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My Broken Record on Supply Chains

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Yes, I’ve said this 1000 times before. And I will say it 1000 times in the future. The only way to stop the exploitation of the world’s poorest in the global supply chain is to create global labor standards that hold the western companies buying the material legally accountable for everything that happens in those supply chains. The reason for that is that it’s the only way to stop things such as child slavery in the apparel industry. Even if India banned that child slavery, if Pakistan allows it, the contractors are just going to move there if it’s cheaper. That’s not acceptable. And the working conditions and lives of these young workers are very, very, very bad.

India is one of the world’s largest textile and garment manufacturers. The southern state of Tamil Nadu is home to some 1,600 mills, employing between 200,000 and 400,000 workers. Traditionally the dyeing units, spinning mills and apparel factories have drawn on cheap labor from villages across Tamil Nadu to turn cotton into yarn, fabric and clothes, most of it for Western high street shops.

Most workers are young women from poor, illiterate and low-caste or “Dalit” communities, who often face intimidation, sexually offensive remarks and harassment. ICN said in more than half of the mills it researched, workers were not allowed to leave company-controlled hostels after working hours. Only 39 mills paid the minimum wage and in half the mills, a standard working week involved 60 hours or more of work.

“Supervisors torture girls to extract work beyond their capacity,” ICN quoted an 18-year-old former worker as saying.

Another teenage girl, Kalaichelvi, who earned around 8,000 rupees ($118) a month, told researchers she was forced to work for 12 hours straight with no breaks for lunch or to use the bathroom. She said she suffered from burning eyes, rashes, fever, aching legs and stomach problems due to the working conditions.

About a third of the yarn produced by workers like Kalaichelvi is used in export factories in Tamil Nadu that produce garments for many global brands. Citing poor enforcement of labor laws and “superficial audits” by buying brands, the ICN called on the industry and government to map supply chains and publish sourcing details. It also called for factories that upheld standards to be rewarded.

Moving ahead with the sort of solutions in this report make sense and are more pragmatic than mine, but are ultimately not nearly enough. If Walmart or whoever doesn’t want to pay fines, it needs to make sure its clothing is not made by children, needs to ensure its contractors are paying a basic wage, and enforce standard dignity in working conditions. It’s not that hard. Even if the United States is likely to become more like India in the next four years than the other way around.

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  • Bill Murray

    Erik, you just don’t understand how those $118 a month changed Kalaichelvi’s life — burning eyes, rashes, fever, aching legs and stomach problems are a small price to pay to be lifted slightly higher on the abject poverty scale

    • Juicy_Joel

      “Does India want a textile industry or not?” – associate professor of economics

  • MaxUtility

    I’ve been having a hard time lately with friends and family who decide to boycott one or two particular clothing retailers because of their work practices. On the one hand, I completely support ‘voting with your dollars’ and not being just too lazy to pay attention. On the other hand, it doesn’t go over well when I say, “they’re all bad, not buying one shirt from one store doesn’t make a difference, we need full institutional answers to address this.” I’m pretty sure I’m right, but so what. It just leaves everyone feeling helpless. I guess you do both and keep fighting.

    • Boycotts are fine if they are coordinated with workers’ organizations. But boycotts just to make consumers feel good about themselves accomplish nothing.

    • NewishLawyer

      There are some higher end clothing brands that I like whose clothing is allegedly made in the United States. I say allegedly because some of the laws about what counts as “Made In” are very lax. IIRC it is easy to to get a Made in Italy label. I am not sure about the Made in the US equivalent.

      The other problem is that these clothing labels are selling to an upscale fashion conscious market and not a everyday market. So people’s clothing costs would go up dramatically.

  • Brett

    One casualty of rising nationalism and Trumpism is likely going to be any near-term potential for a framework and international rules on working conditions. Not that it was likely in the near-term anyways, but now it’s even less likely.

    The US could try it on its own, with a Foreign Corrupt Practices Act-style law for working conditions (which would also let them go after foreign corporations with significant interests in the US). But that’s not on the books either.

    • Foreign Corrupt Practices Act-style law

      Under Trump, corrupt practices—foreign and domestic—will be the law. (Cf. Nexon’s post.)

  • I don’t see any solutions mentioned in the report. I presume you want legislation that would require U.S. companies to establish that child labor is not involved in products they import? There are a lot of difficulties with that, you would need to spell out more details. For one thing, if would be difficult or impossible for smaller enterprises; and easy for WalMart to fake it (the way Apple has already done). And, as I have said many times, the problem remains that these families don’t have any alternative. They need adequate income to keep their kids in school.

