Sunday, November 25, 2012

Outsourcing: The Debate Outside of 5th Period Gov

        A fire in a clothing factory in Dhaka (the capital of Bangladesh) broke out late yesterday afternoon, killing more than 100 people. The Tazreen Fashion factory was multistory and had no fire exits on the outside of the building.  Of course, the owner of the building claimed the factory was perfectly safe to work in. The fire, which may have been caused by an electrical short circuit, started on the ground floor and quickly spread to the entire building.  Firefighters were able to contain the fire this morning but not before 112 people had died.

        Fatal fires like this are fairly common in Bangladesh, where there are about 4,500 factories employing more than 2 million people.  Clothing like the textiles produced by the Tazreen Fashion factory make up up to 80% of Bangladesh's exports, and much of this clothing is exported to Western countries like the United States.  US businesses obtain cheap labor by outsourcing and cheap materials by buying from foreign countries.  When we think about political issues like outsourcing, we tend to focus on the domestic side of such issues while ignoring the international side.  Yet the actions of US businesses clearly have large repercussions for the citizens of foreign countries.  Should US businesses be allowed to continue outsourcing jobs to countries like Bangladesh (where working conditions are far below those of the US)?

11 comments:

Kathryn D said...

Looking at this fire, I believe that we should stop outsourcing if it endangers lives. During the 5th Period debates, we seemed to focus more on the economic issue of outsourcing, which still led me to believe that domestic jobs are good. Now here's another reason to find ways to either incentivize businesses to keep jobs in the U.S. where the Progressive Era improved job conditions, or penalize businesses that send work where it is so cheap that it endangers the lives of those working on it.

In one way this is much like the Triangle Shirtwaist Factory fire in 1911; let's only hope that improved working conditions for all people results from this tragedy.

Unknown said...

Realistically, I don't think it is practical or a good idea to completely cut outsourcing. Outsourcing will continue to happen, and there will continue to be far worse working conditions in countries such as Bangladesh. However, there is not much that the U.S. can do about such working conditions because of the quantity (4500 factories in just Bangladesh alone) of factories and the fact that they are located in foreign countries with much different rules and regulations. Therefore, especially with unemployment at such a high rate currently, I am going to stick with the Wings of Liberty Party and say that I think the best solution would be to simply reduce outsourcing, however it is we do so. Not only would this be greatly advantageous for our domestic economy, but would also help the foreign labor exposed to dangerous working conditions such as this fire in Bangladesh.

Grace Chan said...

I think that outsourcing to foreign countries should be made illegal. This fire reminds me of the Triangle Shirtwaist fire from 1911. This fire was over 100 years ago, but the conditions sound exactly the same. It is disturbing that companies continue to employ people in factories that are like the ones from the early 1900's in the U.S. It seems that with all these new machines and computers, companies would be able to at least build safe buildings for their factories. I am shocked that many companies continue to outsource and employ people in these terrible working conditions just to save money. Their greed has cost people their lives. Furthermore, if outsourcing were made illegal, then more companies would stay within the U.S. and create more jobs, which in turn would help improve the economy.

Unknown said...

I'd like to respectfully disagree with Kathryn and Grace. While I desperately hope that foreign countries will initiate reform to improve working conditions for their citizens, it is well within their jurisdiction as sovereign nations to have (or lack) such legislation. It is not the responsibility of the U.S. to police such activity. Similarly, while I would hope that businesses choose not to outsource for both ethical and economic reasons, (contrary to the Wings of Liberty Party's beliefs) I personally don't think that it's our government's responsibility to force businesses into "bringing jobs back" (especially considering many of these jobs never existed in the US in the first place). The government should by no means penalize businesses for such practices; that would most likely end up backfiring in this current economic state. While the government should encourage businesses not to outsource, I'm not altogether sure yet if tax-cut incentives are the answer.

That said, I hope that the human rights of these workers will be protected. Perhaps international pressure through organizations such as the UNHRC could motivate foreign manufacturers to improve working and safety conditions. I believe this would a far more effective solution than putting an abrupt end to US outsourcing (foreign workers still depend on what little income they receive from these manufacturing jobs, this wouldn't be in their best interests).

Robert Pollock said...
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Robert Pollock said...
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Robert Pollock said...

Although I think that the working conditions in countries like Bangladesh are absolutely terrible, I don't think banning outsourcing to these kinds of countries would help anybody. As this post mentions, millions of people are employed in these factories, and much of the work done in these factories is done to produce goods for western nations like the U.S. If the U.S. and other countries were to ban outsourcing to Bangladesh, millions of workers in Bangladesh are going to instantly lose their jobs as they would have nobody to produce goods for.
I don't think destroying the economy of every country that uses cheap labor is really going to help these workers.

I also don't think that penalizing businesses that send jobs offshore would be a good idea either as that would raise the costs of goods which would lower demand for these goods. With less demand for goods, there would obviously be less manufacturing and more people in these countries would lose their jobs.

I think that incentives in the U.S. to reduce outsourcing would have a similar affect. For the cost of labor in the U.S. to be competitive to the cost of labor in these factories in Bangladesh, we would have to lower the minimum wage significantly, get rid of tons of benefits, and reduce regulations a lot. Not only would this be bad for our workers, but I think it would also be worse for workers in places like Bangladesh. The population growth rate is so high in Bangladesh that the population is set to increase by 100 million people before it finally stabilizes(1). If we significantly reduced outsourcing rates to Bangladesh through major incentives, Bangladesh's economy would have a very tough time adding the jobs they need to accommodate a growing workforce. I think that this higher unemployment rate would force workers to take jobs with terrible conditions and lower pay.

