Southeast Asian Sweatshops High Cost for Low Price

What does a Nike running shoe, L.L. Bean knapsack, and a pair of Abercrombie and Fitch jeans have in common? Other than being important material items that make our everyday lives in first world nations easier, all of the companies aforementioned produce these goods by outsourcing to third world nations. Though these brand names may originate in a developed country (for example Abercrombie’s origin was New York, and Nike’s was Oregon) that does not mean that they produce all of their products inside the boundaries of their respective countries (Pizac 2010:1). Instead, the new economic trend for transnational corporations is to outsource to third world nations where production costs are dirt-cheap and human labor even cheaper. This process creates a massive marginal profit for first nation TNC’s and can be described as an example of neoliberal globalization because of the fact that it emphasizes the role of free market economics in outsourcing.

The sites for production are sweatshops: massive factories TNC’s establish that hire workers just as quickly as they fire them, found predominantly in southeast-Asian countries like China, Cambodia, and Vietnam. On one hand, these sites of mass production are argued to be the settings of cruel, sub-standard working conditions that subject their workers to demeaning and often dangerous tasks. On the other hand, sweatshops are argued to emphasize globalization in developing countries. Although both of these points can be argued simultaneously, the latter is simply an illusion that leads these countries into further underdevelopment. In truth the final statement is this: sweatshops are the sites of exploitation, manipulation, and intimidation that generate numerous adverse effects on the people, economy, and environment, which only aids in leading these southeast-asian countries affected into further underdevelopment.

In countries such as Vietnam, Cambodia, and China, the adverse effects of sweatshops on the labor population is clear, contributing to Asia’s new age of “Tiger Economics” where wages are low and work hours are long. One major concern of the southeast-asian sweatshop is the perception that the laborers of these developing nations can be exploited due to their dire economic situations. With an unemployment rate of 4.30% in China (Index Mundi 2010:1) and 3.5% in Cambodia (CIA World Factbook 2011:1), much of the population finds themselves desperate for any form of work. As such, the allure of working in a sweatshop for a large first nation corporation seems almost impossible to pass down. However, the appeal and promise that this work presents never lasts long.

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As an example of how sweatshop laborers are lured into work by the hope for financial sustainability and how they are later exploited, we can examine some of the major sweatshops found in southeast Asia. Workers in Victoria’s Secret sweatshops located in China are recorded to average 98 to 104 hour work weeks (working seven days a week) and only to receive one to two days off every three to four months, with zero overtime pay (Kung Michelle 2007:1). Similarly, laborers in Cambodia earn an average minimum wage of $45 per month for a 48 hour work week with no job benefits (Rarick, Charles and Firlej, Kasia 2009:66). With a salary of less than $2 a day and a modest Oriental staple of tofu, vegetables, and rice for one person costing 90 cents, the ability to nourish oneself three times daily, let alone an entire family, is an impossibility (Canada and the World Backgrounder 1997:1). To further prove this point, a 1997 survey conducted by New York businessman Thuyen Nguyen in Cambodia yielded that 35 people working in a footwear sweatshop were interviewed about the conditions they work under. Of these, 32 of the workers reported to have lost weight since beginning their work in the sweatshop (Ibid 1997:1).

Essentially, though these factory laborers do earn some cash, they still remain far below the poverty line because of their employer’s neglect and greed.

Behind the disgusting underpayment and economic exploitation of sweatshop employees lies the avarice of the first nation’s transnational corporations. By outsourcing to developing countries that are desperate for globalization such as China and Cambodia, TNC’s invest in dirt-cheap production labor of their goods while pocketing the gross amount of marginal profit. For example, a pair of Nike sneakers produced in a Cambodian sweatshop can be retailed in America for $80 while the woman who labored to make the sneakers in Cambodia was paid only $2 dollars for an entire day’s work (Canada and the World Backgrounder 1997:1). Somewhere in between these two transactions, the first nation TNC pockets $78, a marginal profit of 97%. In the end, the TNC leaves with all the benefits while the labor force of the sweatshop is exploited and trapped by an illusion of globalization.

In addition to the exploitation and manipulation that sweatshops laborers experience, workers find themselves unable to establish labor unions to fight for their rights. Those who attempt to do so in a country such as Cambodia become victims of their employers or the military government, who fire the exploited workers or simply ensure that they disappear (Canada and the World Backgrounder 1997:2). Anything that poses a threat to the authority of the company or the annual exports to first nations is viewed as something to be eliminated, a threat that could draw unwanted attention from overseas government and media. This proves to be yet another adverse effect on laborers due to the establishment of sweatshops: without the basis of a labor union to support their rights, employers may dismiss the entitlements that workers have to a sanitary working environment, safety equipment, and fair pay.

