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Bad jobs at bad wages are better than no jobs at all.For many years a
huge Manila garbage dump known as Smokey Mountain was a favourite media symbol
of Third World poverty. Several thousand men, women, and children lived on that
dump--enduring the stench, the flies, and the toxic waste in order to make a
living combing the garbage for scrap metal and other recyclables. And they lived
there voluntarily, because the $10 or so a squatter family could clear in a day
was better than the alternatives. The squatters are gone now, forcibly removed by Philippine
police last year as a cosmetic move in advance of a Pacific Rim summit. But I
found myself thinking about Smokey Mountain recently, after reading my latest
batch of hate mail. The occasion was an op-ed piece I had written for the New
York Times, in which I had pointed out that while wages and working
conditions in the new export industries of the Third World are appalling, they
are a big improvement over the "previous, less visible rural poverty."
I guess I should have expected that this comment would generate letters along
the lines of, "Well, if you lose your comfortable position as an American
professor you can always find another job--as long as you are 12 years old and
willing to work for 40 cents an hour." Such moral outrage is common among the opponents of
globalisation--of the transfer of technology and capital from high-wage to
low-wage countries and the resulting growth of labor-intensive Third World
exports. These critics take it as a given that anyone with a good word for this
process is naive or corrupt and, in either case, a de facto agent of global
capital in its oppression of workers here and abroad. But matters are not that simple, and the moral lines are
not that clear. In fact, let me make a counter-accusation: The lofty moral tone
of the opponents of globalisation is possible only because they have chosen not
to think their position through. While fat-cat capitalists might benefit from
globalisation, the biggest beneficiaries are, yes, Third World workers. After
all, global poverty is not something recently invented for the benefit of
multinational corporations. Let's turn the clock back to the Third World as it
was only two decades ago (and still is, in many countries). In those days,
although the rapid economic growth of a handful of small Asian nations had
started to attract attention, developing countries like Indonesia or Bangladesh
were still mainly what they had always been: exporters of raw materials,
importers of manufactures. Inefficient manufacturing sectors served their
domestic markets, sheltered behind import quotas, but generated few jobs.
Meanwhile, population pressure pushed desperate peasants into cultivating ever
more marginal land or seeking a livelihood in any way possible--such as
homesteading on a mountain of garbage. Given this lack of other opportunities, you could hire
workers in Jakarta or Manila for a pittance. But in the mid-'70s, cheap labour
was not enough to allow a developing country to compete in world markets for
manufactured goods. The entrenched advantages of advanced nations--their
infrastructure and technical know-how, the vastly larger size of their markets
and their proximity to suppliers of key components, their political stability
and the subtle-but-crucial social adaptations that are necessary to operate an
efficient economy--seemed to outweigh even a ten fold or twenty fold disparity
in wage rates. And
then something changed. Some combination of factors that we
still don't fully understand--lower tariff barriers, improved
telecommunications, cheaper air transport--reduced the disadvantages of
producing in developing countries. (Other things being the same, it is still
better to produce in the First World--stories of companies that moved production
to Mexico or East Asia, then moved back after experiencing the disadvantages of
the Third World environment, are common.) In a substantial number of industries,
low wages allowed developing countries to break into world markets. And so
countries that had previously made a living selling jute or coffee started
producing shirts and sneakers instead. Workers in those shirt and sneaker factories are,
inevitably, paid very little and expected to endure terrible working conditions.
