Global Electronics Industry: The 'New Nike'

Like the garment and toy industries, the global electronics industry is outsourcing almost all its production, but has added its own special wrinkle to sweatshop manufacturing – by turning most of its work force in Mexico into “temporary help.” Thereby the electronics industry has become the “new Nike,” according to Garrett Brown, coordinator of the Maquiladora Health and Safety Support Network.

In Mexico about 240,000 men and women – or 55 or 60% of all the industry’s workers -- are employed not by the industry itself but by 60 different temporary employment agencies. This “perma-temp” status is the most precarious form of employment, with low pay and virtually no benefits, Brown writes in the July issue of the Border/Line Health & Safety bulletin.

Globally, 75% of computer products are now made by “contract manufacturers” (CMs), rather than by their “original equipment manufacturers” (OEMs). Although CMs are totally unknown to consumers, several, such as Hon Hai/Foxcom, produce billions in sales with hundreds of thousands of workers in China and other Asian countries, Brown points out.

He applies the “New Nike” label to makers of cell phones, game consoles, printers, and computers because the industry that sells them is plagued with the same sweatshop conditions that prevail in the athletic and garment companies, including:

-- excessive hours, sometimes week after week of work without a day off.
-- low pay, with the legal minimum becoming the actual pay ceiling, not the floor.
-- long delays in getting paid.
-- hefty recruitment fees that put migrant workers deeply in debt.
-- exposure to dangerous chemicals without adequate safety gear.

That’s not all:

“There is the ever-growing tsunami of electronic waste that has flooded countries like China, Ghana, and India, where it is ‘processed’ in rudimentary workshops, often by children, in ways that poison the workers and pollute the environment.”

Corporate codes of conduct? “They are always trumped on the factory floor by the ‘iron triangle’ of ever-lower prices [demanded by] suppliers, high quality benchmarks, and shortening delivery times.”

UPDATE. On July l6, Sun Danyong, 25, an employee in a Foxcom factory making Apple iPhones in Shenzhen, China, committed suicide by leaping from the 12th story of the building where he lived. A few days earlier, in a text message to his girlfriend, he said he had been beaten and humiliated by a factory security team who suspected him of stealing a prototype of a new iPhone.

In a short statement expressing regret over Sun’s death, Apple said: “We require all our suppliers treat all workers with dignity and respect.”

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USTR's initiative on worker rights

The U.S. government’s top official on trade, Ambassador Ron Kirk, has committed his White House agency to a rather ambitious goal: “a proactive enforcement strategy to save American jobs, by helping to ensure that American workers compete on a level playing field.”

Henceforth, Kirk said in a policy announced July 23, the Office of the U.S. Trade Representative (USTR) will be proactive in monitoring and enforcing the labor obligations contained in the country’s free trade agreements.

Previously, USTR’s involvement in labor violations has been largely “complaint driven.” That is, USTR usually would not get involved unless a person or a group filed a formal complaint backed with evidence persuasive enough to trigger an investigation by USTR and an inter-agency committee.

Under the new procedure, USTR, together with other agencies, principally State and Labor, will “regularly” monitor violations of worker rights and will try informally to obtain compliance. When these efforts fail, Kirk added, “USTR will not hesitate, as in other areas of trade agreement enforcement, to invoke formal dispute settlement.”

USTR and other agencies also are to undertake a positive role in promoting respect for international labor norms. Kirk mentioned China specifically as a country with which the administration “is seeking to enhance engagement” on labor issues.

Other Opportunities for Human Rights Initiatives

The USTR announcement illustrates that government officials, under their existing legal authority, and without any new legislation, have a good deal of leeway to take initiatives to enhance human rights. Opportunities abound.

Take the State Department. Among its little known responsibilities is to house the “national contact point” for the Guidelines on Multinational Corporations of the 30-nation Organization for Economic Cooperation and Development (OECD). That national contact point (NCP) handles grievances that individuals or unions have against a corporation for alleged violations of the Multinational Guidelines.

Says a report of John G. Ruggie, the UN Special Representative for Business and Human Rights: Housing the NCP within a government office that is “tasked with promoting business, trade, and investment raises questions about conflicts of interest.” In State the NCP is housed in the Office of Investment Affairs of the Economic Bureau.

In the same report, approved by the UN Council on Human Rights, Ruggie pointed out that the OECD guidelines were last updated in 2000, and suggested they could stand revision. “We’ve learned a lot about business and human rights since 2000,” he told the 2008 meeting of NCPs in Paris. State: hint, hint.

