Labour Standards

Interesting article at Washington Monthly on international labour standards and how big corps inspect their factories.

I have one criticism though. The author T.A. Frank says:

The problem that arose for Nike and many other companies, however, was that the media, starting in the 1990s, began to run stories on terrible labor conditions in factories in Asia. When consumers started to get angry, Nike and many other companies were nonplussed. We're just buying these shoes, they said—it's not our business how Mr. X runs his factory. And they had a point. If, for example, I learned that my dry cleaner was paying his employees less than minimum wage, I might feel bad about it, but I doubt I'd spend hours vetting alternative dry cleaners for labor compliance. I've got too much else to worry about in life, including my shirts.

I'm sorry I don't believe they have a point at all. As the writer probably knows (a former factory inspector) this is the old argument. And his analogy doesn't work. A much better one would be that in general I have been quite satisfied with my local dry cleaner but I hear that all my friends are using a dry cleaner across town that is infinitely cheaper. So I go there. Then I find out about what the dry cleaner pays - though I strongly suspected as much when I went there in the first place - but continue to use it, or switch to some other dry cleaner that charges the same price. You see, the difference between Frank's analogy and reality is the companies actively seek out the "cheaper dry cleaner." So they always have been "vetting," just for cost not labour compliance.

But overall the article is good. Nike actually comes out looking like they have taken the vast amount of criticism in the 90s to heart and, at least comparatively speaking, act reasonably. Walmart, on the other hand, are the SOBs that you would completely expect.

Comments

[space wrangler]

Nice piece...TA Franks is not an expert by any means on this... He may claim to be, but he's not.. Nike is "the worst of the worst" when it comes to child labor and "sweat shop" factories... Wal-Mart is no saint, but much more careful than NIKE..

--example-- if you have a garment or a pair of shoes in your closet right now and it's made in CHINA/
SRI-LANKA/INDONESIA/INDIA/VIETNAM/MACAU/ or any of those countries in that region... Take a bow, because you have just aided child labor and sweat shops... It's impossible to avoid, unless you buy things from Central/South America or any of the CBTPA countries..

[brian]

I certainly don't claim to be an expert and it has been awhile since I really looked into it. This is what Frank said (if you haven't clicked through) about Walmart vs Nike, specifically regarding monitoring.

Who, then, were the good actors of the trade? There are a number of them, actually, but here I'll just point out two that often surprise people. The first is Mattel, the same company that was tarnished last summer by a recall of toys that were found to have lead paint on them. Whatever the chemical flaws of their products, Mattel had a reputation among us monitors for earnestness in pressuring its suppliers to improve their labor practices. It also owned and operated a few factories in China—a country with dreadful factories—that were exemplary. These facilities were regularly inspected by independent monitors, and anyone who wants to know what they've found there can visit Mattel's Web site: the reports are public. The second unexpected company is Nike, which long ago took its bad press to heart and remade itself into a role model of how to carry out thoughtful labor monitoring. Nike has become such a leader in the field that its Web site may be the single best resource for those trying to understand the difficult business of international labor standards. Not only does Nike prescreen factories, it also discloses the name and address of every factory it uses and makes public much of its monitoring.

But let's not be confined to praise. You may get the sense that I'm not Wal-Mart's biggest fan. You'd be right. I betray no confidence here, since Wal-Mart wasn't a client of ours while I was at my company. Nevertheless, I still got to visit plenty of its supplier factories. That's because any given factory usually has more than one customer, and during an audit we would always ask the bosses to name their other customers. Wal-Mart was often one of them. And its suppliers were among the worst I saw—dangerous, nasty, and poorly paid even by local (usually Chinese) measures. I noticed that Wal-Mart claimed to require factories to maintain decent labor standards—but why did it seem to think it could find them among the lowest bidders?

Now, I know about good and bad actors mostly because I saw them directly. But ordinary consumers searching on company Web sites—Walmart.com, Nike.com, etc.—can find out almost everything they need to know just sitting at their desks. For instance, just now I learned from Wal-Mart's latest report on sourcing that only 26 percent of its audits are unannounced. By contrast, of the inspections Target conducts, 100 percent are unannounced. That's a revealing difference. And companies that do what Nike does—prescreen, build long-term relationships, disclose producers—make a point of emphasizing that fact, and are relatively transparent. Companies that don't are more guarded. (When in doubt, doubt.)

Believe me, I would be the very last one to defend Nike just for the sake of it and I'm not just taking Frank's word for it. But that all the names of where Nike does business are widely and easily available is at least an improvement.

Also, I don't necessarily agree with all his conclusions, but I think by the end of the story he mostly gets where he should.