I say "inevitably" because their employers are not in business for
their (or their workers') health; they pay as little as possible, and that
minimum is determined by the other opportunities available to workers. And these
are still extremely poor countries, where living on a garbage heap is attractive
compared with the alternatives. And
yet, wherever the new export industries have grown, there has been measurable
improvement in the lives of ordinary people. Partly this is because a growing
industry must offer a somewhat higher wage than workers could get elsewhere in
order to get them to move. More importantly, however, the growth of
manufacturing--and of the penumbra of other jobs that the new export sector
creates--has a ripple effect throughout the economy. The pressure on the land
becomes less intense, so rural wages rise; the pool of unemployed urban dwellers
always anxious for work shrinks, so factories start to compete with each other
for workers, and urban wages also begin to rise. Where the process has gone on
long enough--say, in South Korea or Taiwan--average wages start to approach what
an American teen-ager can earn at McDonald's. And eventually people are no
longer eager to live on garbage dumps. (Smokey Mountain persisted because the
Philippines, until recently, did not share in the export-led growth of its
neighbours. Jobs that pay better than scavenging are still few and far between.) The benefits of export-led economic growth to the mass of
people in the newly industrializing economies are not a matter of conjecture. A
country like Indonesia is still so poor that progress can be measured in terms
of how much the average person gets to eat; since 1970, per capita intake has
risen from less than 2,100 to more than 2,800 calories a day. A shocking
one-third of young children are still malnourished--but in 1975, the fraction
was more than half. Similar improvements can be seen throughout the Pacific Rim,
and even in places like Bangladesh. These improvements have not taken place
because well-meaning people in the West have done anything to help--foreign aid,
never large, has lately shrunk to virtually nothing. Nor is it the result of the
benign policies of national governments, which are as callous and corrupt as
ever. It is the indirect and unintended result of the actions of soulless
multinationals and rapacious local entrepreneurs, whose only concern was to take
advantage of the profit opportunities offered by cheap labor. It is not an
edifying spectacle; but no matter how base the motives of those involved, the
result has been to move hundreds of millions of people from abject poverty to
something still awful but nonetheless significantly better. Why,
then, the outrage of my correspondents? Why does the image of an Indonesian
sewing sneakers for 60 cents an hour evoke so much more feeling than the image
of another Indonesian earning the equivalent of 30 cents an hour trying to feed
his family on a tiny plot of land--or of a Filipino scavenging on a garbage
heap? The main answer, I think, is a sort of fastidiousness.
Unlike the starving subsistence farmer, the women and children in the sneaker
factory are working at slave wages for our benefit--and this makes us
feel unclean. And so there are self-righteous demands for international labour
standards: We should not, the opponents of globalisation insist, be willing to
buy those sneakers and shirts unless the people who make them receive decent
wages and work under decent conditions. This sounds only fair--but is it? Let's think through the
consequences. First
of all, even if we could assure the workers in Third World export industries of
higher wages and better working conditions, this would do nothing for the
peasants, day labourers, scavengers, and so on who make up the bulk of these
countries' populations. At best, forcing developing countries to adhere to our
labour standards would create a privileged labour aristocracy, leaving the poor
majority no better off. And it might not even do that. The advantages of
established First World industries are still formidable. The only reason
developing countries have been able to compete with those industries is their
ability to offer employers cheap labour. Deny them that ability, and you might
well deny them the prospect of continuing industrial growth, even reverse the
growth that has been achieved. And since export-oriented growth, for all its
injustice, has been a huge boon for the workers in those nations, anything that
curtails that growth is very much against their interests. A policy of good jobs
in principle, but no jobs in practice, might assuage our consciences, but it is
no favour to its alleged beneficiaries. You
may say that the wretched of the earth should not be forced to serve as hewers
of wood, drawers of water, and sewers of sneakers for the affluent. But what is
the alternative? Should they be helped with foreign aid? Maybe--although the
historical record of regions like southern Italy suggests that such aid has a
tendency to promote perpetual dependence. Anyway, there isn't the slightest
prospect of significant aid materializing. Should their own governments provide
more social justice? Of course--but they won't, or at least not because we tell
them to. And as long as you have no realistic alternative to industrialization
based on low wages, to oppose it means that you are willing to deny desperately
poor people the best chance they have of progress for the sake of what amounts
to an aesthetic standard--that is, the fact that you don't like the idea of
workers being paid a pittance to supply rich Westerners with fashion items. In short, my correspondents are not entitled to their
self-righteousness. They have not thought the matter through. And when the hopes
of hundreds of millions are at stake, thinking things through is not just good
intellectual practice. It is a moral duty. By Paul Krugman 1997
Reprinted from Slate.com |
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