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$$ Questions that don’t get asked

Where on earth are we going to get the money to go back to the moon? to bail out another big bank? to continue paying for the wars in Iraq and in Afghanistan?

Instead of those pressing questions, we hear this one over and over and over again: Where we going to find the money to pay for health reform?

When you constantly repeat that question, to the exclusion of other budgetary questions, you disclose your priorities. When politicians and the media focus on that question, as they do, they are judging health care in a negative way: health reform is less important and needs a greater justification for the expenditure of federal dollars.

July 20, the 40th anniversary of the America’s successful landing on the moon, was a time of prideful celebration. But it should also have been good time to raise questions about the wisdom, financial and otherwise, of continuing our programs of human spaceflight.

At present NASA is on an outer space path that will cost taxpayers an estimated $100,000,000,000. In my view, it is a crazy luxury to spend that kind of money to plant a flag on Mars when we have so many urgent things to do right here on earth.

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Toxic $$ Fight Health Care Reform

A cool $177,000,000 -- that's how much the health care industry has contributed since 1989 to members of Congressional committees now drafting bills to reform the nation's health system. What kind of reform can you expect especially when the key lawmaker on health issues, Senator Max Baucus of Montana, alone collected nearly $1.500,000 from health-related companies in 2007 and 2008?

“What’s on your mind?” That’s the question my Facebook page asked me today, as on every day. And I answered with the above paragraph. The information in it is from an investigative report in this morning’s Washington Post.

The report depressed me. What a way for me to start July 21, my birthday! But thank God, I have a few ways to sound off. I need to enhance my ways of doing so. You should too.

Health care in the United States is sick, in desperate need of a comprehensive cure. But comprehensive reforms usually manage to rally private interests into well-financed coalitions against the public interest.

Where, for God’s sake, are the voices for a health care system that serves the common good? Still far too weak to overcome the power of $177,000,000.

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The Failure of the Economy -- and of the Economists

So Wall Street’s Goldman Sachs reports the highest profits in the firm’s 140-year history -- $3,440,000,000 for the second quarter of this year – and earmarks an average of about $770,000 in bonuses for each of its 29,400 employees. Meanwhile, 14,700,000 men and women in the United States are jobless, triggering an unemployment rate of 9.5 percent, the highest level in more than a quarter century.

That’s an example of an imbalance in our economic system – an imbalance that favors workers who manipulate money over those who actually produce something. In a May 29 New York Review of Books article, a leading economist, Benjamin M. Friedman, fills in some of the details of this imbalance.

Friedman does so by using a favorite tool of economists: efficiency. His article, “The Failure of the Economy & the Economists,” tracks performance in several ways, starting with profit-making:

“In recent years the financial industry has accounted for an unusually large share of all profits earned in the US economy. The share of the ‘finance’ sector in total corporate profits rose from 10 percent on average from the 1950s through the 1980s, to 22 percent in the 1990s, and an astonishing 34 percent in the first half of this decade.”

Moreover: “The finance industry’s share of U.S. wages and salaries has likewise been rising from 3 percent in the early 1950s to 7 percent in the current decade. An important question … is what fraction of the economy’s total returns to productively invested capital is absorbed up front by the financial industry as the costs of allocating that capital.”

Friedman, author of “The Moral Consequences of Economic Growth," insists that the question is important, since the total cost of the industry goes up “if this system also exposes the economy at large to episodic losses in production and incomes and to the need for taxpayer subsidies.” And that’s what’s happening now. “Today those losses are mounting, and so are the subsidies.”

Why, Friedman asks, is there so little discussion of this fundamental reality?

One reason, he says, is intellectual: the systematic failure of thinking on the part of economists. He explains that failure at some length, and presents one solution offered by economists George Akerlof and Robert Shiller: “fire the weather forecaster.”

Just to be clear: I don’t support firing economists guilty of intellectual failures. That would be inefficient. We should first give them the opportunity to participate in intensive retraining programs.

Are you laughing? I am not.

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Speaking out against nuclear weapons

There are currently almost 24,000 nuclear warheads in existence, with a destructive power equivalent to 400,000 times the power of the bomb dropped on Hiroshima in 1945. Nuclear arms account for a significant portion of global arms expenditure, which reached an all-time high of US $1,400,000,000,000 in 2008, an increase of 45% over the preceding decade.

