Henry Ford, Privilege and Gayness

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In 1913, Henry Ford started paying his workers $5 per day, a huge amount for the time and a more than 100% raise from what they were previously earning. It’s seen as a milestone in modern capitalism, the moment when employers realized that workers were also consumers, that raising their wages created a generation that would buy as well as work.

Last week in London I randomly read The Greatest Business Decisions of All Time, which has a chapter on Ford’s decision and some of the unsightly details of how he rolled it out.

It came with some strings attached. The headline pay was divided into two parts: wages (about $2.40 per day for an unskilled worker) and “profits” (about $2.60 per day). All workers received wages for their work at Highland Park, but they shared in the profits only if they were deemed worthy. Six months’ service was required to qualify.

Married men were eligible, as were men under the age of 22 who were supporting widowed mothers or brothers and sisters. All women supporting families also qualified. But unmarried women and men who were not supporting dependents were excluded.

Ford made it clear that a “clean, sober, and industrious life” was required to receive the higher pay. An employee had to demonstrate that he did not drink alcohol or abuse his family. Moreover, he had to make regular deposits in a savings account, maintain a clean home, and be of upstanding moral character.

Workers who accepted the new wage would also be subject to company rules about how to conduct themselves during off-hours. As Ford explained it, “The object was simply to better the financial and moral status of the men.”

To enforce his lifestyle dictates, Ford mobilized an army of investigators that at one point numbered 200. They were expected, Lacey writes, “to make at least a dozen house calls every day, checking off information about marital status, religion, citizenship, savings, health, hobbies, life insurance, and countless other questions.” To help them meet their quotas, Ford provided each inspector with a new Model T, a driver, and an interpreter for help in ethnic neighborhoods.

I know this sort of thing isn’t all that surprising, but it really does bum me the fuck out. This is exactly what people mean when they talk about privilege. Here was one of the best jobs, in one of the nation’s most economically dynamic cities, and it was only open to men who were the right religion, the right background, who passed the similarity test by their bosses.

I remember chatting with a retired government worker from Belfast at a conference a few years ago who told me that he had a set of interview questions to determine which candidates were Protestants and which ones were Catholics. What primary school did they attend? What neighborhood did they grow up in? What sort of work did their parents do?

It’s appalling, this, not to mention wasteful, and it makes me wonder the ways we do this now. As a gay person, I always feel a bit guilty about the fact that I’ve never experienced any discrimination directly. I’m pretty invisible; by the time people find out I’m gay I’m usually hired.

We talk a lot in this country about how quickly we’ve all made the turnaround on gay rights, and I wonder how much has to do with gay people’s ability to pass these little tests. We were already in the boardrooms and behind the judicial benches way before it was safe to do. Once it was, we had friends and colleagues who had a financial incentive in keeping us there. Most other marginalized groups never get that chance.

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Fitness, Marketing and the Search for Shortcuts

One of the weirdest things about my visit to the U.S. was all the comments I got on how I look. Once or twice a week, some random person would come up to me and ask me about my workout routine.

At the gym, 7 in the morning, this guy in his early 40s stops me as I’m leaving.

“Hey kid, I’ve got a question,” he says.

“Um, I’m 33…” I say.

“What do you do, or not do, to look like that?”

This happened other places too. A member of my rock climbing club invites me to dinner, asks me what—‘if anything’—I’m allowed to eat. A barista asks what diet I’m on, whether I do yoga. I order a drip coffee and he says ‘I guess you’re not allowed to drink Frappuccinos, huh?’

The first weird thing about these comments is that I’m not in very good shape. As I’ve chronicled here extensively, I don’t go to the gym with any kind of strategy or diligence. My eating habits are more Jurassic Park than Julia Child. Even with the dimmest of lighting, the generous-est of Instagram filters, I don’t even have one pack, much less six.

The second weird thing is how these compliments always came in the form of a question, as if I know something other people don’t. The guy at the gym that morning, he wanted to know exactly what my eating and exercise routine was, like there was some technique I had mastered or secret vegetable I was growing in my backyard. Even my friends, people I’ve known since I was 10, familiar with my indolence, my sitting-down tummyrolls, press me: “Come on, you’re drinking protein shakes, right?”

