labor standards.

I'd imagine that if all the East Asian countries banded together and enforced higher qualify of life initiatives, people would find another way to make the most profits they can if there's an available alternative. Africa next? China's already moving some manufacturing to the continent and treating African employees even worse than Chinese employees.

So, probably won't make a squat of difference if China and all the Asian companies raise their standards to American standards, and probably won't do squat to help American workers. That's a totally off-hand conclusion, though.

China's not manufacturing anything in Africa, they are mining for resources

Foxconn, otoh, is opening a factory in brazil

that's why I said we should try to imagine the consequences of doing it globally xp

China is not moving manufacturing outside China, they are merely moving manufacturing the next province inland (previously the ass end of nowhere).

"manufacturing TO the next..."

right, a global minimum wage would do it. hopefully a living wage based on in-country prices.

it create a really weird situation as the ~800 million subsistence farmers in the world suddenly have an even greater incentive to migrate to cities.

*would create

Jon L I thought China was starting to feel pressure from countries like Vietnam?

Yes, sure, but they can shave labor costs down a bit by moving inland to a province which has not been through this whole process yet. Meanwhile the long-standing manufacturing cradle is being transformed into tech business 'destination cities'.

it create a really weird situation as the ~800 million subsistence farmers in the world suddenly have an even greater incentive to migrate to cities.

― lukas, Thursday, January 26, 2012 1:22 PM (2 minutes ago) Bookmark

china claims that the number of urban residents now outnumber rural, though I have my doubts - that's just taking into account migrant workers, who still maintain hukou back in their rural villages

right, a global minimum wage would do it. hopefully a living wage based on in-country prices.

well while I don't think it holds true in all cases, I think that would cost jobs in the big picture. if cheap walmart plastic is more expensive, we're buying less of it, etc.

and yeah, traditionally it's been the eastern and southern coasts of China that have been the most developed through history - just because of proximity to water and shipping. china's infrastructure is catching up, rail lines are being built, to the interior - maybe in 50 years, china will be like america, where even living in the middle of bumfuck nowhere kansas (apologies to all people from kansas) can enjoy fresh ocean caught swordfish and fruits from venezuela.

haha in 50 years people in kansas might not either

As we talked about much earlier in this thread (ppl should read the whole thing it's good!) the lower cost of labor inland may be offset by the higher cost of trucking/railing the goods a further distance to the port...

i'm sure that would be true in some cases, but in other cases mightn't the wage increase just be absorbed by cutting profits? couldn't we think about the minimum wage basically as a redistributive tax?

xxxp

I think the more interesting question is, let's say the developing world agrees to strictly adhire to american labor standards.

As I've posted before in this thread (now lost in the fold I think), one of the pressures in my industry happens when a certain project requires us to adhere to American-level labor standards and we're told repeatedly that the factory employees WANT to work overtime, 6 days a week, longer shifts, etc. Because a lot of them will only be doing this job for a year or two or three, it's not a lifetime of the same labor conditions every day stretching in front of them.

At least this is my impression. Several other posters (dayo?) raised doubts about whether what I was hearing was actually the voice of the workers or the management.

http://www.bloomberg.com/news/2011-09-05/world-bank-china-may-cooperate-to-transfer-manufacturing-jobs-to-africa.html">=http://www.bloomberg.com/news/2011-09-05/world-bank-china-may-cooperate-to-transfer-manufacturing-jobs-to-africa.html

http://www.guardian.co.uk/world/2009/dec/04/china-manufacturing-factories-africa">=http://www.guardian.co.uk/world/2009/dec/04/china-manufacturing-factories-africa

I was just guessing off-hand, but it's hard to see Chinese manufacturing moving to Africa as not being in the realm of possibility. It's a bargaining chip in a way ... if things get too expensive to produce in China, move it somewhere cheaper if possible. It's not like tycoons have any particularly local allegiances beyond needing labor and resources.

I'm seeing some efforts to move some manuf to Thailand, tbh. Not sure how this figures in.

i'm sure that would be true in some cases, but in other cases mightn't the wage increase just be absorbed by cutting profits? couldn't we think about the minimum wage basically as a redistributive tax?

well that might be the case for a cut of the iphone $ and related products, but in the big picture I don't think very many things we buy are that inelastic and I don't think your average american has *that much* breathing room in their budgets. which is to say on a certain cut would be redistributive but I think that wouldn't make up for the overall losses.

plus in this world american goods and services are now more attractively priced - go to a concert instead of buy plastic crap etc.

i'm not arguing that there are a lot of goods that are price inelastic, i'm arguing that there ... some ... industries that rack up enough profit to absorb cost increases without increasing prices. i don't know how many, i guess.

apple is pretty unique in that regard - for PC manufacturing, profits are RAZOR THIN

aw

I like the idea of a global minimum wage, but how would that ever come into existence? Would it be required for global stability? If not, it's hard for me to see how people demanding that would have enough bargaining power to make it happen.

As long as globalization exists and cheap sources of labor exist (taking into account cost inputs: fixed costs of infrastructure and developing labor pool, costs of production and shipping per #units, etc., on price considering demand), it completely obliterates any power workers have to make demands on their own behalf in the long term.