So said the International Trade Union Confederation (ITUC), the global voice of workers in 157 countries, in launching a worldwide campaign against nuclear weapons. The campaign, run in cooperation with “Mayors for Peace,” which groups more than 2,000 cities in 130 countries, is a lead-up to the May 2010 UN review of the Nuclear Non-Proliferation Treaty (NPT).

Guy Ryder, ITUC general secretary, expressed labor’s concern “about the prospect of further nuclear proliferation, particularly in North Asia, South Asia, and the Middle East,“ and added: “The only way to deal with this is through multilateral negotiations, and the 2010 NPT review is tremendously important in that regard.”

A petition to UN Secretary General Ban Ki-moon, as well as other information, can be found on the campaign website http://www.ituc-csi.org/.

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This job market is not ‘race neutral’

In contrast to whites and Hispanics of the same age group, the wages of black workers 25 to 54 years old are continuing to sink, according to an “economic snapshot” issued July 8 by the Economic Policy Institute.

Over the last two years the weekly media wage of black workers in their prime working years dropped by 3.7% or about $23, while that of whites, Hispanics, and Asian groups of the same ages actually rose. This continues the pay shrinkage of blacks that marked the 2000-2007 business cycle, when the weekly median wage of blacks dropped 0.6%, while other groups received small increases.

The downward trend in income is a crucial element in an overall decline in the social wellbeing of African-American communities since 2000.

That development was described last year in an EPI briefing paper, “Reversal of Fortune,” by Algernon Austin, who heads the EPI program on race, ethnicity, and the economy.

Austin there emphasized the need for “a national strategy for black full employment,” with the goal of having black unemployment sustained below 5%. In May the black jobless figure was 14.7%, 16.6% for black men over 20.

Meanwhile, a popular slogan demands “race-neutral policies.” Too bad that the job market does not conform to slogans.

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Ten Challenges for American Catholics Implicit In Pope's New Encyclical

Pope Benedict XVI’s new encyclical, “Love in Truth,” like all Papal encyclicals, is not country-specific in the issues that it raises. Nor is it addressed only to Catholics. Rather, the Pope’s analysis deals with the “challenges of today’s world.” Nevertheless, many of those challenges ought to be of special concern to American Catholics, both as office-holders and as ordinary citizens of the world’s leading power.

Here is my partial list of such challenges, 10 of them, selected from among those that fall within the province of this Weblog, Human Rights for Workers. The quotes, italics included, are directly from the Vatican text.

Globalization

“The processes of globalization, suitably understood and directed, open up the unprecedented possibility of large-scale redistribution of wealth on a world-wide scale; if badly directed, however, they can lead to an increase in poverty and inequality, and could even lead to a global crisis. It is necessary to correct its malfunctions, some of them serious, that cause new divisions between peoples and within peoples, and also to ensure that the redistribution of wealth does not come about through the redistribution or increase of poverty…”

Inequalities

“The world’s wealth is growing in absolute terms, but inequalities are on the increase. In rich countries, new sectors of society are succumbing to poverty and new forms of poverty are emerging. In poorer areas, some groups enjoy a sort of ‘superdevelopment’ of a wasteful and consumerist kind which forms an unacceptable contrast with the ongoing situations of dehumanizing deprivation.”

Unemployment

“Unemployment today provokes new forms of economic marginalization, and the current crisis can only make that situation worse. Being out of work or dependent on public or private assistance for a prolonged period undermines the freedom and creativity of the person and his family and social relationships, causing great psychological and spiritual suffering. I would like to remind everyone, especially governments engaged in boosting the world’s economic and social assets, that the primary capital to be safeguarded is man, the human person in his or her integrity.”

Role of government

“The integrated economy of the present day does not make the role of States redundant, but rather it commits governments to greater collaboration with one another. Both wisdom and prudence suggest not being too precipitous in declaring the demise of the State. In terms of the resolution of the present crisis, the State’s role seems destined to grow, as it regains many of its competences.”

Unions

“Through the combination of social and economic change, trade union organizations experience greater difficulty in carrying out their task in representing the interests of workers, partly because Governments, for reasons of economic utility, often limit the freedom or the negotiating capacity of labor unions. Hence traditional networks of solidarity have more and more obstacles to overcome. The repeated calls issued within the Chuch’s social doctrine…for the promotion of workers’ associations that can defend their rights must therefore be honored today even more than in the past.”


The Market and Ethics

“Efforts are needed – and it is essential to say this – not only to create ‘ethical’ sectors or segments of the economy or the world of finance, but to ensure that the whole economy – the whole of finance – is ethical, not merely by virtue of an external label, but by its respect for requirements intrinsic to its very nature.