I never get comments like this when I’m in Europe. Ever. The obvious reason for this is because I’m closer to the median BMI there, plus so many standard deviations below the median height that no one even notices what kind of shape I’m in. But I’m convinced there’s something else going on too: Europeans aren’t marketed to as much as Americans.

I have no, like, data-data on this, but after living on both continents, I really notice how much more intermingled fitness and commerce are in the United States. In Copenhagen, everyone you see cycling has a modest, slightly rusted old bike. Men ride upright on ladybikes, women roll to work wearing jeans and high heels. In the U.S. it’s all titanium frames, spandex, shoes with those little clips on the toe. In Berlin, jogging is something you do in old sweatpants. In the U.S., it’s an activity that requires moisture-wicking pants and barefoot shoes.

It’s like this with diet too. Americans have entire categories of foods that Europeans don’t. Omega 3 energy bars, creatine powder, recovery drinks. Somehow we went straight from making these up to believing it was impossible to be in shape without them.

This, I feel like, is where the ‘what do you do, man?’ from baristas and fellow gymmers comes from. People think there’s a trick, a shortcut, a specific thing I’m eating or drinking or doing that keeps me (relatively) height-weight proportionate. Like I’m gonna say ‘asparagus water!’ and that will unlock the secret for everyone else.

That’s what marketing has sold us: Not a specific product, but the idea that there’s one we’re missing. Our bodies are set up to respond to our habits, the decisions we make 80 percent of the time. The economy, however, is set up to sell us something new every day, to feed us ‘superfoods‘, to sign us up for Crossfit, to tell us again and again that fit people don’t have better genes or routines, but make better purchases.

Like I said, I’m not in good enough shape to give out food or fitness advice, but what I told the Americans who asked me about my workout regime the last few weeks was that I try to eat lots of fruits and vegetables and do something exercisey that I like every day.

“Shit,” the guy at the gym said that morning. “I was afraid you were going to say that.”

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‘I literally saw a naked baby standing in a pool of water’: Eleven observations from a contract manufacturer in China

I know I’m belaboring these now, but I’m learning a lot from all the people writing in to add points and arguments to my Myth of the Ethical Shopper article. Here’s one from Glen, a project manager at a contract manufacturer in Shenzhen:

Awareness is the first step, and this article does an excellent job of pointing out that contract manufacturing will always result in unfair labor practices. The smaller companies are the biggest offenders because their order sizes don’t warrant the attention of “golden factories”. Not that Apple and Wal-Mart are good examples, but their manufacturing is some of the cleanest out there… After working for a contract manufacturer in China for several years, I can give you a quick glimpse of how it looks in China in relation to this article:

1) Wal-Mart gets caught with unfair labor practices > people protest > Policy reform

These reforms are pushed on factories that really want to improve, but mostly they want the business. They reform simply to keep the business.

2) Factories conform to reforms > operation costs at factories go up > Factories lose money

Making these changes and being socially compliant come at a HUGE cost to the factory, but larger customers will not accept the increased costs to reflect in their orders. Suddenly, factories are losing a lot of money, but they can’t lose Wal-Mart as a customer. Most Wal-Mart-contracted factories operate at zero margins just for the business. They’ll use the molds to remake products under other brands to sell in China.

3) Factory finds cheaper factory to do their production

The original factory might do 20% of the order, but they’ll contract “shadow factories” to do the bulk. These are your “sweatshops”, they don’t exist on paper, but they make up easily 95% of the factories out there. Now, the large Wal-Mart orders can once again turn a profit, because costs are reduced by manufacturing at the shadow factories.

4) Factory becomes an audit mill.

Passing an audit is a big deal, especially the strict standards of Wal-Mart compliance. The factory can now make large sums of money fronting for other companies and factories. They will host audits on a regular basis, to give compliance to hundreds of other companies. A company might not even have a factory, but they’ll get compliance to make products. Now they can make products wherever they want, and when it comes time they can set up their front at the fake factory. Most companies do this.

5) No reason for factories to TRULY conform to regulations

Now that these workarounds are in place, it’s quite easy to get certified without even having a factory. So now that most factories are off the map, they have no incentive whatsoever to follow anything close to standards being set in the USA. Everyone is protected by the “golden factories” that are running fake audits and essentially covering for the ones doing real production runs. Foxconn is a golden factory. Their conditions are incredible compared to those of 99.9% of factories in China. In over 4 years working in China I have never set foot in a factory that is as clean and compliant as Foxconn.