    • This idea that families need the kids to work makes much less sense when the companies pay adult workers more money to do the same job. I have said this before, but you are literally repeating the arguments made a century ago by the National Association of Manufacturers in favor of child labor in the United States.

      • Joe_JP

        Before there were minimum wages etc., kids working “a century ago” very well might have been necessary for a family’s survival. “When” things changed, it was much less necessary.

        • Origami Isopod

          Also, too, the length of education needed to thrive in today’s world is much different than it was a century or more ago.

  • cpinva

    and I’ve said it at least a dozen times before, right on this here site, the only way to get this, along with concurrent environmental laws for those same countries, is to mandate it as part of any trade agreement. for goods entering the US, from any foreign country lacking these minimum labor/environmental laws, a tarrif, equal to the avoided per unit production cost. these funds would go to a dedicated pool, for paying judgments against the US. make them pay one way or the other. or, they could just move those production facilities back here to the good old US of A, and not have to deal with all that nonsense. their choice. it’s all about having choices.

    of course, none of this will happen with the present makeup of the federal gov’t.

    • Rob in CT

      And I think this could be a political “hit” as a side bonus. It puts up some barriers to trade, but they’re not arbitrary ones just for the protection of local industries. It’s not 10% (number made up, obvs) tariff because we said so, it’s 10% tariff unless you get your shit together on workplace safety, environmental protection, etc. “Fair trade – protecting American workers from a race to the bottom and protecting foreign workers from exploitation.”

  • DrDick

    I would add that it is not just sexual comments the workers face, but assault and rape are common. There is also massive wage theft (from the already obscenely low wages). I was just reading something on this a week or so ago. It is really disgusting and the Western companies either know this is happening or should, since it is hardly a secret.

  • Frank Wilhoit

    “Global standards”, in this area or in many others, would presume global parity in all of the areas that would support implementation/eforcement of those standards. No, it is worse than that: in all of the areas that would support defining those standards. And that is a very wide net of conceptual contagion.

    Who remembers, for example, that the original (~1970) rationale for offshoring manufacturing was not to reduce direct labor costs, but to reduce product-liability exposure? Think about a regulatory regime that could level that playing field. Actually, first set up a pair of headphones to shout global global global global global in both your ears, then think about it.

    • DrDick

      Actually not. We already have a lot of UN resolutions clearly defining standard workers’ rights. What we need to do is implement an enforcement mechanism. Ideally this would be through some global institution like the WTO, IMF, etc. (presuming, against the actual evidence, they have any interest at all in protecting workers). Alternatively, build it into existing and future trade agreements. This really is not hard, except for those who do not want to protect workers.

      • AdamPShort

        Exactly. The broad outlines of a system of meaningful international standards for various things actually already exists, but since there’s no way to make rich countries participate when it’s not in their interest to do so, it’s not effective.

        The technocrats/VSP always believe that the complexity of the problem must be the issue. Often the problem and its solution are fairly simple; what’s complicated is the reason the problem doesn’t get solved.

        Just like how the NCAA is always talking about how complicated it would be to figure out how to pay athletes. I mean, yeah, there are ins and outs to be worked out, but that has nothing to do with why the problem doesn’t get addressed.

      • Frank Wilhoit

        Enforcement is not an option. The only way to make things “better” is to eliminate incentives for businesses to cross borders. The grass must not be, or even appear, greener on the other side of any fence. Where offshoring has been done for economically rational reasons, it has been a matter of legal or regulatory arbitrage. These cases are vastly outnumbered by those where it has been done for emotional reasons.

        So, out of the gate, we are speaking theoretically. But put enforcement out of your mind. Will not happen, has not happened, cannot happen.

  • AdamPShort

    Have you seen the coverage, now bubbling up into the mainstream, of the death of the frankincense forests?

    It’s mostly covered as an environmental issue, but the labor standards in the frankincense industry are so bad that no civilized country should allow its import in the first place.

    Clarification: “civilized” is meant to contrast with the current policy of the importing countries, not a dig against the places where frankincense is produced.

    • the labor standards in the frankincense industry are so bad that no civilized country should allow its import in the first place.

      So, if the Romans had really been civilized, it’d all be “We two kings of Orient are”?

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