Tag Archives: global supply chains

dollarIn early June, it came to light that last October, Walt Disney World Orlando eliminated the jobs of 250 data systems employees. The move made national news not because so many workers became jobless, but because Disney offered a severance bonus to employees who remained with the firm long enough to train the young immigrant workers who would assume their tasks.

The heartlessness of this move left workers and consumers reeling. A former Disney employee told a reporter for the New York Times, “It was so humiliating to train someone else to take over your job. I still can’t grasp it.” Outrage spread across news and social media, fueled by dismay that a company so closely associated with wholesome family entertainment would betray its workers in this way.

Many observers lamented loopholes in the H-1B visa program used to secure the replacement workers’ entry to the US, and endorsed reforms that would reduce impacts on American workers. Relatively few seem to grasp that Disney’s moves are rooted not in policy loopholes or corporate malfeasance, but instead are part and parcel of capitalism. Outsourcing, layoffs and swiftly severed ties – this is what capitalism looks like. As Karl Marx pointed out in his Manifesto of the Communist Party, workers, who under capitalism “must sell themselves piecemeal, are a commodity, like every other article of commerce, and are consequently exposed to all the vicissitudes of competition, to all the fluctuations of the market.” The “increasing improvement” of production methods “ever more rapidly developing, makes their livelihood more and more precarious.” Manual workers confronted this reality decades ago, as plants in the United States closed and production moved overseas to take advantage of lower-cost labor. Increasingly, professional workers are also feeling the pain of displacement. And there is only more to come.

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Screenshot_117This is the third post in a four part series. Start at the beginning with: Whimsical Branding Obscures Apple’s Troubled Supply Chain.

I cannot watch this 2003 Apple iPod commercial without shaking my hips, even in the midst of delivering a lecture or conference presentation. In fact, I struggle deeply to refrain from jumping around in an ecstatic dance of joy.


This commercial moves me. But, why?

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The Trouble with Apple

Suicide at Foxconn. Poisoned workersColluding to inflate the price of e-booksTax evasion (albeit, legal). Shady suppliers who can’t toe the line of labor or environmental laws in China. Apple’s reputation has taken a hit in recent years. Or, so it seems it should have. But, despite the fact that news reports on the company’s behavior and supplier relationships have been more negative than positive since 2012, Apple’s revenue has continued to climb and break records.

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The current issue of the journal New Technology, Work and Employment features two articles on Foxconn in China, both of which are free for one month.

As described in the editorial to the issue by Debra Howcroft and Phil Taylor:

“These papers in different ways are concerned with the production of electronic consumables by Foxconn,the Taiwanese-owned multinational supplier, which is China’s leading exporter. … The first of the articles provides the remarkable testimony of Tian Yu, a young female migrant worker, who attempted suicide by jumping from the fourth floor of her dormitory accommodation. Tian’s account has been crafted with great skill and sympathy by Jenny Chan.”

“The second article locates this narrative in the broader political-economic context of the buyer-driven value chain, in which Apple establishes parameters and control over price-setting, production processes and product delivery from its suppliers, notably Foxconn. Based on extensive fieldwork and thorough documentary analysis, Chan, Ngai and Selden analyse the consequences of this asymmetrical power relationship.As the scale of production has ramped up, Apple’s ‘value capture’ and profits have soared while Foxconn’s margins have flatlined, the outcome being massive intensification of work and a harsh workplace managerial regime.”

On April 24, 2013, the garment industry experienced the worst disaster on record when Rana Plaza in Dhaka, Bangladesh, collapsed killing 1,129 workers and injuring 2,500 more. In the few years preceding the collapse of Rana Plaza, hundreds had been killed in fires and other building collapses, leading activists to campaign for more brand name responsibility.

The Rana disaster finally resulted in over 70 companies, mostly European, signing the Accord on Fire and Building Safety in Bangladesh.

The Accord was rejected by most US companies as creating too much liability and involving special interests (i.e. unions), precisely two of its strengths according to labor rights experts. Instead US companies struck out on their own in July with the Bangladesh Worker Safety Initiative agreement (signed by 17 companies, led by Wal-Mart and the Gap).

