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Monday, February 27, 2012

The human rights tax

When a technology giant like Apple announces that ‘Made in the U.S.A’ is no longer a viable option for most of its products, iPhone included..
It’s no surprise: The smart phone and tablet markets are where most of the technological competition’s efforts are going. Things got so fierce that at some point Amazon was considering throwing its hat into the ring with a device that it would sell at a loss, hoping the app revenue it could generate would make the overall venture profitable.

Then when a technology giant like Apple announces that ‘Made in the U.S.A’ is no longer a viable option for most of its products, iPhone included, you start wondering where all the manufacturing jobs have gone, and that’s when you stumble upon a name like: FoxConn City.

What was once thought to be the answer to many manufacturers’ hopes to cut costs, is now often synonymous to a Chinese-flavored labor-right scandal, a story of highly questionable working conditions played out to the money-saving benefits of.. You, the consumer.

Not an Apple user ? "[Foxconn] assembles an estimated 40 percent of the world’s consumer electronics for customers like Amazon, Dell, Hewlett-Packard, Motorola, Nintendo, Nokia, Samsung and Sony". And with this story coming in and out of the spotlight since late 2010, chances are everybody and their grandmother owns one of their manufactured products.

But that's not news. Remember the child labor scandal that hit Adidas and Nike in 2000 ? These things happen because they present an opportunity for large manufacturers to cut tremendous costs. Unfortunately for the likes of Adidas, Nike and Apple, they are also big international brands, which means that any association with questionable labor conditions is damaging to their reputation, and will eventually come back to take a bite out of their sales. One of the reasons these things happen, is that we live in an interconnected world with very different laws and too few regulations.

When a product is deemed to contain hazardous material that could put its owners in harm's way - lead paint in children's toys for instance - it gets pulled off the market. However when a product that does not pose any risk to its users turns out to have been manufactured by cheap labor in poor working conditions, there doesn't seem to be much that a government can do. Those decisions are rather left up to the free market, a free market that is often times ill- or even uninformed, and primarily driven by financial concerns rather than ethical ones.

One consequence of this unfortunate lack or worldwide regulation is an incentive for countries with cheap labor wishing to attract international manufacturing jobs to preserve the 'cheap' status of their work force, even if it comes at the expense of its own well-being.

Some measure should be put in place to counter this incentive. Perhaps simply a "human rights tax": A variable tax added to any imported product, proportional to the offset in labor laws between the manufacturing country and the country of sale. It could prove to be an effective way to promote equality in labor laws, raise the barrier of entry to international markets for products manufactured under suspicious labor conditions, and protect local production. It could stop the bleeding of manufacturing jobs towards countries with cheap labor, but perhaps most crucially it would stress the importance of labor rights for any economy rising based on its manufacturing capabilities, and would make sure that the evolution of labor ethics in this world of shifting powers does not go backwards.


Recommended Media:
- How the US lost out on iPhone work - NY Times article
- Nightline Takes Cameras Inside China’s Foxconn Factories - Mashable post
- Blood Diamond - Movie (When you think about it, conflict diamond trade is quite a similar issue)

[image credit]

comments

February 27, 2012 at 9:18 AM Sareen

"However when a product that does not pose any risk to its users turns out to have been manufactured by cheap labor in poor working conditions, there doesn't seem to be much that a government can do"

That's very true. But at the same time, let's be realistic here. Do people care how their products are made? When parents are out buying Nike trainers for their kids, do they stop and think "oh no, are those made by people that don't have rights"? So, even though the solution you introduced, "human rights tax" sounds like a good option, we should also get people to CARE and be INFORMED where and how their products are being made. It might be difficult with some products, since, as you said some companies influence almost all gadgets. But they could do with other products like the trainers for instance? I dunno, I might be totally wrong. But I still feel like people don't care about others plights anymore...

February 27, 2012 at 10:32 AM Fadi

I think it's probably because the free market is jaded (on top of "ill- or uninformed") that regulation should step in. And people do care, just not enough. For instance there was a petition getting passed around to ask Apple to do something about the poor working conditions in FoxConn city (which Apple is currently addressing), but if you look at the number of signatures this petition managed to round up, it doesn't even reach a tenth of the estimated number of Apple customers, which basically means that the bleeding hearts of the world are a minority (how much time and effort does it take to sign an online petition, really ?). That's perhaps precisely why I think it is those same people who should push for a change in regulation, instead of going around collecting signatures every time a scandals breaks out.

August 7, 2012 at 10:40 AM Anonymous

i care. i do not buy from dow bacause they still have not cleaned up bopahl. or manufactures that violate human right. we hace the power. change starts with you.

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