What Makes a Sweatshop?

Washington Monthly has a fascinating piece this month called "Confessions of Sweatshop Inspector," which certainly has a lot of implications for this industry.

I have just returned from China, where diamond manufacturing is booming. According to the head of the Chinese Diamond Manufacturers Association, there are now 45,000 diamond workers in China, who are paid an average of $150 a month (and that is generally a real month, including weekends), as well as benefits. That is considered about average for the country. Most of the workers come from nearby villages, and are housed in dormitories during the work period.

From everything I’ve heard, some of the diamond cutting factories in China are among the best in the country and some – well – aren’t … (One person described the food at the factory he saw as "slop.")  The interesting thing is, even if a company is committed, through devices like Best Practice Principles, to having responsible policies, there are ways around that. A factory may have its working conditions inspected by an outside firm, but as the article notes, not all inspection firms are equal:

[Some monitoring firms] specialize in performing as many brief, understaffed inspections as they can fit in a day in order to maximize their own profits. That gives their clients plausible deniability: problems undiscovered are problems avoided, and any later trouble can be blamed on the compliance monitors. It is a cozy understanding between client, monitoring company, and supplier that manages to benefit everyone but the workers.

The article notes what a truly responsible company needs: transparency, and a long-term commitment to its factory. Yet transparency seems to have its limits. For instance, the article says …

ordinary consumers searching on company Web sites—Walmart.com, Nike.com, etc.—can find out almost everything they need to know just sitting at their desks. For instance, just now I learned from Wal-Mart’s latest report on sourcing that only 26 percent of its audits are unannounced. By contrast, of the inspections Target conducts, 100 percent are unannounced. That’s a revealing difference.

Certainly. But how many consumers know the information is out there, or where to look, or how to evaluate it?   And even if they do know it’s out there, how many will bother to check?

The article also mentions that Nike, which has been pilloried in the past for its labor practices, now has some of the best factories out there. And, yet, people still boycott Nike. I’d compare this to the diamond business, which is a far better trade than it was several years ago, but is still criticized based on its past record. That may be something we all have to live with. This industry is still in far better shape now that things are being cleaned up.

Finally, I have heard sightholders complain about the Best Practice Principles and other systems, noting they have seemingly silly rules about "lights in the bathrooms."  But this article reminds us that there are serious issues here. Abuses do happen, and it’s important for businesses to keep up standards. (And for the record, I would never want to use a bathroom with no light in it.)

Anyway, the article is very interesting, and well worth a read …