Rights and Duties

“Many people today would claim that they owe nothing to anyone, except themselves. They are concerned only with their rights, and they often have great difficulty in taking responsibility for their own and other people’s integral development. Hence, it is important to call for a renewed reflection on how rights presuppose duties, if they are not lo become mere license.”

Intellectual property protection

“On the part of rich countries there is an excessive zeal for protecting knowledge through an unduly rigid assertion of the right to protect intellectual property, especially in the field of health care.”

Investor responsibility

“Both the regulation of the financial sector, so as to safeguard weaker parties and discourage scandalous speculation, and the experimentation with new forms of finance, designed to support development projects, are positive experiences that should be further explored and encouraged, highlighting the responsibility of the investor.”

The Environment

“The environment is God’s gift to everyone, and in our use of it we have a responsibility towards the poor, toward future generations, and toward humanity as a whole.”
* * *
To repeat: that’s my list of 10. There certainly are other challenges that demand attention, but 10 is a nice round number, and for a blog this posting is already overly long.

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Happy Birthday, My Dear!

The birthday I’m celebrating here is that of my wife, Dzung, the 37th of her birthdays that we’ve celebrated since we married. The image on this e-card is the cover of the Vietnamese literary quarterly that she edits and publishes with a team that includes Vu Tha Hoa, an artist in Paris who contributed the cover’s painting.

Dzung and I are both writers, but she is also a poet, and much more prolific than I am. To my one book (see cover at right), she has published six. Two of her books are so moving that some people read them straight through, without even stopping for sleep. Who would ever read a book on globalization in one sitting.

Dzung felt that Co Thom’s cover doesn’t quite blend in with this blog. Yet, more technologically advanced than I am, she created a JPG file of the cover for me.

A full-page ad for Justice at Work appears in the current issue of Co Thom. As an old friend of mine has said, nepotism is okay if it stays within the family.

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Reviving the anti-sweatshop movement

“Nearly 20 years of anti-sweatshop activism has come to naught,” says a veteran campaigner against sweatshops, Jeff Ballinger. He contends, therefore, that it is urgent to try a new, more effective, strategy.

In the lead article of Dissent magazine’s summer issue, Ballinger lays out his thoughts on such a strategy. The article's title: “Finding an Anti-Sweatshop Strategy That Works.”

As an illustration of the anti-sweatshop movement’s failure, he cites a who-got-how-much breakdown of the $38 price of hoodie sold in the University of Connecticut bookstore a couple of years ago. Out of that $38, the workers in Mexico who produced it received a meager l8 cents. “The workers’ share could hardly have been lower when the movement began,” writes Ballinger, who himself helped create the movement.

From his own experience working with workers in the United States and Asia, he is convinced that to get rid of sweatshops, you have to start by helping workers “empower” themselves – get them involved in learning the facts of their vulnerable situation and the way to do something about it.

How to help under current circumstances? In Ballinger’s view, “fighting sweatshop abuses here and abroad will not be key policy undertakings of Barack Obama and his team.” He presumably means that strong anti-sweatshop legislation may get sidetracked by other priorities, such as battling for health care and financial reforms.

But even so, Ballinger insists, the executive branch has available a wide set of initiatives that it could take on its own – initiatives that “would at least begin an assault on global sweatshop practices.” That beginning should be launched by President Obama himself: “Addressing the rule of law as applied to the workplace ought to be a slam-dunk for the President and the recently re-energized State Department.”

Among the specific initiatives that Ballinger proposes for a “no-nonsense strategy” are these:

-- Expand the Bush administration’s “Trafficking in Persons” program to include workers lured to leave their Asian home countries for sweatshop jobs elsewhere in Asia.
-- Be sure to connect with real labor activists, in Asia and Central America especially.
-- Have AID missions adopt “worker empowerment” projects, such as those that involve workers themselves in using survey-research tools to gather information useful to local legal aid groups as well as to unions.
-- Have U.S. Embassies gather labor and environmental information in a more focused and systematic way, for example, by reporting meaningful details on enforcement by labor inspections.
-- In addition to raw data, gather wiki-style narratives on recent strikes, the human effect of sub-par wages, outright wage-cheating, and other pressing issues, as well as local academic papers on these issues.
-- Share information on these subjects with U.S. corporations that contract out work to local factories and offices.

Ballinger is currently finishing up work on a PhD degree, aided by a grant from the Laborers International Union. For the full text of Ballinger’s article, click here.

