Simon notes an interesting blog that I have seen before but don't read regularly, Asian Labour News. It's put together by Stephen Frost, who is a Research Fellow at the Southeast Asia Research Centre, part of the City University of Hong Kong, and it is described as "an online database of news about workers in Southeast Asia and China and the issues that affect them."
He has noticed an article in Reason magazine about sweatshops:
"Want to improve the lives of poor workers in developing countries? Then rush out and buy a pair of Nikes or Levi Strauss jeans"
They are suggesting that it is actually helpful to workers in Asia to buy products from well-known brands and large retailers that are sourced from Asia. The logic being that these companies pay higher wages and enforce better working conditions, and that foreign investment "is positively correlated with the right to establish free unions, the right to strike, the right to collective bargaining, and the protection of union members."
When I first visited a factory in China several years ago, I was fairly horrified by what I saw. Then, after discussing it with various people, I realized that it was not as simple as it first appeared. For one thing, most of the workers only stay for a few years, and the amount they can earn in that time is more than they could hope to earn in their home villages. For another, it isn't really appropriate to judge living or working conditions in a factory in China by the standards of Hong Kong or the UK. Yet, nevertheless, most companies could afford to provide decent accomodation for their workers and ought to pay them a decent wage.
So is it true that the large well-known companies pay better and provide better conditions for their workers?
Well, in fact these well-known companies don't normally own factories, but instead sub-contract the work to other specialist manufacturers, many of which are headquartered in Hong Kong. These companies are expected to meet the minimum standards set by their customers and also have to compete (on cost and quality) to win the business. If the big names aren't proactive in checking that these standards are actually followed, the factory owners are always going to be tempted to cut corners. I have seen production lines in China that are dedicated to producing products for one well-known company (that does carry out checks) which obviously do meet the expected standard, but I don't believe every company is as vigilant as that.
One of the obvious contradictions here is that large retailers such as Wal-Mart and Tesco are now extremely powerful and can drive a very hard bargain with their suppliers. This in turn forces those suppliers to cut costs, and often prompts them to source goods from Asia to take advantage of low labour costs. Can you simultaneously be negotiating hard on how much you pay and enforcing high standards in the factories?
In relation to the current problems with Avian Flu in Thailand, I was somewhat surprised to find that the UK imports large quantities of chicken from that country, mainly for use in processed food. I have already linked to this article from The Guardian:
"Waitrose and Marks & Spencer do not buy any chicken from outside the EU for their processed foods, but the decision not to use cheap Thai or Brazilian meat is believed to have added £10m a year to M&S's costs. Most other retailers have sourced the cheaper products."
In case you were wondering, Waitrose is a posh supermarket owned by the John Lewis Partnership. If you buy food from M&S or Waitrose you will pay higher prices, but for higher quality and closer supervision of the supply chain. However, the low prices offered by Tesco and Wal-Mart seem to be a more successful proposition, with both companies highly profitable and gaining market share. When given the choice, most consumers seem to prefer low prices.
So how can you tell which companies really care about the working conditions and salaries of factory workers in Asia and which ones are mainly concerned with cutting costs? Search me!