6) Audit companies get in the game as well.

For MANY if not MOST inspection companies in China you can’t pass an audit unless you pay a bribe. Usually $1000/inspector is enough. Even if your factory really is perfect, you need to pay off inspectors to get the certification.

7) American companies have no control

US companies might know this is happening, or not…. it really doesn’t make a difference. Companies that are aware will distance themselves intentionally so that they’re not liable or seen as negligent. Companies that aren’t aware really truly believe that they are covering their bases.

8) The danger of trade companies passing an audit.

Our trade company passed the [Shoe Company Inc.] audit on a factory that doesn’t exist (we used the name of our company as the factory and the inspection took place at a factory we contracted specifically for a social compliance audit). Now that the trade company has passed this certification, we can make products ANYWHERE. It’s a step beyond the factory using contract manufacturers. Most trade companies are lying to their customers, so it’s incredibly difficult to know if you’re working with a trade company or a real factory. In my experience it’s almost always a trade company if you don’t have boots in the ground in China.

9) When a company issues a RFP (request for proposal), they are essentially GUARANTEEING that their products will be made in some of the nastiest ways possible.

This is very common for companies in our space, sports accessories. Companies like [Shoe Company Inc.] will essentially say some requirements for a product, and they’ll send that to all of their licensees. Those with licensing rights to the brand will contact their suppliers to have them compete for the best prices. Trade companies are typically the supplier they contact, and those trade companies will contact all of their connections for the best price. RFPs are are designed so that the companies like New Balance will get the best and cheapest deals for the required products they need. It’s a beautiful system for the brand, because they do no sourcing whatsoever, and they hold no responsibility whatsoever on how the product is being made.

10) Trade companies intentionally used as a buffer.

I don’t think this is news to you, but some companies with use trade companies because they understand the process. This will keep them legally exempt from issues and can blame the trade company for hoaxing them on their labor practices. A lot of companies know this and I’ve had several people tell me to just “do what we do” to make sure things work on our end.

11) The yoga mat industry in China is disgusting

Just a comment to add here. I did a sourcing project for a [Shoe Company Inc.] request for yoga mats. The factories I saw we’re disgusting. I literally saw a naked baby standing in a pool of water just yards away from where the finished goods were being stacked. These were all TPE yoga mats, and I found it ridiculous that in the factory they were printing logos that said “eco-friendly”. Anything that is so simple to make is going to eventually make its way to these kind of factories.

I chose not to use that factory and instead went with a better factory (still wouldn’t pass an audit, but who does?) for the proposal. We didn’t get the business, it was beyond their budget. Had I used the prior factory we would have fallen within their price target…

This is the current state of things. There isn’t an easy fix. There aren’t regulations to solve this. All I know is that with more awareness solutions will be worked out in the future. I know a lot of these points were made in the article, but I felt they needed repeating. These are truths that I wish all consumers could know and understand.

Go read Glen’s blog it’s hella good!

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‘Tell me something interesting about yourself’: A gay dating app experiment

Six weeks ago, I changed my Grindr status to “Instead of ‘hey’, feel free to start by telling me something interesting about yourself!”

I got, shall we say, a variety of responses.

Some of them shared a little

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Some of them shared a lot

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Some of them were educational

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Some of them wanted to get the icebreaker out of the way

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Some of them diversified their portfolio

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Some of them seem like we would be friends

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Some of them went to Oberlin

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Some of them could write a great blog

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Some of them got meta

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Some of them were having a stroke

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Some of them taught me about my own shortcomings

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Some of them have busy Christmases

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Some of them needed a hug and hot cocoa

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Some of them spoke in intriguing metaphors

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Some of them had MBAs

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Some of them sent dick pics

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Some of them did better on their second attempt

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Some of them required follow-ups

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Some of them misunderstood the assignment

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Some of them would have made fascinating conversation partners

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Some of them humblebragged

IMG_0119 Some of them gave good backstory

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Some of them confirmed negative stereotypes

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Some of them read their horoscope every morning

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One of them, at least, was husband material

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One more response to my article

In my Solutions Journalism network interview I said

I talked to someone at a well-known labor NGO about this and he said he has three staff members. The best way to stretch that into impact is to go after Apple, which can improve conditions for hundreds of thousands of employees with a snap of its fingers. Or at least that’s the perception. Individually it’s understandable. But collectively, it means no one is looking at where the worst violations are.