Overall, what I'm really trying to say is that we shouldn't be hurting the economies of these countries if we want working conditions to get better. Economic growth is going to be a major factor that determines how these working conditions will change. As studies have shown(1), economic growth leads to a higher income. This is true in Bangladesh where a middle class is gradually forming(2). As demonstrated in China, higher incomes have really made it possible for workers to successfully pursue better conditions. This is because more money means these people are less dependent on each paycheck and are able to instead do things like protest. As incomes rise in these countries, I think we will see a trend similar to China where working conditions have improved significantly over the years.

Although I am optimistic that things will get better eventually, I still don't think that it is enough for us to wait around for working conditions to improve when people are clearly getting hurt now. As this article mentions(3), the inspections done in factories in Bangladesh are filled with so much corruption that they accomplish nothing. I think a good first step would be for countries like Bangladesh to find ways to actually enforce the rules they have in place. It might even be beneficial for countries like Bangladesh to seek outside help to make sure factory conditions are safe. As Andrew mentioned, it would also be beneficial to bring in help from organizations like the UNHRC to make sure that workers have their basic rights protected. Finally, I think that all countries that import goods from Bangladesh should advocate for better working conditions. It might not do that much but its better than doing nothing.
1)http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2740702/
2)http://www.pdx.edu/sites/www.pdx.edu.econ/files/grow_pov.pdf
3)http://www.nytimes.com/2012/04/24/business/global/in-bangladesh-strong-promise-of-economic-growth.html?pagewanted=all
4)http://rendezvous.blogs.nytimes.com/2012/11/25/bangladesh-fiddles-while-its-factories-burn/

Michelle Yeung said...

I think that the solution in this situation would be in safety regulation. It is unrealistic to expect companies to stop outsourcing to other countries, where the production prices are significantly lower just because lives may be endangered. It is more realistic to instead try to require certain safety regulations on the factories, such as fire exits. This way, companies can still maintain their relatively low production prices, at the same time ensuring that factories are actually safe rather than relying on the word of some factory owner.

Unknown said...

While this fire and horrible working conditions are a tragedy, outsourcing is important to the global economy. Reducing outsourcing will not necessarily help foreign laborers whose low wages and poor working conditions make them valuable to the global economy. Without outsourcing, these laborers and horrible conditions will still exist.

The basic argument for free trade is that countries specialize in what they do well, whether it is providing cheap labor or skilled workers, and the entire global economy benefits (in theory). Banning or forcibly restricting outsourcing (ie tariffs) and free trade will help no one and hurt us as well. US labor can never be competitive to low wage Bangladesh workers so we need to consider tactics that play up our own strengths while taking advantage of the global economy.

Ultimately it is Bangladesh's responsibility to raise its own standards just as we have over the years. Bangladesh and many other nations need to recognize that people are not machines. However, Bangladesh, with extreme overpopulation and poor economic conditions, cannot just raise wages and promise benefits immediately. Their needs to be a strong economy in place and strong leadership to improve the conditions for millions of workers.

While we should always be ethically minded and conscious of human suffering, we must recognize that the fate outsourcing and free trade is not merely a matter of opinion. Developing countries cannot change overnight, no matter what we do and change can take a long time to come about.

George Medan said...

I agree with Anthony on this one. Outsourcing has proven to be important for our own economy as well as that of others. We need it to keep providing steady jobs for those that work in the country, transport the goods, receive the goods, refine the goods and sell the goods here. If we just kill outsourcing in its entirety, thousands of jobs will be lost and economies will be hurt. Although this tragic event does remind us of that factory fire, in the end it isn't our responsibility but instead that of the country(Bangladesh). Just like many have already said, Bangladesh should soon wake up like America did and start enacting their own rules. But in the meantime, we shouldn't stop or stick our noses in because in the end it will hurt them and us.

Unknown said...

As we talked about in 5th period, I don't think it's reasonable to expect companies to keep jobs in the US when it's so much more profitable for them to outsource jobs to foreign countries. Forcing companies to keep jobs in the US could actually hurt our economy. A few months ago on NPR, there was a discussion on whether or not it was really a bad thing if solar panels were being produced in China rather than in the US. They stated many benefits of producing in China, one of which was that by producing the panels cheaply in China, the US was able to make more money on instillation and sales jobs than they would have from manufacturing. Also producing the panels cheaply kept the price of solar panels down, which leads to more people purchasing the product. I think that this debate applies to many products. Manufacturing jobs aren't necessarily the key to a strong US economy and I think it's more important to focus on jobs overall, rather than just the manufacturing jobs that are being outsourced.

Many of you have pointed out that this tragedy reminds you of the Triangle Shirtwaist Factory fire of 1911. Although tragic, this fire led to an increase in labor regulations and helped spark the progressive movement (http://www.laborrights.org/creating-a-sweatfree-world/sweatshops/news/12481) . In an ideal world tragedies like this would always be prevented, but it's unrealistic for us to assume that a developing country like Bangladesh won't make the same mistakes that we did when we were first transitioning into a more industrial economy. Hopefully, Bangladesh's government will learn and change because of this fire as we did after the fire in 1911.