March 25, 2012

Exploit the exploited

Colin Read: Everybody's Business

---- — Thanks to the brilliant journalism of Mike Daisey, we have come to learn about factory conditions at Apple manufacturing plants in China.

Daisey's commentary struck such a nerve that we have been buying tickets to his one-man off-Broadway rants and paying his speaking fees as he crosses the country to share his experiences.

His story was compelling. He told of his conversations with Apple factory workers who could not even hold a glass of Starbucks coffee because their exposure to the glass-cleaning produce n-hexane induced neurological disorders.

He spoke of many 13- and 14-year-old workers he came across who worked 60-hour weeks in the factories. He even told how whole sections of factories would explode on occasion because of dusty working conditions.

His story rang true because he told us what we wanted to believe. He also invoked that journalistic tradition of telling us a story compelling in its irony — part of the Apple image is in its social integrity.

Unfortunately, the story was a lie. Daisey came clean on a Public Radio broadcast called "This American Life" with host Ira Glass, who had also been duped and then devoted an entire show to correcting the lies.

Some have concluded that Daisey's journalistic license was not entirely inappropriate. After all, there are surely under-age employees in factories elsewhere in China, as there are in the United States.

There have also been urban legends of n-hexane-afflicted workers, there and elsewhere, even if Daisey now admits he never met any. And part of a factory did explode due to dusty conditions, but it was not a Foxconn factory that supplies Apple.

I am not an apologist for Apple or for China, whose greenhouse-gas emissions recently surpassed ours. Their more highly concentrated political power is not to our liking. And Apple's monopolistic tendencies are almost unrivaled in modern industry.

There are, however, economic lessons we can take away from the Daisey episode, beyond journalistic ethics. For instance, it is true that workers in China do not have the same protections afforded here. For decades, we abused our workers. Only after they would not stand for it any longer did we pass legislation to impose health and safety standards and reduce the hours in the work week or compensate employees who have long work weeks.

We revamped these regulations over the last century. They remain a work in progress. The United States does not have the lowest incidents of occupational accidents, and our work week is still longer than some European competitors. Our worker compensation is not quite the best in the world, but our standard of living has improved as our economic might increased.

If we want to secure a high standard of living, we can demand higher wages, and see our jobs go offshore. Or, we can have our income go further by saving $60 on an iPhone made in China.

Neither of these options is entirely appealing. Instead, we can insist China adopt the same wage, hours and factory standards we legislate here. Of course, we don't want China's factories to tolerate accepting fake identifications as we do here, and we certainly won't tolerate them cutting working-condition corners as we sometimes discover in our back yard.

If China does as we wish, Apple jobs will go to Vietnam, perhaps. We can then tell Vietnam how to run their businesses and find the jobs go to Indonesia, then Bangladesh, then ...

If we manage to shut down China's errant factories, workers will leave the cities and return to the farms, where life was harsher, lower paying and more dangerous.

They will be impoverished, the problem will be exported, and China will be taught that they must perform their economic reforms in a generation — what took us five generations to do here.

I'd rather focus on keeping jobs in America. It might mean taking away some corporate-tax loopholes, which politicians have been reticent to do for fear of cutting off the hand that feeds them.

It appears easier and more profitable for Daisey to demonize China. Some may argue the ends justify the means. However, a valiant lie remains a lie, even if it is easier to accept than a more uncomfortable truth back home.

Try as we might, we can't choose our facts, as compellingly attractive as a more self-serving dialogue may be.

And, we all live in glass houses.

Colin Read is the chair of the Department of Economics and Finance at SUNY Plattsburgh. His tenth book, Great Minds in Finance — the Efficient Market Hypothesists, is coming out this fall. Continue the discussion at