The next day I got an e-mail from Kevin Slaten, a Program Coordinator at China Labor Watch. He’s the guy I was talking about. Here’s what he said. 

I did not say that we just focus on Apple, Michael. We focus on companies that have major buying influence in a given factory or industry supply chain–which includes Apple, among many other buyers which CLW has reported on over the past 15 years. Look at CLW’s report database for a list of reports by industry and related brand companies.

While I understand the general point you are making–lots of manufacturing takes place in small firms–you failed to mention the sectoral (or even broad economic) pull-on effect from raising the bar among large groups of workers: it changes the expectations and demands of other workers. We talked explicitly about this logic. (An additional academic paper bearing out this point.)

For example, ever since the Yue Yuen show factory strike in April 2014, in which as many as 60,000 workers demanded arrears on years of unpaid insurance, workers all around the region (and even throughout China) have increasing protested over this exact issue. Workers’ consciousness has been shifted. 

Another example: when I did field work for my MA in NE China (on labor rights defense), workers in an industrial zone (with hundreds of thousands or millions of workers) from different companies would talk knowledgeably about their working conditions relative to the industry or region. This caused many people I interviewed to “vote with their feet” and find better work. It radicalized others to protest. 

To put it in the terms you used: workers in smaller and more abusive plants are more likely to protest or find a new job (starving the poorer plants of labor) if those workers believe that there are better conditions elsewhere. In this interview (and in your article) you focus on the concept of increasing amounts of products going to countries whose consumers seem to “care less” about sweatshops. Putting aside the factual accuracy of this statement for now (there have been lots of anti-sweatshop protests in Taiwan, HK, and elsewhere in E. Asia), it ignores the power of improving working conditions at key locations within an industry. 

Anyway, most of the above information is context. My reservation is with your characterization of our interview. Your description suggests that our organization just focuses on Apple; this is not an accurate characterization of the interview or CLW’s work.  

Sorry to Slaten for mischaracterizing our interview. He’s right, their reports offer a lot of nuance I didn’t capture in my piece. Go read ’em!

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So You Say You’re an Ethical Shopper

Tigray, Ethiopia. Photo by me.

Tigray, Ethiopia. Photo by me.

Here’s another follow-up to my article, originally posted on the Huffington Post.

So on Wednesday I wrote this article for Highline arguing that consumer movements are never going to end sweatshops. The worst conditions are in sub-contractors, small workshops and factories producing for emerging markets. We can lean on multinational corporations all we want, they don’t have the information or the power to ensure decent factories, and neither do we.

Since the article came out, much of the reaction has been two covers of the same song. Either ‘Well I buy my T-shirt from sustainable brands’ or ‘Well I only buy local.’

Let me be super clear about this, in words I might have minced in the piece itself: that is impossible. And pretending it’s not is exactly what keeps sweatshops from being solved.

First, your T-shirt. Let’s say it really was produced by an American company, made in the USA, by people earning a living wage, and that wasn’t just a marketing ploy to get you to pay more for it.

Congratulations. But just because something was sewn together in the United States doesn’t mean that’s where it’s actually from. The vast majority of the world’s textiles are produced in India and China. For my article I asked a CSR manager of an international brand—you don’t wear it, but you’ve heard of it—how they monitor textile factories. ‘Oh we don’t,’ she said. ‘No one does.’

And that’s not the last layer. Most of the world’s cotton is bought and sold like oil, a commodity, consolidated in huge markets in Dubai, zig-zagging through middlemen. It’s hard to find out what country it comes from, much less how it was produced. As the Environmental Justice Foundation puts it, ‘six of the world’s top seven cotton producers have been reported to use children in the field.’

Then there’s how it got to you. Shipping is one of the least scrutinized industries in the world. Boats are in international waters, employees work around the clock, they dump weird stuff into the ocean. Who’s going to stop them?

But let’s pretend for a minute. Let’s say your T-shirt was produced in a decent factory, with decent textiles and decent cotton, that it came to you on a decent boat. Fine. That is one thing. Think of all of the stuff you buy. Your dental floss. Your furniture. That spatula you bought at the dollar store.

