February 6th, 2012
03:47 AM GMT
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Hong Kong (CNN) – A few years back, influential New York Times columnist Nicholas Kristof shocked readers by opening a column this way: “Africa desperately needs Western help in the form of schools, clinics and sweatshops.”

For Kristof, who regularly advocates better conditions for people in the developing world, this advice seems to belie his progressive views. But he’s part of a chorus of liberal economic thinkers who advocate that sweatshops –  a broad term for factories or workshops characterized low wages, long hours, sometimes underage workers and unsafe conditions – are an unsavory but necessary first step to help bootstrap the world’s poorer economies.

Nobel Laureate Paul Krugman penned a 1997 piece for Slate entitled “In Praise of Cheap Labor” that argued “bad jobs at bad wages are better than no jobs at all.”

That brings us to the once sleepy fishing village of Shenzhen, across the border from Hong Kong, which was the center for China's economic reforms in 1979.  In just three decades the city has grown to more than 10 million people. Shenzhen is now home for numerous technology manufacturers and a large part of the Chinese operations of Foxconn, the electronics manufacturing giant that help builds the bulk of the world’s Apple iPhones, Microsoft Xboxes and Amazon Kindles.

Apple plant workers complain of long hours, militant culture

Foxconn – and by association, Apple, Microsoft and other multinational tech companies who lean on Foxconn’s million-plus Chinese workforce – are now under the microscope for allegations of poor labor conditions, especially after a more than a dozen  of employee suicides at company plants in 2010.

Under the “sweatshop economics” argument, the troubles at Foxconn suggests Chinese labor development has reached an adolescent stage, with workers no longer content that any job is better than no job at all.

What is Foxconn accused of?

The progression follows the route that Singapore, South Korea, Hong Kong and Taiwan took toward building their developed economies – a path laid out by post-World War II Japan. “Made in Japan” has disappeared from back of low-cost electronics, much like the once proliferate “Made in Hong Kong” or “Made in Singapore” can no longer be found clothing labels. Foxconn itself is a Taiwanese company that has shifted the bulk of its labor-intensive operations to the mainland.

The sweat from the first generation of factory laborers in those East Asian nations paid for the education of their children and grandchildren, and the rise of their companies and economies creates  higher value jobs in management, research and design, marketing and the like.

At least, that’s the dream.  The ultimate macroeconomic test of the virtue of the sweatshop is does it really create upward social mobility?

Some critics say no. In a piece for Foreign Policy in Focus, Jason Hickel of the London School of Economics, argues that especially in post-colonial areas of the third world, sweatshops arose not because of market forces but “the outcome of a deliberate strategy to render people desperate enough to take jobs that paid pennies."

“People — in Thailand and Peru, for example — only choose sweatshop jobs because they have been made desperate and given no alternatives for livelihood. So it’s not really a  'choice'  at all,” he wrote.

Yet looking at the macroeconomic success of China, it’s hard to not be awed by the country’s incredible strides since cracking open its markets to capitalism “with Chinese characteristics.”  Since 1979 about 600 million people – or 10% of the entire population of the planet –  have escaped poverty in China, according to the World Bank, a feat more successful “than all the aid programs we have seen throughout the world,” as Stanford economist Paul Romer put it.

Whether Western consumers will start to feel guilty – and switch off – from electronics products made in China remains to be seen. But as thousands lined up for jobs late last month at a new Foxconn plant in Zhengzhou, the spigot of Chinese workers who want to make your iPhone appears in no danger of running dry.

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Filed under: AppleAsiaBusinessChina

soundoff (50 Responses)
  1. OrangeW3dge

    By the time that Abraham Lincoln declares the end of "slavery", it has become evident that there are more economical ways to get "labour". Indeed, having slaves was not cheap labour by any stretch of the term. The modern slavery is, as said above, "a deliberate strategy to render people"... dependant on the hand that feeds them by displacing traditional independent systems with those offered by the employers, as in the "Pullman" towns during American industrialism. The interesting thing about the Christian method is that they say they are doing it to "improve" the living standard of the poor wretched souls that they are saving.
    The good news? When those societies get "improved", the labour there will cost too much and the whole process will move somewhere else and start all over again. At which time, the first countries that were developed by this technique will fall to ruin and become ripe for a second coming of the corporate "saviours".

