Jane Sternbach-- Economic Globalization Response

Jane Sternbach

2/20/12

Globalizaiton

Response to Economic Globalization

            The idea that sweatshops could, in fact, be more helpful than harmful is an intriguing one, and it’s hard for me to really pass judgment because I know so little about economic theory. However, I do think that the economists who are interviewed in the Kristof, Myerson, and Stossel pieces are glossing over a large piece of the puzzle, and focusing on the short-term gains that can be achieved through these sweatshops. The fact is that these companies, mostly American and European companies, are setting up these factories in other companies in order to keep the price of their product down while simultaneously stuffing their own pockets at an increasing rate. Therefore, the people who are truly benefiting are the American capitalists, and no one else. The fact that these companies can go abroad for cheaper labor, leaves American workers without jobs. But since Americans are the main consumer market for the goods that these sweatshops are producing, Americans and America is going into debt (despite being one of the wealthiest countries in the world). The income disparity is increasing and we are finding all the power and resources concentrated in fewer and fewer American hands. Then if we look at the countries that are producing these goods in sweatshops, it seems to be a similar situation. What I do remember from microeconomics, is that the capitalist system is based on the idea that a company invests capital into a factory, and pays the workers, so that they can then go out and buy the product that they are making, but the owners of the company are looking to make a net profit only after reinvesting part of the total profit in the company and infrastructure and technology, etc. Therefore, if the owners of the companies have no real stake in the economy of the country that their factories are in, they don’t have to invest as much of the total profit to keep the cycle going, which makes their pockets deeper. In other words, these companies are really taking all of the potential wealth out of these countries and putting them in the hands of the American capitalists.

            Also, because the nature of sweatshop jobs is unskilled labor, the people performing the labor have no leverage to bargain for better conditions, hours, or wages. Since they are making below subsistence level wages, the job is maybe keeping them fed, but can’t possibly raise them out of poverty. The nature of this work is to pay just enough to force you to keep the job, but little enough to keep you from being able to attain anything better. In the Stossel piece, one economist said that these workers work in the factories for a while and then they open up their own businesses. I find this incredibly hard to believe. Working in a sweatshop does not teach you anything about owning or running you own business; it doesn’t even teach you anything about how to produce a product because all you are shown is your very specific task in the assembly line. If you are an illiterate migrant worker, there is no way that you are able to leave work in a sweatshop and become your own boss, especially when you are not even accumulating any capital  (because you are earning less than subsistence wages), let alone have no skill or know-how or education! In addition, even if such a thing were possible, and a factory worker started his/her own business, he/she wouldn’t be able to compete with the prices of the multinational corporate conglomerates, so back to the assembly line that person would go.

            Another thing that I had an issue with was the fact that these economists were surprised that anyone could consider sweatshop work exploitation. Just because sweatshop work for many of the people who are working in them is the better alternative does not mean they are not being exploited. The fact that a Javanese woman needs to work for three hours to earn enough for one bar of soap is obviously exploitation! The dictionary definition of exploitation is “the action or fact of treating someone unfairly in order to benefit from their work.” This means that if a company is not giving their workers a wage that is somewhat comparable to the value of their work to the production process, then those workers are being exploited. Exploitation is inherent in the capitalist system. The reason that the companies are decided to go abroad for labor in the first place is because exploiting Americans became too difficult. I couldn’t believe it when Kristof wrote, “One of the best things America could do for Africa would be to strengthen our program to encourage African imports, called AGOA, and nudge Europe to match it.” In other words, he is suggesting that Americans not only exploit Africans further, but encourage other countries to partake as well! This is particularly surprising because of the long history Americans have in area of exploiting African people for their labor.  I would think that it would obvious that Americans and Europeans owning and controlling African labor would be a bad thing…

            Something else that Kristof said that bothered me was, “but one result of paying above-market wages is that those in charge of hiring often demand bribes — sometimes a month’s salary — in exchange for a job.” His solution to this was that companies should clearly keep their wages down. In my mind, the obvious solution is that if market wages were raised to subsistence level, this wouldn’t be an issue! In other words, raise all the wages so there is no need to compete for these “above-market wages” (which were probably still below subsistence level). This is an idea that Stossel made the college students look stupid for asking for, but is seems perfectly logical to me. The ideal situation would be that these workers would get paid at least enough to live and support their families, the price of the product wouldn’t go up, and the American company owners would go home with their pockets a little less full.

            The fact that, as Salzinger and Wolf explain, gender is used as a justification for low wages even further proves the point that this system is in fact exploitative. If women are the justification for low wages, then the system is operating under some form of patriarchy. Who benefits from patriarchy?  Men. Why is patriarchy necessary in the first place? To perpetuate the cycle of capitalism and keep the men in the bourgeoisie with all the power, and the women oppressed as a form of cheap labor. The same reason we “need” racism.

            Something I found especially interesting about Salzinger’s analysis of the gender discourse in mexico, is how it was the exact opposite of what I was taught about gender and labor. For example, she talks about how women are the sought after workers, to the point where the companies can’t seem to find enough of them to fill their factories, and when they went on strike, demanding more pay, they brought in men as strike breakers. This is the opposite of the stories I learned in history of men fighting to organize and companies bringing in women because they were willing to work for less.