You can’t choose three or four products where’d like to avoid complicity in forced labor and low pay, and just decide not to worry about everything else. Your coffee might be fair trade, but what about the machine you’re brewing it in? Check the bottom, dude, I’ll bet five bucks it was made in China. Your car was welded together in Mexico, from iron ore mined in Brazil, smelted in Paraguay. The acetaminophen you take for a headache was produced by a company that keeps poor countries from producing generic medicines for its own people.

The point here is not to gloat, or to play the coastal-elite “I’m more ethical than you” game. The point is, you do not have the power or the information to implement your values. None of us want to promote sweatshops or poison tropical rivers. But we all do. No amount of label reading or better buying will escape this fundamental fact.

But that’s not the point either! The real question is, even we could buy ethical products, would that improve working conditions in the developing world?

In 1750, the Quakers concluded that slavery was an unjust institution and spent the next century advocating to abolish it. Imagine if, instead, they came up with a certification, a commitment that they wouldn’t buy clothes made from slave-picked cotton.

Think about what a gift that would have been to slave owners. All they had to do was rope off a section of their plantation, hire workers, then charge extra for ‘slave-free’ cotton. It would have been perfect: They make more money, get the Quakers off their back and, the best part, get to keep their slaves.

This is how we’ve spent the past 25 years: Instead of advocating to end the conditions that offend us, we’ve done exactly the thing that allows them to proliferate. Auditors told me that some factories in China are divided up with thick black curtains. Since brands only inspect the lines making their own products, suppliers can keep conditions however they want in the rest of their factories.

This is what you’re doing when you buy a fair trade T-shirt or an organic avocado: Concentrating your attention on the tiny corner of the global economy that is not shrouded to you. Instead of raising the floor, you’re raising the ceiling. Fair trade allows us to go around bad institutions and let the worst sweatshops remain, rather than take responsibility for the myriad ways in which we reward them.

“Many global actors assume there’s an institutional void, but there isn’t,” says MIT’s Matthew Amengual. “The state is involved. Positively or negatively, it’s there. Rather than transcending local institutions with global rules, we should be trying to work with them.”

What he means, and what I’ve seen again and again in the developing world, is that sweatshops don’t happen without the participation of their host governments, and they don’t get solved without them either.

One of the reasons India’s garment sector, to take just one example, is so exploitative is that only 2 percent of its textile factories use shuttle-less looms. Without equipment to make them more productive, the only way factories can compete is by extending shifts and keeping pay low. In China, 15 percent of textile factories have shuttle-less looms. The government provides loans and grants, it has deliberately invested in making small factories more productive. India’s own Ministry of Textiles boasts that its desperately poor workers are a competitive advantage: “Rising wages and cost of living in countries closely competing with India,” says the agency’s strategic plan, “provides a vast opportunity for India to capitalize.”

Domestic systems are decisive, and the lack of them can be devastating. Functioning courts, independent unions, empowered civil society, free media, this is the stuff that solves sweatshops, not companies with better CSR policies, not improving the performance of just a few factories. Comcast doesn’t treat you like shit because it’s an evil corporation, it does so because it’s a monopoly, because our government allows it to be one. Sweatshops happen for the same reasons.

Whenever I go on this little rant in front of my fair-tradey friends, they always give the same response: “Hey, it’s better than nothing.” I think that’s the worst argument ever, but for a second let’s entertain the possibility that it’s not. If that’s our only criteria, there’s a lot of other “better than nothing” stuff we could be doing instead. Give money to a NGO that helps register unions in the developing world. Sign a petition. Write your senator.

Our primary leverage over the developing world comes in the form of market access (bilateral trade agreements, TPP, the World Trade Organization) and financial instruments (the World Bank, the IMF, export credit). Companies lobby to protect their interests in these negotiations, and it’s about time we started doing it too.

These steps are small, slow, unlikely to leap us to instant improvements. But isn’t the argument of the boycotters “If everyone acted like me, things would get better”? Well if everyone put pressure on the institutions that can actually eradicate sweatshops, we might actually solve them. Otherwise, we’re just drawing the curtains.

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Some responses to my ‘Myth of the Ethical Shopper’ article

Dhaka, Bangladesh. Photo by me.