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The Durability of Nike’s Sweatshops

Nike is turning a blind eye to labor abuses in Vietnam factories that mass produce Nike’s athletic shoes and other sports equipment for export. That’s a finding of on-site research in Vietnam conducted after a strike last year by 20,000 workers in Nike’s supplier factories there.

A three-person team from Denmark that did the investigation spoke directly, and secretly, with the workers, including a low-level supervisor, “Mr. T,” who had presented the worker demand for a pay increase to management.

The Danish Consumer Council, which sponsored the investigation jointly with 10 other organisations, published a feature article on the research in its magazine. One specific finding is really nothing new: that the government/Communist Party apparatus of the Socialist Republic of Vietnam has its own “union,” and is hostile to any organization and worker activity independent of the government/party-run union.

What is new in the report is evidence that the Nike’s business operation within the Communist system conflicts with Nike’s own code of conduct and tarnishes its own self-image as a decent company.

A company like Nike ought to “make sure that no workers are inappropriately punished for their participation in a strike,” says Tim Connor, labor rights coordinator for Oxfam/Australia.

In Vietnam, uniformed police, called in by management, successfully broke the strike through ruthless tactics that included firing 100 leaders of an underground movement that promoted it. (Nike says there were no firings.} According to an internal Nike document and the testimony of Mr. T and others, Nike stayed on the sidelines while the police quashed the strike and the movement.

On the surface, the strike was triggered only by the demand for a living wage. Yet, as usual in such circumstances, other grievances fueled the walkout. When a worker fails to meet her production quota, for example, she is hit with a 15% deduction of her monthly pay. Workers assemble shoes with toxic glue, with a bonus for tolerating headaches and other possible effects.

For more information on the conduct of Nike and other brand-name companies, see http://www.consumersinternational.org/.

I learned of the Danish report through one of the regular contributions that Jeff Ballinger makes to lists maintained by Oxfam Australia.

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A Pope Speaks Truth to Power, But Who Listens?

In formally signing his new encyclical letter on June 29, Pope Benedict XVI said that it will return to social themes expressed by Pope Paul Vl in his encyclical “On the Development of Peoples” (Populorum Progressio) four decades ago.

That should mean that Benedict’s document, to be released July 7, during the summit meeting of G8 powers in Italy, will raise controversial issues about globalization, as Paul VI did about development. The new encyclical, Caritas in Veritas (Love in Truth), promises to be an eye-opener.

In Pope Paul’s 1987 assessment, healthy development embraces both economic and social progress. The separation of economics from “human realities” is unacceptable and results in a wide range of evils.

Among them are the “flagrant inequalities” not just in wealth but also in power among individuals. Instead, the goods of the earth should flow freely for all. All people have the “right to glean” what they need from the earth. To that basic right, “all other rights whatever they may be, including the rights of property and free trade, are to be subordinated.”

In support, Paul VI quoted the words of St. Ambrose:

“You are not making a gift of what is yours to the poor man, but you are giving him back what is his. You have been appropriating things that are meant to be for the common use of everyone. The earth belongs to everyone."

Paul VI condemned “certain concepts [that have] insinuated themselves into the fabric of human society. These concepts present profit as the chief spur to economic progress, free competition as the guiding norm of economics, and private ownership of the means of production as an absolute right, having no limits nor concomitant social obligations.”

“This unbridled liberalism,” he added, “paves the way for a particular type of tyranny, rightly condemned by our predecessor, Pius XI, for its results in the ‘international imperialism of money’.”

For Paul VI, “trade relations can no longer be based solely on the principle of free trade, unchecked competition, for it very often creates an economic dictatorship. Free trade can be called just only when it conforms to the demands of social justice.”

Just because a poor country has signed a trade deal with a rich country does not make the agreement legitimate. “When two parties are in very unequal positions, their mutual consent does not guarantee a fair contract; the rule of free consent remains subservient to the demands of the natural law.”

In his closing summary of the crisis “in all its dimensions,” Pope Paul wrote: “The moment for action has reached a critical juncture.”

That appeal was soon forgotten. If Pope Benedict returns to Pope Paul’s principles and applies them to globalization, will he receive a more positive result? Will his analysis and counsel find a place on the G8 agenda? Or on the agenda of the Catholic hierarchy of the United States?

The full text of Papal encyclicals, past and present, can be found in several languages on the Vatican website (www.vatican.va), which has a superior search engine.

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