Here we present a forum on these recent events with commentary from three sociologists who are experts on global apparel supply chains and the struggle over labor rights in factories in developing countries.

Jennifer Bair provides an in-depth examination of the differences between the Accord and the Wal-Mart/Gap agreement.

Jill Esbenshade argues that the Wal-Mart/Gap agreement is actually a step backward for labor rights.

Gay Seidman discusses the obstacles to improving basic factory health and safety conditions in developing countries in general, argues that government involvement is necessary for real change, and evaluates the recent announcement by the Obama administration that it is suspending trade privileges for Bangladesh due to concerns about labor rights violations and safety.

On the morning of April 24, 2013, Rana Plaza, an eight-story building in Bangladesh that housed five garment factories, collapsed. When the search and recovery operation concluded on May 13, the final death toll stood at 1,129 workers, making it one of the worst industrial workplace disasters in history.

Media coverage of this event added fuel to a longstanding campaign by local and international unions and NGOs to address what was, well before this latest tragedy, a crisis in building and fire safety in Bangladesh.

As a result of this publicity and activist pressure, over 70 companies, mostly European apparel brands and retailers, have signed a factory safety agreement called the Accord on Building and Fire Safety in Bangladesh (pdf). These include H&M (largest global buyer from Bangladesh), Carrefour and Tesco (the second and third-largest retailers in the world), and Inditex (world’s largest fashion retailer and owner of the Zara brand). The Accord also has the support of two global union federations, several leading labor rights groups, and the International Labour Organization.

Notably absent from these signatories, however, are the American buyers sourcing apparel from Bangladesh. Although a few U.S. companies signed on —specifically, Philips Van Heusen, American Eagle, Abercrombie & Fitch, and Sean John Apparel—most of the country’s leading retailers have not. Instead, earlier this month they announced an alternative program, the Bangladesh Worker Safety Initiative (pdf).

Why did America’s largest retailers, including Wal-Mart, Gap, J.C. Penney, and Macy’s, decline to join a program that enjoys broad support and buy-in from multiple stakeholders, opting instead to propose their own alternative initiative?  I argue that the answer becomes clear if we look more closely at the content of each plan.

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Following the recent collapse of a garment factory in Bangladesh that killed 1,129 workers and injured 2,500 more, over 70 companies, mostly Europeans, signed the Accord on Fire and Building Safety in Bangladesh. This Accord was rejected by most US companies, who instead announced the Bangladesh Worker Safety Initiative agreement, led by Wal-Mart and the Gap and signed by 17 companies.

The Wal-Mart/Gap agreement recreates the primary weaknesses of private monitoring, the centerpiece of corporate social responsibility (CSR) in the global apparel industry for over a decade.

The consensus among researchers is that CSR monitoring has done little to improve the industry.  Although there is evidence that standard payment of wages and health and safety conditions have improved in some factories, overall we have seen a decline in real wages, a rise in the use of temporary and contract labor, the continuation of millions of dollars in wage theft, and the deaths of workers by violence, fires and building collapse.

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In the past few months, two disastrous factory fires and a massive building collapse have reminded us how dangerous apparel factories can be: airborne lint and dust can catch fire from an electrical spark; reverberating machinery can collapse weak structures.

Our shock should remind us of something more, however: these disasters were entirely preventable. In the century since New York’s Triangle Shirtwaist factory fire, we have learned how to avoid industrial tragedies.  Labor activists, government reformers, consumer advocates and even enlightened employers know how to protect workers’ health and safety;industry groups and the ILO have long published reliable standards for decent work.

We know what measures create safer working conditions, and we can calculate minimum wage levels that allow workers to feed their families.  Most countries have passed laws that could protect workers from dangerous conditions and from exploitative employers; most brands have corporate codes of conduct that are supposed to reflect consumers’ desire to know that the shirts on their backs weren’t produced by slave labor.

Why, then, do we see so many factory disasters, so many deaths, in the 21st century? Why does it seem so difficult to prevent disasters that are, in fact, preventable? What might push employers to comply with basic health and safety laws, to protect workers from these entirely preventable disasters? And what international leverage might prompt governments to make sure their citizens are safe?

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