Dhaka, Bangladesh. Photo by me.

I’m working on a longer follow-up to respond to some of the reader responses to my article, but for now, I’ll quote some people who know way more about this topic than me, on what my article got right and wrong.

First up, here’s a note I got from one of the auditors I interviewed for the article:

One thing that I hear repeatedly nowadays is that we can’t forget the role of government. We focus on CSR and what companies should be doing but we can’t forget that companies are primarily acting on these issues because local governments are failing to uphold international obligations to protect human rights, to adhere to treaty obligations, and to enforce their own national legislation, which is often much stricter than anything in any buyer code of conduct.
In addition, we can’t be prescriptive about solutions. The West doesn’t have superior solutions. If we want to know what needs to be done, we need to talk to the rights-holders themselves to understand what they want and what they need. In other words, participatory solutions are critical and much more valuable than anything we can dream up in isolation. When communities are engaged holistically in developing solutions, they own that process and it can impact the outcomes much more positively than anything being imposed from the top down.

When considering the shift of consumer power away from the global North / West, we shouldn’t forget that there is still a lot of financial influence, via organizations such as the World Bank, regional development banks like ERDB, ADB, IADB, and of course investors like state funds and SRIs [socially responsible investors].

If you look at the numbers, there are trillions of dollars backed by SRIs alone. But more than that, financing options for many of these institutions are linked to ESG commitments [environmental, social and governmental]. Loans are routinely linked to compliance with things like IFC Performance Standards covering issues from environment and labor to community impact. Funding can be suspended or terminated for non-compliance. Complaint mechanisms allow communities or activists to lodge complaints with ombudsman offices, like those in the IFC and OECD.
Last year, I did an investigation into a land rights issue in Asia and found myself in the field alongside a regional investor who was also investigating the issue and working with their client to bring them into compliance.
And here’s one from Jason Hickel, a buddy of mine and an economics professor at LSE

What workers in the global South need is not better international labor standards, but rather the freedom to organize themselves and demand better standards for themselves.  You point out that Foxconn in Indiana is not a sweatshop. It’s not just because the US has good institutions; it’s because the US had a strong labor movement that won basic things like safety laws, weekends, the minimum wage, etc.

I think we have to ask ourselves why these same movements and institutions don’t exist in the global South.  And the reason, as far as I can tell, is that the governments of global South countries have been explicitly prevented from nourishing them.  The history of structural adjustment from the 1980s onward was a process of actively dismantling state institutions, forcing domestic economies open to the flux of global markets, and rolling back wages and labor standards. If global South countries did otherwise (if they bolstered state institutions, increased wages, etc), they could be sanctioned by the IMF, and have loan capital withdrawn.

Today, this pressure comes mostly in the form of investor-state dispute mechanisms, which are written into free trade agreements.  Through these mechanisms, multinational corporations have the power to sue sovereign states for introducing laws (like labor and safety laws) that compromise their expected future profits.  And then of course there’s the Doing Business rankings, which also actively pressure global South countries to deregulate.

I think another way to approach the issue is to ask why workers in sweatshops are willing to take jobs that are so terrible.  And the answer, of course, is that they have no other choice.  And, as a result, they have very little bargaining power.  Let’s go back to the US again.  Workers were able to successfully bargain for better conditions in factories because they had a real alternative: they could pick up land in the midwest on the cheap, and become farmers (and, later, they had a passable welfare state that allowed them the option of not taking dangerous jobs and still surviving).  If they didn’t have that option, chances are we wouldn’t have the weekend today.  The same can be said of global South countries.  The rise of sweatshops was preceded by a long process of dispossession, of actively kicking people off of their land (and then later dismantling what little welfare mechanisms existed).  Without any other options for survival, people are forced to accept sweatshops jobs.  This continues today in the form of land grabs; i.e., Fred Pearce’s book.

Voting power in the IMF and WB is still terribly, absurdly skewed [basically, rich countries get more voting power].  They keep making noises about changing this in response to outrage from developing countries, but the most they’ve managed is a little bit of window-dressing.

