Paul Krugman - New York Times Blog
July 8, 2013, 1:32 pm
Safer Sweatshops
A long, long, long time ago I used to believe that the central
political and economic debate facing our nation was going to be about
globalization — not realizing that it would instead revolve around a
powerful movement to roll back the clock here at home, and bring back
the Gilded Age. (As I once said, I think to Robert Kuttner, while he
and I were arguing about tariffs, Sauron was gathering his forces at
Mordor). Anyway, back then, as a columnist for Slate, I wrote a piece
arguing that low wages and poor working conditions by Western
standards were necessary and inevitable in poor countries — provoking
the predictable outrage.
All these issues have faded into the background, but they’re still out
there — and the Bangladesh factory horror has bought some of them back
to prominence. And there are now serious moves to impose stricter
safety and working conditions standards in third-world apparel
producers. So what’s my view?
The answer is, I’m all for them — and no, I don’t think that’s a
contradiction of my earlier views.
It remains true that given their low productivity, countries like
Bangladesh can’t be competitive with advanced countries unless they
pay their workers much less, and provide much worse working conditions
too. The Bangladeshi apparel industry is going to consist of what we
would consider sweatshops, or it won’t exist at all. And Bangladesh,
in particular, really really needs its apparel industry; it’s pretty
much the only thing keeping its economy afloat.
At this point, however, there really isn’t any competition between
apparel production in poor countries and rich countries; the whole
industry has moved to the third world. The relevant competition is
instead among poor countries — Bangladesh versus China, in particular.
And here the differences aren’t as dramatic: McKinsey (pdf) estimates
Bangladeshi productivity in apparel at 77 percent of China’s level.
Given this reality, can we demand that Bangladesh provide better
conditions for its workers? If we do this for Bangladesh, and only for
Bangladesh, it could backfire: the business could move to China or
Cambodia. But if we demand higher standards for all countries —
modestly higher standards, so that we’re not talking about driving the
business back to advanced countries — we can achieve an improvement in
workers’ lives (and fewer horrible workers’ deaths), without
undermining the export industries these countries so desperately need.
So, can we act to improve the lot of workers in low-age,
labor-intensive manufacturing? Yes, we can, as long as the goals are
realistic and the measures appropriate in scale. And we should go
ahead and do it.
Copyright 2013 The New York Times Company
--
Jim Devine / "Reality is that which, when you stop believing in it,
doesn't go away." -- Philip K. Dick
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