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Corporations & the Global Sweatshop Playing Devil’s Advocate no more: Time for One Currency by Sophia Barkat The Irony of Capitalism America as a nation has played "Devils Advocate" as far as protecting multinational corporations and Bretton Wood organizations all along because America benefited from importing cheap manufactured goods by keeping the Dollar strong. This made America's economy grow by putting jobs into the economy -- and jobs being stability, everyone played along. As a result you will see white-collar Americans always defending International Trade, WTO, GATT, the World Bank, the IMF. They felt empowered by American hegemony and multinational corporation hegemony. Too bad playing Devil's Advocate doesn't help in the end. The Devil is not a saint and so one ends up justifying the whole criminal foreign exchange system -- the one US dollar = 50 Indian rupees -- until one day American jobs in the so-called tertiary economy are also being lost. It's funny. One has to put one's job where one's mouth is. Jobs are leaving America in the tertiary and retail sectors because multinational corporations and the US trade-policy -- WTO, GATT etc. – have always played the game of the "cheapest labor takes all." India's New Friend: The Multinational Corporation If India's computer industry feels secure today, and happily complacent with multinational corporations, then beware. For the lessons of international trade are simple: computer industries are dime a dozen. They exist in Denmark, Sweden, China, Taiwan, South Korea, Sri Lanka, Bangladesh, Brazil, Chile. Where you have cheaper labor there Multinational corporations will eventually go. India is now trying to defend itself by saying this is about efficiency and well being. It is indeed good for the Indian economy. There is large unemployment in most poor to developing nations. India has to create jobs. But when jobs are tied to trade and world trade organizations will always push for lowest cost methods, and to drive out competition and increase the market for multinational organizations, India's windfall gain might just be a matter of the moment. Garments Industry Rise and Fall in Bangladesh In Bangladesh, the garments industry enjoyed 20 years of boom. They also lost most contracts to India and Thailand. Why? One reason of course is Bangladesh's continual political problems and frequent general strikes. The other I presume is India's new political alliance with the US. For as productivity goes Bangladesh was the cheapest labor market. I just read a World Bank report LABOR MARKET POLICIES FOR HIGHER EMPLOYMENT. I'll go over the paper to show what the World Bank wants to portray about Bangladesh to justify low costs. The paper plays on the idea that there is under-employment in Bangladesh and that wages should be determined by market forces. It keeps portraying the garments workers as "under-productive" with the aim to say that they are getting low wages because they are not efficient. This is untrue. Table 5: "Unit cost for T-Shirts" shows that Bangladeshis and Indians are making almost the same number of shirts per person, though Indian wages are 2.5 times higher. Clearly, worker productivity is not low and not the reason why Bangladesh is losing it's market. The World Bank study decided that: "Labor unrest and a perception of poor industrial relations are discouraging private investment, especially foreign direct investment." None of the above explains why according to them labor productivity is low in Bangladesh. None except political unrest. In fact, the government does not create any problems for any international businesses. There is no enforcement of minimum wages, no working hours, no other perks on the job In fact, most workers are not unionized. In fact, Bangladeshi textiles workers are very productive -- working from 6am to 8pm usually. More so, the minimum wage that exists for unions -- 930 Takas per month -- is paid out to no more than 20% of workers, according to a 2002 study by SOMO: The Center for Research on Multinational Corporations: "The adults who have replaced the children in the garment factories have such a low wage that it is questionable how they could feed their family without asking their own children to also work. The minimum wage is 930 takas, according to one study done by Bangladeshi unions (see page 16), but it is only paid in 20% of the cases. However, even these 930 takas are not enough money to live decently in Bangladesh. In Dhaka, for example, a room rents for about 500 takas a month, which already forces many women workers from rural regions to share a flat to afford the rent. Then there are costs for food, transportation and so forth. It is impossible to get by properly with 930 takas. Yet in a country where the underemployment rate exceeds 40% it is hard for textile workers to negotiate a raise in their wage. Employers who break the law by paying less than 930 takas a month risk little: a court action by injured workers would not be decided until years later, and the fines are negligible". The World Bank, therefore, attempts to explain low wages in Textile Sector -- which is an export industry -- by the high under-employment or market forces. Well, the World Bank, WTO, etc. are the organizations which determine which country multinational corporations should exploit next. They are driven with the goals of serving multinational corporations only. Lessons to take This is what the American public suffering from joblessness has found out as of late. There is no point in playing devil's advocate -- not for Americans nor for Indians or Bangladeshis. What the World Banks and IMFs are doing are pitching the labor of one nation against another. They are in the business of keeping labor weak. This is their capitalist agenda. They serve multinational corporations and big business only -- Wal-Mart, General Motors etc. Notice also, that India's and American politicians and also that of Bangladesh serve the big businesses, as do the elite and intelligentsia of the globe. The World Bank report is a classic example of how microeconomics is utilized to make sense of propaganda: the word "under-employment" or "under-utilized" reminds Economics students of nothing other than a natural pool of cheap labor. More so, the fact that they wish to reduce the Government's, already non-existent role in enforcing minimum wages, implies that they have but one goal : to make the labor market bid down the price even lower. The Bretton Woods Culprits Ultimately, the foreign exchange system is to blame. The Bretton Woods organizations such as World Bank, IMF etc. were created to control the currencies of poor nations, so that the natural resources and labor markets could be made cheap, and the foreign exchange system perpetuates this. As you can see, garments workers in Bangladesh don't drive cars nor do they enjoy good work environments. This was the goal of the World Bank and such donors: to keep the cost low so that the developed nations -- previously Imperialists -- could continue to rape the poorer nations of their resources and labor, without having to maintain a huge military presence. The Solution We don't have to give in. Just as the Non-Aligned Movement gave countries the chance to say no to the US and the Soviet Union's attempt to draw nations into the Cold War, nations should opt out of the IMF, World Bank and any other organization which attempts to control their currency. We should propose that any nation wanting to do trade cannot unless they allow currency equality. The EU just enforced that – making the Euro the only currency. This makes labor and goods equal in those states, which was the goal. Asia, Africa and Latin America should do the same, as we have the world's natural resources and the cheapest labor. Why sell it for less? And if we dare to dream, we could acheive a world with just one currency... About the Author(s): See under Our Contributors to find out about the Author(s) of this article. |
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