The WB still uses structural adjustment programs.  In the 1990s, they had to rhetorically back down from them because of the riots and global outcry, but all they really did is change the name to Poverty Reduction Strategy Papers. The main difference is that PRSPs must be drafted by the loan recipient, as opposed to the WB, but of course everyone knows the papers have to include structural adjustment if the loan is to be granted. The brilliance is that this allows the WB to evade liability for any disasters that might ensue as a result of the policies, since the recipient country technically offered to adopt structural adjustment policies voluntarily.

As for the WTO: it’s stalled, and for good reason… because global South countries refuse to bargain on unfair terms any longer.  But now bilateral trade agreements are proliferating as a way of getting around this.

And from a friend who works at an international institution working on private-sector human rights abuses:

You rightly criticise the auditing industry as fraught with design flaws and full of suppliers who have become highly adept at fooling the auditors. But at the same time, while it’s not a silver bullet, it is one of the best approaches a company has to the issue at the moment. Sure it doesn’t fix the extire global problem. But it fixes small corners of it, and it is those small corners that the company is most worried about, because its business touches upon them.

And yes, some things do get past auditors. But many violations are caught that way, and prevented too. I often compare it to checking my kids room after I’ve told them to clean it. Just the fact that they know it will be checked, means they do a sufficient job (although they still try to fool the auditor by kicking junk under the bed and stuffing it in the back of the closet).

So I wouldn’t be overly dismissive of supply-chain auditing, although I recognise it’s not a global solution, it’s just a band-aid. Because I want companies to keep doing it and to continue to try to perfect the practice (which today is more sophisticated, and includes supplier capacity building). This continued practice will help keep the pressure up, while at the same time, it will allow us to experiment at the micro-level with various good practices, which can then be exported into a global solution.

You are right in identifying the country-challenges in supply chains, like when you compared conditions in Mexico to China. But even those country-challenges can be changed by the pressure from big business. I remember speaking with [giant apparel company] about their experience in Pakistan. They told the Govt of Pakistan that they would not allow their suppliers or licencees to source from Pakistan because the labor conditions were so poor that [the company] couldn’t afford the risk.

So the Govt of Pakistan asked the ILO for help to improve their labor conditions so that they could attract the business. That’s definitely a dynamic we want to encourage with other big buyers. And it’s a dynamic which has a positive spill-over into the really critical aspect of the problem – those suppliers which are producing for the domestic market, rather than for the big Western buyers.

Also, if you’re interested in why Nike’s approach to its suppliers hasn’t improved conditions in them, check out this great Richard Locke lecture from a few years back.

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‘People want to know what works. But how do we write them in ways that don’t imply they’re generalizable?’

That’s me being interviewed by the Solutions Journalism Network. I’ve written like four articles for the internet, so I’m super qualified to talk about the state of journalism as a field and what it needs to do differently.

The nice thing about these post-game interviews is that you can include caveats and nuances that didn’t make it into the article. A lot of NGO friends of mine have been like, ‘dude, why the hatorade on advocacy NGOs?’

There’s no incentive for [advocacy NGOs] to go after the Li & Fungs of the world, or the smaller companies that no one has heard of. Most NGOs are under-resourced, they’re trying to have the biggest impact with few staff, little time and this huge mountain of terrible conditions they have to bring to the world’s attention.

I talked to someone at a well-known labor NGO about this and he said he has three staff members. The best way to stretch that into impact is to go after Apple, which can improve conditions for hundreds of thousands of employees with a snap of its fingers. Or at least that’s the perception. Individually it’s understandable. But collectively, it means no one is looking at where the worst violations are.

And some more on the Brazilian labor inspectors. I need to write something about this for work-work one of these days. For all the developing countries I’ve been to, I’ve never seen one that has even tried to build up its domestic systems like this.

Brazil used to have a quota system where inspectors were assessed and paid bonuses based on the number of workplaces they inspected. Just like corporate auditors, this gave them a checklist approach. They were literally going door to door, inspecting small workshops instead of big ones because they were quicker to inspect and that’s how you could meet your quota.

Then, in the early 2000s, the government launched this big campaign to eradicate child labor. The inspectors pushed back, like ‘we’re never going to actually end child labor doing inspections this way.’ They were able to switch from quantitative to qualitative assessment methods, and they started prioritizing workplaces according to risk. They also started bringing in all these other government agencies. A weapon the academics talk about a lot is deferred prosecution agreements, where prosecutors tell farms ‘fix this by the time we get back, or we’ll take you to court.’ That threat of litigation is a huge reason why businesses fall into line.