    February 6, 2012 at 7:09 am |
  2. JC

    Welcome to a capitalist world. The demand is created, the product designed, the factories built and cheap labour is organised. Multiply this by thousands and add the need for cheaper gadgets, thereby lowering the profit margin, which in turns causes the companies involved to require lower paid workers. Cue modern day slavery. Cue China.

    February 6, 2012 at 7:23 am |
  3. Jill

    Of course they are a necessity... and each and every one of us is responsible for them.

    February 6, 2012 at 8:30 am |
  4. Jake Mathers

    Check out CNN trying to warm us up to 3rd world working conditions. Shallow attempt at social engineering. Sick how corporate culture demands to go full predator. Need to curb corporations and have it fixed like a dog.

    Watch some real news and check out Vice Guide Congo. Very eye opening by real field journalists. Not these can fools who call google "investigative journalism".

    February 6, 2012 at 8:36 am |
  5. Vienna

    “bad jobs at bad wages are better than no jobs at all.”............Which planet does he come from?...who said poor people in 3rd world countries sit on their a$$all dayand do nothing...I spent a good part of my life growing up in a slum and ill tell you the truth.....we the poor people wake up at 4 o'Clock every morning and go to bed at 12.00.We work jobs that expose us to all kind of health dangers, its a miracle if you make it to see 50. Then you leave your kids at home to the danger of slum fires and paedophiles..This kids don't know any other life and we don't have enough money to take them to school, so they grow up to work jobs like us...its a human chain. And its modern day human slavery, where the only person who benefits its the company and the politician who's on the payroll of the company.

    February 6, 2012 at 12:23 pm |
  6. citizen2000

    Several Chinese scientists came to the University of Michigan in the 1990's to study with one of the world's experts on industrial dust explosions, like those at Apple's Chinese suppliers. This was part of the American effort to help China's economy which had been close to collapse in the 1980's. However, when those scientists went back to China they did not work on industrial safety but instead went to work for the Chinese military on making better bombs.

    These are the choices China's authoritarian regime has made but American universities still keep making deal after deal with them and sending our technology to China to help them modernize their military and compete with us for jobs. Obama says we are now serious about fair trade but he is coming to the U of M tomorrow and I wish he would speak to President Mary Sue Coleman and tell her the UM is an American university and should be doing everything it can to help us compete with China. Read more at http://www.china-threat.com

    February 6, 2012 at 12:51 pm |
  7. KidOfTheHouse

    Sure low wages and sweatshop conditions are inevitable. But the existence of informed consents and full understanding of the nature of the relationship between the parties should AT LEAST be there. Employers shouldn't force workers to keep working, even if they are being paid.

    February 6, 2012 at 12:59 pm |
  8. coder

    sweatshops are only a necessity for money – Money is only needed by the greedy – human society does not need money nor an upper class to progress

    February 6, 2012 at 1:20 pm |
  9. john doe

    Its sinnical for us westeners to condemn sweatshops, when we are the ones buying the product.

    February 6, 2012 at 1:33 pm |
  10. Yubaman

    The bottom line why Apple went to China, low wages and no Environmental enforcement of haz. waste.
    They could not get away with both within the U.S.A. That might make them anti-U.S.A.

    February 6, 2012 at 3:37 pm |
  11. ernesto gomez

    We went through a sweatshop phase in the industrial revolution – and learned better. This article is a cynical justification for repeating the mistakes of the past.

    February 6, 2012 at 4:42 pm |
  12. Frank Sellers

    To say sweatshops are a necessary evil is very easy for über-snobs who don't have to see their spouse, parent or child suffer in one. The very idea that these elitists might work in one themselves if they had been unfortunate enough to be born a "peasant" in a poor country is so terrifying they'd never allow themselves a moment's consideration of pondering what the reality of living this existence might really be like.

    February 6, 2012 at 5:04 pm |
  13. the_dude

    No definately not a necessity. Not everyone needs an iphone or ipad the only reason there are sweatshops is for some fat cat to get rich. I would care less if there were half as many iphones out ther and they cost twice as much.

    February 6, 2012 at 5:14 pm |
  14. Frank Sellers

    First of all, why should we trust and "statistical" data coming from the World Bank? I'm sure they're not the most objective source in the "world". Secondly, I'd like to know how many former sweatshop workers in Hong Kong, Singapor and South Korea are now living the good life. Just like in the US and every other country, low-paying jobs means you live paycheck to paycheck. You scrape just to pay the rent, buy food and maybe once in awhile plurge on a movie. You can't save money. The very idea is preposterous. And if you can't save money it's very difficult to improve your life. If even you buy "Microsoft Excel for Dummies" in an attempt to educate yourself into a somewhat better position, you never have time to study it if you're working 16-hour days.

