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Sweatshops Don’t Just Happen – They’re a Policy

It’s neoliberal policies, not consumers, which make the sweatshop economy possible.

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On May 5, The New York Times dedicated its “Sunday Dialogue” feature to letters about the factory collapse in Bangladesh that had killed more than 1,100 garment workers a week and a half earlier. The “dialogue” started with a letter from University of Michigan business school professor Jerry Davis, who apportioned blame for the disaster to “the owners of the building and the factories it contained, to the government of Bangladesh, to the retailers who sold the clothing,” and to us. Through “[o]ur willingness to buy garments sewn under dangerous conditions,” he wrote, we “create the demand that underwrites these tragedies.”

There’s a striking omission in Prof. Davis’ list – the people whose policies make the sweatshop economy possible.

For more than three decades, US politicians, think tanks and columnists have promoted an economic program known in most of the world as neoliberalism. Here in North America, we use nicer-sounding terms like “free markets,” “free trade” and “globalization,” but the effect on developing nations is the same.

Trade agreements like NAFTA slash the tariffs that once protected local farmers from competition with the industrialized world’s government-subsidized agribusinesses. Driven off the land by cheap imports, the farmers find themselves in cities already filled with workers whose jobs were eliminated by privatization and austerity, policies that international agencies such as the International Monetary Fund (IMF) imposed as loan conditions. Meanwhile, the same trade agreements that have thrown millions of desperate jobseekers onto the labor market also make it cost-effective for multinational corporations to transfer factory work from their own countries to the Global South.

We see the result of these policies in the more than two million Mexicans who now work in maquiladoras assembling goods for the US market, the more than three million Bangladeshis who sew apparel for European and US retailers, and the millions more across the globe who either work in sweatshops or cross borders “illegally” to find jobs in the richer nations.

Selling the Sweatshop Concept

With this vast international workforce producing goods for a relatively limited market in Europe, North America and parts of East Asia, companies like Walmart are free to shop around the world for the best bargains. So, of course, their orders go to the factories with the lowest pay, the worst conditions, the weakest labor representation and the greatest likelihood of catastrophes like the one at Bangladesh’s Rana Plaza on April 24.

It might seem strange that the US public would accept these policies. After all, they affect us too, although not at all on the same level as in countries like Bangladesh: The outsourcing of industrial jobs from this country is clearly one of the main reasons for the stagnation of wages here since the 1970s. But sweatshop apologists sell their policies by appealing to our altruism. Cheered on by liberal columnists like Thomas Friedman and Nicholas Kristof in The New York Times, the politicians and policy makers tell us that sweatshops create jobs for poor people and boost economic development in the less industrialized nations

This public relations offensive reached a high point of sorts when the Obama administration promised to help Haiti after that country’s massive 2010 earthquake. The largest single US contribution so far to “earthquake relief” has been $124 million of our tax money used to help build a 617-acre industrial park on once-productive farmland in northern Haiti. The new factories at Caracol, a 100-mile drive from the area hit by the earthquake, will create 20,000 jobs, our government officials say, or maybe even 65,000. “Children will go to school, will be healthier, will have more of their own dreams fulfilled because their mothers had good jobs,” then-secretary of state Hillary Clinton announced at the park’s opening ceremony in October 2012.

Job Creation or Union Busting?

Haitians are understandably skeptical about the idea that jobs paying $5 a day will develop the economy. They heard the same promises during an earlier round of sweatshop building in the 1970s and 1980s, which left the country worse off than ever. And far from planning to create jobs, Korean apparel giant Sae-A Trading, the new park’s lead tenant, seems more interested in shifting production from other impoverished countries.

In July 2012, Times reporter Deborah Sontag noted that the AFL-CIO has accused Sae-A of vicious union busting at its main factory in Guatemala. The company eventually responded to unionization efforts by transferring much of its production to Nicaragua; an April article in The Nation charges that Sae-A has continued to use anti-union tactics there. But the firm doesn’t plan to stay in Nicaragua. When trade preferences for Nicaragua expire in 2014, Lon Garwood, a senior adviser to Sae-A, told Sontag, “a lot of product orders now going to factories in Nicaragua can go through the Haiti operation.”

Sae-A undoubtedly expects to move on from Haiti in the same way if its employees in Caracol begin standing up for their rights – just as apparel firms are starting to move on from Bangladesh now that there’s pressure to allow unions and maintain safer conditions in that country.

After all this, when a major industrial accident occurs, the sweatshop promoters turn around and point their fingers at us, the consumers.

In fact, we are guilty. Not because we buy clothes, and not because, as Professor Davis claims, in “a web-enabled world” we can somehow “quickly research which brands oversee safe practices” – those of us who actually live in areas where our choices aren’t limited to one big-box store or another. We’re guilty because – up until now, at least – we’ve stood back and allowed the politicians and the talking heads to turn the Global South into a global sweatshop.