And this is why solutions have to be domestically owned. The effectiveness of the inspectors comes from their mandate, their budget and their support from high-level politicians and the population. You can’t manufacture that from outside. And it’s not going to last if it’s not locally embedded.

And, if you’ve ever met me in real life, I’ve probably mentioned this within like six minutes: There’s no such thing as a good or a bad idea, only how it’s applied.

In development, we have a ton of ideas that aren’t world-changers, but provide modest gains if you roll them out right. Microcredit went through this lifecycle where when we first found out about it, it was going to SAVE THE WORLD. Then all these other NGOs jumped on the bandwagon and they didn’t know what they were doing and the results faltered. Then microcredit became A USELESS SCAM.

In the last few years, microcredit has levelled out to just this one tool among many that works under certain circumstances but not others. In a lot of places, it works really well, but it’s not the shortcut we thought it was. I actually consider that a huge success, but imagine pitching that to your editor.

There’s hella more at the link!

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‘We are not going to shop ourselves into a better world’

Warehouse in Kampala. Photo by me!

I’ve been working on this article, in my head at least, since probably 2007, when I started working in CSR, consulting companies on how to reduce their human rights impacts. The conclusion I came to, that everyone in my field seems to come to eventually, was that companies don’t matter. What matters is the environments where they operate.

One little story that didn’t make it into the article:

Here’s a World Bank profile of a Vietnamese Nike factory. In 1997, 84 percent of workers had nose and throat infections, mostly from failing to wear masks when they were working at dyeing stations. Nike, scrambling to respond to the decade-long boycott campaign against it, started delivering worker training, posting hazardous-material info in the break rooms, issuing a monthly health newsletter. By 1998, infections were down to 20 percent.

Huge success story, right? Well … hmmm. The same investigation found that managers were dumping wastewater in the local river, transferring the health risks to the entire population downstream. When the case came to light, they hired the son of the local Communist Party chairman to negotiate the terms of the settlement. The company was never punished.

In that story is everything that consumer boycotts have achieved. It’s not nothing that the factory improved its health and safety practices. In another study, a Cambodian manager grumbled to investigators that “Nike is so much stricter about everything.” Props to Nike, seriously.

But you see this with almost all of these company efforts: The gains inside the factories are dwarfed by the impacts outside of them. Colluding with political officials, poisoning local communities, these are exactly the kinds of things that audits can’t find, that companies can’t fix, that consumers can’t keep track of.

A few months ago I made that video about Uganda. In 2007, the Industrial Court, the place where workers go to file complaints, lost its mandate. It wasn’t renewed until this year. That means that for eight years, labour inspectors couldn’t levy fines against companies that were breaking the law. Workers couldn’t take their bosses to court for failing to pay back wages. I see this again and again in the developing countries I go to for work: Institutions are there on paper, but absent in practice.

Another little point that that didn’t make it into the article:

Sweatshops don’t happen without the participation of their host governments, and they don’t get solved without them either. One of the reasons India’s garment sector is so informal, so exploitative, is that only 2 percent of its textile factories use shuttle-less looms. In China, it’s 15 percent, boosted by government loans, grants, more than a decade of cajoling its factories to move up the value chain.

India’s own Ministry of Textiles boasts that its desperately poor workers are a competitive advantage: “Rising wages and cost of living in countries closely competing with India,” says the agency’s strategic plan, “provides a vast opportunity for India to capitalize.”

If we’re going to solve sweatshops, we need to consider why they are there, why they endure. We need to stop trying to vote with our wallets, and start voting with our votes.

Thanks to everyone I interviewed for this article! All of the ideas in it, especially the smart ones, are not mine, they’re all taken from the work of researchers and inspectors and CSR folks who have thought about and done this a lot longer than I have. I’m gonna write some follow-up posts highlighting their work.

Also, I have the best editors. As you can tell from the un-edited snips above, I need them!

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Another video by me: John Haskell’s ‘Elephant Feelings’

I’ve always adored this John Haskell short story, and because I was in Croatia last week where the internet is super slow, I decided to make a video version of it!

Thanks a lot to my friend Stefan for doing the voiceover, and to Haskell himself for giving me permission to use his text.

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