    Low-paying jobs will always exist because not every job demands skills that warrant paying a lot. But there the only excuse for working people to death is greed. Sweatshops are a device not only to get rich off the sweat of others, but an effective means of maintaining a permanent underclass with very few means of escaping their poverty.

    I would expect a conservative to make the same argument this article does. After all, it's Newt Gingrich who's promoting training inner-city minority children to be janitors and not to be bankers or lawyers His after-school work idea would be a great one if it mean internships in corporate offices and not mopping floors.

    February 6, 2012 at 5:19 pm |
  15. Jeanne Ratzloff

    Last November I was in China for three weeks. We met several adoption agents. We witnessed people camping out to buy the new iPhone. When in the course of conversations we mentioned to the adoption agents that a family member works for Apple it was almost like that person was a rock star. One lady actually went home and told her friends. People who work in the Apple stores are envied. I doubt very, very much Apple operates “sweat shops.”

    February 6, 2012 at 5:48 pm |
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    February 6, 2012 at 5:51 pm |
  17. Coflyboy

    Buying "Made in China" is much more expensive than we realize.
    Buy American.

    February 6, 2012 at 5:53 pm |
  18. jb

    Over a dozen suicides in their plants? Of course they have over 1 million employees. The death by suicide figures for the US is 10.6 per 100,000 for a total of over 29,000 per year.

    February 6, 2012 at 6:02 pm |
  19. fucnn001

    Bad jobs are better than no jobs? So being a slave and poor, is better than being free and poor? Sounds like the thinking of a someone who is so far removed from the reality of what its like to live these lives.

    February 6, 2012 at 6:12 pm |
  20. FedUp2

    Apple's gotta make that jack. By the ton. That's what is eventually going to make America great right. Super rich, cash hoarding tech companies spreading their wealth from Silicon Valley throughout the rest of our great nation they are proud to be a part of, right? Yahoo will pay billions in taxes this year that will support US and CA government programs and create jobs here, right? Our government officials sealed deals with these giant tech corps, like Google and Facebook, and of course Apple, to support the nation these companies call home, despite the fact they farmed out all production to Asia and hired mostly visa-permitted overseas workers they bring in here. We should all invest in their grand scheme to make America great again!

    February 6, 2012 at 6:35 pm |
  21. 3jax95

    Whatelse new?

    February 6, 2012 at 6:51 pm |
  22. David

    This is like saying child abuse is necessary for the Catholic Church to exist.

    February 6, 2012 at 6:51 pm |
  23. jim reilly

    I have little sympathy for a country which produces one billion humans and then wonders
    Why there is little quality of life for it's peoples.

    February 6, 2012 at 6:58 pm |
  24. DanG

    Judging by the posts on this forum most people tend to agree that slavery in any form is wrong. I am in agreement as well which makes me one of the very confused that we are so unable to stop this from happening. Logical conclusion = we have very little power and do exactly as we are groomed by the giant power corp. Logical solution = stop buying more than you need and buy things that are certified fair trade or conflict free. Not as hard difficult as it is to sleep with a clean conscience on a pillow made by sweatshop slaves.

    February 6, 2012 at 7:05 pm |
  25. Tom

    History just repeating itself – the never ending search for wealth by any means necessary. This isn't about providing a stepping stone for poor countries much like colonization was. It's about more wealth for the multinationals just like it was about more wealth for the various kings and queens of colonial days.

    February 6, 2012 at 8:43 pm |
  26. owen techman

    i envision a return to more independent rural life with the aid of tech in hand.... cyclic patterns i guess... human robots molded for class social systems doesnt seem like much of an ideal to me.... are children still an economic advantage at this level?.... ... i am all for a global network of solar powered magnetic ganglions with free plots along for all... but like the war on drugs... like the war on thought like the war on the internet like the war on food like the war on beds.. yah whatever.. i am crazy and I have serous doubt as to whether these news stories adequateness reflect the world... I just want to set the record straight by giving a piece of my mind to the record here.. then I can go back to avoiding the fake world around me..

    February 6, 2012 at 9:48 pm |
  27. SFC Mike

    There are places in the world where modern "sweatshop" conditions would be an improvement – much of sub-Saharan Africa, many parts of India, Bangladesh, etc.