The exploitation of the labor force does not stop there however: the establishment of sweatshops in southeast-asian countries has ensured that first nation governments will turn a blind eye to the unacceptable working conditions that are experienced under the rule of major TNC’s such as Disney, Nike, and Hanes (Kim et al. 2000:5). As the world’s largest toy manufacturer, Mattel had to deliver a personal apology in 2007 to the Chinese government for harming their manufacturing reputation. Originally, Mattel blamed the Chinese’s lax safety standards for the flawed goods, but later found out it was their very own design flaw. Yet after this occurrence, people from first nations scrutinized China and its laborers for their “flawed” goods, not Mattel (Smith and Lourie 2009:24). By outsourcing to poverty-ridden countries who welcome any opportunity that would help them to enter the global marketplace, the human rights violations that take place no longer become the concern of the first world nation. The government of the developing nation merely sees these violations as the necessary steps to development, and as such, the well-being of workers becomes jeopardized.

As a result of the neglect of government, workers are forced to produce goods under unacceptable conditions. Factories are often overcrowded to ensure maximum production efficiency, and have no central air conditioning system, making the workplace unbearable (Landauro 2003:3). In Beijing, China, laborers are forced to work in a smoggy setting where the air quality is below standard for an average of 272 days a year (Canada and the World Backgrounder 1997:2). Frequently, sweatshop employees are neglected proper safety equipment which result frequently in workers being “…severely burned or mutilated in the workplace” (Individual Faculty Members and Students of MIT 2001:1). In addition, racial and

gender discrimination play a large role in the reality of the Southeast-Asian sweatshops: women laborers can be forced by their employers to abort their pregnancies and are often subject to

vicious sexual assaults (Bullman 2003:1019). Since an average of 70%-90% of the sweatshop labor force is women (Mann 2000:1), this is not an uncommon occurrence. Even more so, because they are not aloud a union to enforce their labor rights, many of these cases are left unaddressed.

Because of this lack of safety precautions taken by employers, laborers almost always leave their time as a sweatshop worker with extensive health burdens, including exposure to “…noxious fumes, organophosphate compounds, and silica dust, resulting in record high cancer, asthma, bronchitis, pneumoconiosis, and leukemia [rates]…” (Kim et al. 2000:3). Those women that do manage to keep their pregnancies from the atrocities aforementioned often give birth to children with birth defects because of the toxic chemicals that are handled or inhaled in the workplace (Bullman 2003:1029). Sadly, with no labor union available to enforce the human rights code, workers are almost always left without monetary compensation for their extensive injuries and health complications to die in the poverty they tried so hard to escape from.

Due to severe exploitation, arbitrary discipline, poor working conditions, and general nonchalant attitude towards the well-being of workers, southeast-asian sweatshops have had a traumatizing effect on the health and well-being of laborers. Not only do laborers earn a wage that is impossible to survive on, they are also subject to permanent health issues from the work environment they are immersed in, and face daily intimidation from their employers in the form of sexual, verbal, and physical assault (Cray 2001:1). Though we would never imagine that this

is the amount of pain and misery workers endure to make our shoes and clothes, the adverse effects of sweatshops do not stop at the workers of the developing nation.

Though many CEO’s of TNC’s argue that sweatshops are benefit developing nations by encouraging employment and allowing the country they are established in to gain power in the world market by comparative advantage (Krugman 1997:5), this simply proves as an illusion. In fact, sweatshops contribute to numerous adverse effects on the economy of developing countries. This can be explained using Frank’s satellite metropolis model, where the satellites (developing nations) form a bond with the metropolis (first nation TNC). As the bond between the two is enforced with the establishment of more sweatshops in the developing country, the dependency of the satellite on the metropolis grows, and the prospects of globalization become severely depleted. With all of the profit generated from sweatshop production being leached back into first nation countries by capitalist TNC’s, the third world country remains stuck in an eternal poverty, with no hope of globalization and development because of their connections to the metropolis.

