overseas manufacturing in developing countries

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.

my company moved their manufacturing overseas to dongguan in the oughties. they built their factory to western standards as far as cleanliness and safety, with special accommodations to local customs, e.g. attached dormitories with a library. I've been there, it's a nice facility. it lowered the cost of manufacture greatly and our company would likely not be around right now if they hadn't made the move to reduce product costs. it also provided jobs for folks in china and contributed to the rising standard of living in the area. so it can be a win-win situation for everyone involved if the ones holding the purse strings act humanely.

everyone except those made redundant in the original country!

Tho tbh i think you have to be realistic about retention of manufacturing jobs in highly developed economies.

sure i've said this before but there's a lot of irony in watching UK workers - clad head to toe in v. cheaply manufactured clothes mostly from Asia - campaigning against jobs going to people from other EU countries or manufacturing being sourced abroad. not calling anybody an idiot, i just think the realities of how a globalised economy works are lost on a lot of people

it's an interesting dynamic, the balance btwn protectionism (bad) and 'buying local (good), between paying an unnecessary premium for goods made in rip-off ireland/britain (bad) vs paying a justifiable premium for higher quality/ethically sourced goods, and that stuff's pretty much the least of the micro-level stuff you could ponder on here

course this is what you get for paying huge money to send every sod to university, suddenly every fucker's too good to be a binman and bang before you know it you're a high-cost economy wondering how come your 50k call centre job doesn't cover the rent innit brian

there is some good news happening in China at least. thanks to anti-western sentiment, western companies who choose to deal in china often find it politically and thus economically advantageous to hold themselves to at least as high if not higher standard than local companies - to shield themselves from charges of exploitation by the locals.

I've also read (on blogs lol) that companies seeking to build new enterprises are encouraged to build not to what current standards are, but what the standards are likely to be in ten years, because in the long run it'll be cheaper to get it right the first time rather than keep on retrofitting everything to meet ratcheting standards.

still, a lot of cruel shit goes down behind those factory walls

hah darragh we have (american focused) discussion of that in generation limbo: 20-somethings today, debt, unemployment, the questionable value of a college education

everyone except those made redundant in the original country!

well, as I said, those ppl would've been out of work one way or the other, at least they received decent severance packages instead of showing up to a padlocked door one day (the fate of a lot of manufacturing folks in the area unfortunately)

ya i was following that thread early on, but tbh i dunno how comparable ireland's cod-third level sector is to anywhere else, given that we essentially created it on the fly in the past 15 years by treating educational standards like the weimar republic treated german gold reserves

yeah it is strange to think about ireland as a country that has attracted a lot of foreign investment thanks to generous tax breaks and other perks. if you don't mind me asking, how has that played out on a local level? are people getting employed?

strange for me as a damned yankee, I should say

xp yeah ed, granted that's about as much as you can ask for. How's state support/aid for those losing jobs in those circumstances over there? They'd get a course in excel over here, three months later we'd put them down as accountants in our returns to the EU

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.)
-----------------------------------------------------------------

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

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