The crisis of cheap labour

By Nisha Patel

Look at the label on your shirt or jeans. Is it Levi Strauss, Gap, or Roots? Some of us may not have any qualms about following the fashion trends and designer brands so important in North America. Yet those three corporations and many more have been accused of violating local and international labour laws in their factories during the last decade.

With working conditions reminiscent of the pre-Industrial Revolution era, sweatshops are recognized for ignoring both labour and human rights standards. A sweatshop often subjects workers to physical, mental and sexual abuse, long hours, and low wages in unsanitary environments. Primarily found in developing nations in Asia and Latin America, the global sweatshop system has reached crisis proportions.

Apparel, textiles and footwear are the most global of any manufacturing industries and employ the largest workforce in this category in the world. Over two million people work in garment sweatshops in 150 countries. It is unusual for a retailer to own factories and many often use this reason as a defense for the conditions that exist in sweatshops. But these companies do control where their products are produced and how much they cost, which in turn will affect how the factories are run. The problem that arises is rooted in economics. A company will subcontract its goods to countries with the lowest wages and developing nations will keep their wage rates low to attract foreign investment from multinationals. The workers themselves are trapped in this arena to choose between unemployment and sweatshops in a life where survival becomes day-to-day.

The issue of sweatshops in the global economy was debated in a lively forum at the University of Calgary on Wed., Jan.18. Accounting for Maquiladoras was hosted by the Centre for Public Interest Accounting at the Haskayne School of Business and the Latin American Research Centre. The event brought together academics, politicians, and activists to stimulate discussion on the topic. Maquiladoras are the assembly plants in Mexico which often operate under sweatshop conditions, and account for 54 per cent of Mexico’s export industry. Social sciences dean Dr. Stephen Randall delivered some of the historical context of maquiladora growth. He described the Border Industrialization Program which in 1965 introduced a 20 km zone along the U.S.-Mexico border. The BIP created jobs for Mexican workers producing goods, which were then shipped back to the U.S. In 1972, the program was expanded to include all of Mexico. The agenda was to increase industrial development and the transfer of technology, as well as foreign investment. In 1994, Canada, the United States and Mexico launched the North American Free-Trade Agreement. NAFTA aims to increase free trade by decreasing tariffs for member countries.

Proponents of NAFTA believe it is the perfect example of a win-win situation, with Canada and the U.S. able to produce low cost goods while creating much-needed jobs and industrialization in Mexico. In an increasingly global economy, NAFTA supporters claim the interconnectedness of different markets results in political stability between states in addition to economic benefits.

However, sweatshops such as maquiladoras have also become the centre of anti-globalization and anti-NAFTA movements. Labour rights activists claim the growth of industry is good, but dignity and respect for workers are just as important as creating new jobs. Developing countries will often keep minimum wage low to attract foreign investment. Corporations can then claim they are displaying responsibility by paying minimum wage, which is sometimes set at or below the poverty level.

Marie-France Labrecque, professor at the Universite de Laval, suggested maquiladoras not only foster harsh working conditions within the plant, but negatively affect the surrounding community as well. She described the example of Ciudad Juarez, where the 400 maquiladoras, which employ over 200,000 people, make the city the biggest concentration of maquiladoras in Mexico. In 1996, stories of terrible maimings and murders began to emerge from aid workers who visited this city at the U.S.-Mexico border. Seventy per cent of the hundreds of victims killed to date were young women, some of whom worked at the maquiladoras.

“In addition to narcotics and perceived gender superiority of men, the atmosphere of corporate irresponsibility from the maquiladoras diffused throughout the city,” she said. “The companies don’t pay taxes or contribute to the society and this creates an impunity that lets the murders go unquestioned.”

Comparing the terrible conditions of Mexican maquiladoras with the goals of NAFTA, Randall agreed that a problem does exist.

“The disparity between reality and rhetoric is quite striking, and shameful,” he said.

In addition to the important role that non-governmental organizations play in containing corporate irresponsibility, Randall said the solution to the maquiladora crisis must begin with the enforcement of labour laws by Mexican officials. This may lead to some corporations leaving Mexico for a country with less-stringent rules, but Randall concluded this is unavoidable.

“As long as we have a global environment for investment, capital will move when it finds itself in an unfavourable environment,” he said.

Vice-Consulate of Mexico Sergio Pichardo said his country takes care of the maquiladora problem year by year.

“If Canadians want to help, they should invest in Mexico,” he said. “Open your industries to our workers and accept degrees from our universities.”

Pichardo insisted Mexico would not allow maquiladoras to turn into sweatshops.

“The labour rules and regulations are there to be used by the individual,” he said.

Activist Estelle Kuzyk challenged Pichardo’s position and that of his government.

“[The Mexican government] has labour laws in the country, but the breaking of them is much more common than their enforcement,” she said.

Kuzyk represents the Calgary No-Sweat Coalition, a grassroots organization which raises awareness of ethical consumerism. The group operates on the thought that public institutions purchase far more apparel than an individual consumer.

Thirteen municipalities and 13 universities across Canada have adopted a “No-Sweat Policy.” The U of C isn’t one of them, but Kuzyk has high hopes for the future.

“It’s not a great upheaval, but at least it’s a start,” she said.