    Simply and unfortunately, there is an oversupply of labor, a shortage of alternative work to give that labor any bargaining power, and a history of corruption and exploitation by those with power.

    The suggestion that sweatshops are a "necessity" that will eventually lead to meaningful economic benefits for the majority is just a rationalization. Talking about poverty rates in China over the last two decades is completely misleading – you had a non-market system with artificially fixed (and severely distorted) costs and resource allocations, so there is no valid statistical basis for comparing economic and standard of living data from Maoist era to transitional to the pseudocapitalist system now in place. This is especially true in China where the government and communist party still exercise a huge degree of information control, and the same elements who control the information have a vested interest in justifying the present system.

    Sweatshops serve no purpose now other than to make a privleged few wealthy, while doing little for the replaceable supply of human beings exploited to create that wealth.

    February 6, 2012 at 11:00 pm |
  28. belinda

    Boycotts are an essential part of the future . Americans need to get in step and fight back . There is only one way to do it . Strip companies of all tax breaks . Quit buying products.

    February 7, 2012 at 1:38 am |
  29. 郁闷与快乐

    Chinese workers continue to awakening and continuously organize, unite and practical rights. The quality of the Chinese working class as a whole has been greatly improved.

    February 7, 2012 at 3:01 am |
  30. gupsphoo

    Yes the Chinese labor system might be several decades behind the US, but so what? They're catching up fast. It sucks, doesn't it?

    February 7, 2012 at 4:19 am |
  31. dkoga

    Dare we say, CAPITALISM is behind it all, it fosters just about the worst in all human behaviors. Look around you, what do you see, nothing but a big facade of ideals, believes, businesses and governments.

    February 7, 2012 at 8:24 am |
  32. Jack Attack

    Of course sweat shops are necessary. I need my iphone. I wouldn't be able to live without it. Who cares about Chinese fools? Not me.

    February 7, 2012 at 7:07 pm |
  33. Sal Pal

    I am addicted to Apple products and I am not going to stop using them. The Chinese people need to handle their own problems. THIS IS AMERICA!!!!!! and we are a country of consumers and racists.

    February 7, 2012 at 7:11 pm |


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  36. BJ

    You guys need to shut uo this is a serious issue and i am offened.

    February 7, 2012 at 7:14 pm |
  37. RP

    Countries do not get rich out of the blue. For poor countries to develop the primary need is for capital stocks to increase. Capital can come from inside, a slow process if you are starting from nothing, or from the outside. Companies that choose to go to these countries choose them because they offer low labor costs. They invest capital, both tangible and intangible, and these countries start developing. The fact of the matter is that business isnt charity, and if you insist that 3rd world workers get salaries above that which makes it attractive for these companies to enter these places, take the risk and take on the cost of going into what are nearly always unstable countries which require serious investments of money and capital as well as time, then you are going to basically price these workers out of the labor market altogether and condemn their kids and grandkids to a life of continued poverty.

    February 8, 2012 at 2:02 am |
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    February 9, 2012 at 5:32 pm |
  40. Blamo

    Yes – capitalism requires exploitation and a class of rich owners and state bureaucrats to profit from it for life to continue as "normal." Healthy capitalism needs sweatshops. Have fun and don't feel guilty about it – if you're not a rich owner then it's not your fault. It's their fault. Hopefully in the future we will be able to take over their wealth and manage it together as the whole humanity to create a world without sweatshops, bureaucracy, wars, pollution and other horrors.

    February 10, 2012 at 9:39 pm |
  41. enkephalin07

    Whatever happened to "enlightened self-interest" in capitalism? If you hire locally, what you lose in profit margin you make back in a more robust local economy; more employees means more disposable income coming back to buy your product. But outsourcing labor to international slavers just isn't sustainable; the larger profit margin costs you your domestic market. And then what - go find foreign markets that can afford your price? How long will that last?

    February 12, 2012 at 3:57 am |
  42. shredder7753

    i just wish that the corporations would hurry up and set up factories all over the globe so this process doesnt keep shifting around like a whack-a-mole game.

    February 15, 2012 at 2:18 pm |
  43. mickey1313

    It is not nessessary. We could drop the pay of the CEO and bord of directors by 30%, and then there would be no problem and no increase in cost to the buyer, but in the fascest state we live in (in america) greed prevents that, so they will jack the price to screw americans. Just like gas, the gas companies make record profits, so they raise prices. The banks make record profits, so they raise fees. It is fascism, not free market capitolism.

    February 22, 2012 at 5:27 am |
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