To extrapolate this argument further, we can look at the hallmarks of underdevelopment and compare them to the economic situation of southeast-asian countries that are riddled with sweatshops. Firstly, we can examine eternal oriented production: Jiangsu and Guangdong provinces in China, for example, are the sites of the world’s leading denim producing sweatshops for TNC’s such as Levi’s and Tommy Hilfiger. With the use of factories such as the No. 1 Cotton Textile Factory in Guangdong province, China becomes responsible for exporting 1.26 billion meters of denim fabric each year (Agarwal 2010:1). However, the production of these goods calls for technology that can not be made in such a poor country, therefore causing the already

poor country to have to import technology from the metropolis. By producing goods that a poverty infused country can not afford and having to export them for cheap, and the constant need to bring high-value imports (e.g. technology) into the country, we can prove that the

establishment of sweatshops is responsible for the economic underdevelopment of southeast-asian countries.

In continuation, the element of investment concentration can be examined in order to support how sweatshops have adverse economic effects on the economy and prospective development of developing nations. The concentration of the TNC’s investment into only a few poor countries ensures that they will be able to extract the maximum amount of marginal profit from these countries and reinvest it back into their own organization. A given example of this are the Victoria’s Secret sweatshops found mainly in China and Vietnam where a bra can be produced for $3 in a sweatshop and then sold at a retail value of $37, generating a marginal profit of $34 or 91% for the first world corporation (Kung 2007:2). From this, we can see how the establishment of sweatshops in southeast-asian countries has allowed for major first world companies to extort profit and create transactional ties with them, which although promise to support and aid in the globalization process, actually ensure that they remain dependent on their investment and stay economically underdeveloped.

Though we have examined both how sweatshops affect both the people and economy of underdeveloped southeast-asian countries, one more concern is to be explored: the negative effects that these production sites have on the environment. According to the Chinese Ministry for Environmental Protection, denim sweatshops in China alone discharge 7.5% of national wastewater (Agarwal 2010:1). As a result, major waterways and marine ecosystems, such as the

Pearl Delta River, have been desecrated and deemed as some of “…the most polluted areas in China” (Ibid 2010:1). Green production is not an option either: in countries that do not have the economic resources, many use coal as a cheap method to power their factories, accounting for a mixture of “…climate changing gases and toxic chemicals” that leak into the environment (Barboza and Bradsher 2006:1).When these byproducts of coal combustion, sulphur, and carbon mingle with the atmosphere, they can form large “clouds” of pollutants that can be carried thousands of miles by trade winds. As a result, in April of 2010 U.S. researchers from Oregon and Washington discovered one of these clouds as it was passing into the West Coast of the United States. Upon examining the mountaintop detectors that alerted them to the migrating cloud’s presence, they were alarmed to find a variety of carcinogens and byproducts of coal combustion that are linked to respiratory damage, heart disease, and cancer (Barboza and Bradsher 2006:1).

Yet another environmental concern arising from the implementation of sweatshops is the amount of carbon dioxide emanating from these factories. While the concentration of sulfur a sweatshop releases may not hold long term consequences on the planet, carbon dioxide has a cumulative effect which continues to build for generations. With this massive build-up of carbon dioxide in the atmosphere, the process of global warming will be sped up, which could result in “…the rising of sea levels, the spread of tropical diseases in previously temperate climates, [and] crop failures…” (Barboza and Bradsher 2006:1). Considering China’s coal consumption has risen by 14% in the past two years, this does not seem like a lofty concern either. Though China’s leaders promise to attempt to reduce their deadly emissions, the only method of doing so would be to bring in more advanced technology from first world countries, which would involve

deepening their ties with the metropolis, putting the developing nation into further underdevelopment (Chinese Ministry for Environmental Protection 2009:7). Due to the unsafe amount of toxic emissions that enter the atmosphere and threaten the planet, sweatshops only generate negative effects on the environment that destroy our air and freshwater and hinder our efforts to conserve the planet and our natural resources.

From the effects that sweatshops have on the people, economy, and environment of southeast-asian countries, we can draw the conclusion that sweatshops generate only adverse effects and hinder the development and globalization of nations attempting to globalize. Though the establishment of these factories seems almost inevitable with the avarice and self-interest of today’s first nation TNC rising, the general population should keep in mind the effects that countries such as China, Cambodia, Vietnam, and Saipan will experience in making their pair of socks, shoes, or sweatpants by outsourcing. I can guarantee that once the evidence presented in this paper is weighed both morally and intellectually, you will find that the hefty cost is not defined by the price tag, but by the consequences that developing southeast-asian countries face. With this understanding of sweatshops, comprehending how some countries cannot develop and the risks they must take in order to globalize themselves and gain power in the world market becomes clearer. Though we never think about where every article of clothing, toy, and fabric is made, the reality is that as first world consumers, we are doing more harm to the southeast-asian countries then we could ever imagine. One thing is for sure: as long as sweatshops are running, there is no hope for the globalization of southeast-asian countries.