Foxconn Factories, Sweatshops, and the Revealed Preferences of Chinese Workers

So it turns out that the much-lauded This American Life story from a few months back about working conditions in the Foxconn factories in China which produce Apple products was factually flawed. While there weren’t outright lies, exactly, there was certainly some coloring/blending of the truth, enough so that TAL is retracting it, a first for the program. This is of course embarrassing for TAL, but I’m also somewhat sympathetic to the defense put forward by Mike Daisey, who developed the piece: the story was originally created for his Off-Broadway one-man show, which obviously has much lower standards for factual accuracy than journalism, and he never particularly claimed to be a “journalist” anyways.

In any case, I actually think there are much bigger issues with the story other than some factual fibs, which have to do with the general approach of how it is framed (some of which Matt Yglesias touches on here). It’s of course true that working in one of these factories isn’t the best of all possible worlds. But if we’re going to be bemoaning the terrible conditions in Chinese manufacturing, we need to be clear about in comparison to what. When most Westerners hear about the hard lives of factory workers in China, I think they implicitly are comparing it to the employment opportunities and circumstances in their own societies. And they, quite understandably, think they’d never want that kind of job. But that of course is the reason why these jobs aren’t in America but are in China, a much much poorer country, where the other opportunities available for workers aren’t any better, and are often noticeably worse.

Chinese factories offer long hours, low (by Western standards) pay, and tough physical conditions. And yet there’s still huge demand from Chinese laborers wanting to move from rural to urban areas to seek these kinds of jobs. Indeed, when a new Foxconn factory opened in January, thousands of people lined up for a chance at a job. If we take the idea of revealed preferences seriously, it’s clear that Chinese workers think these jobs are better than the alternatives available to them, which for many of them is back-breaking work on low productivity, subsistence farms.*

To come back to last week’s discussion on misplaced Western advocacy efforts, I’ve long been at best ambivalent about anti-sweatshop campaigns, which were huge a decade-plus ago, then mostly died out, and now are somewhat coming back in the form of these Foxconn and other similar stories. It’s possible, under certain targeted circumstances, for Western pressure and the leverage of Western markets to be used to improve labor conditions in developing countries – the best example of this is probably the US-Cambodia textiles agreement, which allowed Cambodia the opportunity to increase its quota share of the US textile market by voluntarily increasing its labor standards. But to the extent that broader anti-sweatshop campaigns served simply to lower demand for these goods in Western markets and hence put some of these factories out of business, they probably did more harm than good. It’s easy to complain about workers being “exploited by the global economy”, but the fact is, in the absence of opportunities presented by the global economy, these workers could just as easily be exploited by the local economy, probably to much worse – if less visible – effect. There’s a reason so many millions of Chinese laborers want to get off the farm and into factory jobs, even when the conditions in these jobs are shockingly bad to Western societies. Advocacy efforts aiming to help the world’s poor shouldn’t be trying to stop them.

* It’s worth noting that this argument doesn’t apply in circumstances where the jobs don’t actually represent revealed, informed preferences, i.e. if workers are forced to work against their will, are cheated or lied to by their employers, or are too young to make an informed decision about where and whether to work. Thus the case for a basic set of universal labor laws proscribing practices such as slavery and child labor.

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