Cheap Labor at any price?
Introduction
Globalization is what happens when you lose your job in (…) Elizabeth because the company
for which you work has been bought by the Australian subsidiary of a Dallas-based
transnational company that has decided to relocate its production of T-shirts to Mexico
because of cheaper wage costs and lower health and safety standards (…) tax breaks,
freedom from environmental laws.
J. Wiseman, Global Nation? Cambridge university Press, 1998.
Against (The Corporation 2004)
Pro (The Corporation, 2004)
Text
Globalization Survey Reveals U.S. Corporations Prefer Dictatorships
American businesses may say they believe in democracy, but they are not putting their money
where their mouth is, according to a report by a Washington-based think tank.
Democratic countries in the developing sector, such as Poland and South Africa, are losing out in
the race for American export markets and American foreign investment. Dictatorships such
as China or semi dictatorships such as Indonesia are winning.
And the trend is growing. As more of the world's countries adopt democracy, more American
businesses appear to prefer dictatorships. […]
Such rulers [in dictatorships] tend to be strong leaders who can provide quick decisions, deliver
results and stamp out opposition. These qualities can appeal to many business leaders, who
themselves operate in a non-democratic structure. (..)
Dictators, not having to answer to voters or a legislature, can often deliver investment
incentives (2)-such as tax breaks, freedom from environmental laws and a docile work
force--that are powerful lures (3) for foreign corporations.
November 19, 1999
Conclusion
Evaluation
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REEBOK, NIKE, AND LEVI STRAUSS ON THE PROWL FOR CHEAP LABOR IN INDONESIA
by Peter S. Goodman
Tini Heyun Alwi is not sure exactly how much a shopper in America must spend for a pair of the Reebok
sneakers she and her co-workers assemble each day by the tens of thousands, but she figures it's a lot.
"I think maybe I could work for a month and still not be able to buy one pair," says Tini, who works on
the assembly line of the Dong Joe shoe factory at an industrial estate in Tangerang, just outside
Jakarta, Indonesia's teeming capital. A look of wonder crosses her nineteen-year-old-face at the
strangeness of the thought as she sits cross-legged on the floor of the squalid one-room shack that is
her home.
The room is no larger than many a closet in the West, but Tini shares it with another woman to keep costs
down. Neither owns a mattress or a bed, so they sleep on the floor. The moist tropical air is
disintegrating the walls, just bundles of newspapers fastened together with glue and string.
Mosquitoes enter at will, floating like confetti around a dim light bulb hanging bare from the
plywood ceiling.
One month's worth of Tini's earnings actually falls far short of the retail price abroad for a pair of the
trendy, leather athletic shoes she stitches together. Six days a week, Tini works a ten-hour shift
inside a poorly ventilated factory in stifling heat, each day earning the princely sum of 2,600
Indonesian rupiah ($1.28). Throw in forced overtime two to three times a week at another 300
rupiah (fifteen cents) per hour and Tini's monthly wage comes to about $39, a far cry from the
$110 that a single pair of Reeboks can command in the United States.
This is the arithmetic behind Southeast Asia's economic boom, and Indonesia has learned the equation
particularly well. Lured by cheap, abundant labor, investment capital has poured into the archipelago-more than $18 billion over the last three years alone-- much of it into shoes, textiles, garments, and
other export-oriented manufacturing sectors. Such major American brand names as Reebok, Nike,
and Levi Strauss--always on the prowl for cheaper labor markets free of unions and safety codes-have descended on Indonesia.
The corporations prefer not to do their own manufacturing; they stick to advertising, distribution, and
product development, while contracting with Third World factories to churn out their products at
rock-bottom cost.