What are the solutions here to regain power on that level to make these demands effectively ... armed revolution? Same people take power as we have in power now. Maybe the only solution is if every consumer makes the demand themselves in refusing to buy products manufactured in a certain way, but that depends on the factors of: access to information, and going against the grain of people liking convenience and dealing with their own problems. It's up to us to take account of the social costs ... but that depends on how active and altruistic people are, and I'm a little cynical to believe that would make much of a difference. :{}

Just seems like we're in a very long-term stretch of exploitative labor on the global scale re: manufacturing. I'd love to see how Africa is as a future manufacturing base, because if it is then don't see much hope for this trend changing unless something totally unexpected happens. Shit's different now.

http://behindthewall.msnbc.msn.com/_news/2012/01/31/10284158-the-chinese-want-jobs-too

Workers want those jobs
On Monday, tens of thousands of people lined up outside a job agency to apply for an estimated 100,000 new jobs Foxconn is seeking to fill at its factory in Zhengzhou, the capital of central Henan province.
Foxconn wants to double its current workforce of 130,000 at the Zhengzhou plant, which it opened last year. The facility already churns out 200,000 iPhones a day and is part of Foxconn’s grand plan to make Zhengzhou the world’s largest smartphone manufacturing base.
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The basic starting salary advertised--according to a report posted on M.I.C. Gadget, a blogsite about tech and other related matters in China—is 1,650 yuan a month ($261), which includes dorm housing and food.
The pay is lower than comparable salaries Foxconn pays workers at its Shenzhen factory in southern China. But that may be a sacrifice Henan workers are willing to make initially.
With a population in excess of 100 million, Henan is China’s most populous province. A fifth of them are migrant workers who travel widely to find jobs in the country’s more prosperous regions like the south or coast.

$261 a month on top of housing and food is not completely terrible, especially assuming certain things are going to be a lot cheaper there than we're used to. I mean at least that almost guarantees you have extra money to send to your family or save if you want, as opposed to making exactly enough to survive.

I would wager that, taking into account cost of living, that salary is probably equivalent to a 20,000-30,000 a year salary here. but I'm not an economist so I don't know how to directly make those comparisons.

cross-posted from the china thread

http://www.thatsmags.com/shanghai/article/1670/DUMPLINGS!!-for-sale

a good picture of what poor people in china do that doesn't involve making iphones, it's pretty sad

Interesting China fact:

The richest 70 members of China’s legislature added more to their wealth last year than the combined net worth of all 535 members of the U.S. Congress, the president and his Cabinet, and the nine Supreme Court justices...
The wealthiest member of the U.S. Congress is Representative Darrell Issa, the California Republican who had a maximum wealth of $700.9 million in 2010, according to the center. If he were in China’s NPC, he would be ranked 40th. Per capita income in China is about one-sixth the U.S. level when adjusted for differences in purchasing power.

http://marginalrevolution.com/marginalrevolution/2012/02/china-fact-of-the-day-6.html

Meanwhile, domestic warehouse work in the undeveloping united states:

http://motherjones.com/politics/2012/02/mac-mcclelland-free-online-shipping-warehouses-labor

there's a few details that are a bit fucked up but feeling a lot of "yeah, so?" knee-jerk too.

the great convergence

"amalgamated" is a thin disguise for "amazon"

http://blogs.ft.com/beyond-brics/2012/01/19/fewer-more-demanding-workers-for-vietnamese-factories/#axzz1juui4rRO

Unlike China, the vast Communist neighbour to which it is often compared, Vietnam does not have large pools of migrant workers desperate for factory jobs, says Pincus:
“In China, there’s still huge a migration to the coast. There are hundreds of millions of potential workers who have few options. In Vietnam, the migration is smaller, the country is smaller and for many people there are other, better options.”

sad lol

http://www.chinalawblog.com/2012/03/the_end_of_cheap_china_part_v_vietnam_burmamyanmar_and_the_next_big_thing-2.html

http://motherjones.com/environment/2012/03/walmart-china-sustainability-shadow-factories-greenwash?page=1

http://go.bloomberg.com/tech-blog/2012-03-20-now-can-we-start-talking-about-the-real-foxconn/

good post but I'm afraid that 'foxconn apologist' may be a hard label to shake

http://www.newyorker.com/online/blogs/newsdesk/2012/03/iphone-factories-chinese-dreams.html

So this Hanjin Shipping collapse is really something. Container vessels full of TVs doomed to circle port forever as their crews starve. Christmas ruined. Etc.

http://www.wsj.com/articles/billions-in-cargo-remains-stranded-at-sea-1473285117

The fact it is all being documented by an artist in residence is a fabulous twist.

Can't read the WSJ article but it's kind of amazing that the first major container line to go bust in thirty years did so at a time of super-low oil prices.

I'm learning a lot of things I should have already known as a result of this toothsome story.

It's surely going to impact my day job as well (though we don't ship anything with Hanjin)

Here's a great piece about the sham of Nike's "Girl Effect" campaign vs the realities for women working in its Vietnam factories.

Chapo Trap House's interview with the author is also great.

a little bit of third world in small town dayton ohio

https://www.nytimes.com/2017/06/10/business/economy/ohio-factory-jobs-china.html