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Made in China: What Price Profit?

Just like Santa’s workshop! Except these elves work 15 hours a day, 7 days a week and earn 30 cents an hour.

This post is a follow up to [The New Gilded Age].

The Guardian has [a chilling article], written by the author of [The Real Toy Story] — an exposé of the Chinese toy manufacturing industry — that details just how sordid are the conditions that give rise to the kinds of product recalls that American toy companies have experienced recently. The article’s author, Eric Clark, details the advantages of moving toy production to China for American companies, like Mattel, that have their eyes forever focused on the bottom line: plentiful cheap labor, elimination of plant overhead and ability to negotiate lowered production costs on new products, which reduces further their competitive risks. But his description of conditions for Chinese workers reads like something out of our own dark industrial past:

The workers, mostly young women, shuffle from building to building. They could be on their way to school – if they did not appear so exhausted from working most of their waking hours. They have traveled in by bus from rural areas up to three days journey away – part of the biggest movement of people in human history. Shifts can last 15 hours a day or more, seven days a week – unlawful, but not uncommon in the peak toymaking season. Inside the fetid dormitories, their only living space, and often packed illegally with as many as 22 to a room, they collapse into curtained-off bunks. At lunch breaks, thousands of them in uniform, ID cards dangling on ribbons, pour onto the streets.

Compare that with this [excerpt from a letter] I found from a young woman who worked at the Triangle Shirtwaist Factory, writing about her working conditions in early 20th century New York:

The day’s work was supposed to end at six in the afternoon. But, during most of the year we youngsters worked overtime until 9 p.m. every night except Fridays and Saturdays. No, we did not get additional pay for overtime. At this point it is worth recording the generocity (sic) of the Triangle Waist Co. by giving us a piece of apple pie for supper instead of additional pay! Working men and women of today who receive time and one half and at times double time for overtime will find it difficult to understand and to believe that the workers of those days were evidently willing to accept such conditions of labor without protest. However, the answer is quite simple — we were not organized and we knew that individual protest amounted to the loss of one’s job. No one in those days could afford the luxory (sic) of changing jobs — there was no unemployment insurance, there was nothing better than to look for another job which will not be better than the one we had. Therefore, we were, due to our ignorance and poverty, helpless against the power of the exploiters… As you will note, the days were long and the wages low — my starting wage was just one dollar and a half a week — a long week — consisting more often than not, of seven days. Especially was this true during the season, which in those days were longer than they are now. I will never forget the sign which on Saturday afternoons was posted on the wall near the elevator stating — “if you don’t come in on Sunday you need not come in on Monday”!

Truly, the sins of the past are upon us again. Instead of providing incentives to Chinese manufacturers to improve the lot of the young women who produce our toys (which might require returning more profits to the producers), or moving production back home (which would entail even further reduction in profit) American companies are more than willing to exploit conditions that would be illegal in their own country in order to maintain their margins. According to Clark, of the $10 retail cost of a Barbie doll produced in China, only 35 cents goes back to the people who produced it. Eager to cut their own costs and improve productivity, is it any wonder that Chinese subcontractors cut corners?

This opens up a dilemma for American consumers: the toys under the Christmas tree are tainted — if not literally with lead paint, than figuratively with support of an unjust labor market. How much would consumers be willing to spend — in the form of higher-priced domestically-produced goods, for example — to put pressure on the toy industry to change its ways?

The New Gilded Age

When I wrote about the [bad domestic effects] that a globalized economy can have on our lives, I wasn’t thinking directly of threats to health — but that’s exactly what the recent recalls of Chinese products sold in this country force us to face. Tainted toothpaste is one thing, but it’s almost unimaginable that after all these years, we are actually again dealing with the threat of lead exposure in children’s products — thanks to the greedy bastards at Mattel. Today Mattel CEO Robert Eckert [apologized] for the danger his company introduced into American households by blaming it on a bad subcontract. Whew! Don’t worry Mom, it was just a bad subcontractor — you know how that can be.

It’s amazing to watch the Gilded Age of the late 19th and early 20th centuries — when companies operated with practically no oversight or regulation — playing out all over again thanks to “globalization”. Businesses flock to nations without labor unions or meaningful regulations to manufacture their products at a fraction of the cost it would be in an industrialized nation with responsible policies in place and then pocket the (huge) savings. While, no doubt, crossing their fingers and muttering a prayer skyward in hopes that they don’t end up harming customers back home. Mattel’s prayers weren’t answered today — but maybe ours were. Maybe this incredible fiasco will finally force craven politicians to start demanding meaningful safeguards on outsourced manufacturing or even — shock — institute significant levies and penalties on companies that play fast and loose with our safety. Who knows — the risk of such costs might actually convince American businesses to keep their manufacturing in America.

UPDATE 8/15: Bad news about Chinese manufacturing is [good news] for the few remaining made-in-America toy companies.

UPDATE 8/19: A new post that details the moral cost to us all of current toy industry standards, [Made in China: What Price Profit?]

First look: Sicko by Michael Moore

Michael Moore’s latest opus, Sicko, opened here in New York City yesterday and, as one would expect, was very warmly received. The venue — a theater nestled cozily between Lincoln Center and the Ethical Culture School — was a bit surprising, though. The Upper West Side of Manhattan is the mothership for liberals in this country — a safer space for the ultra-liberal Moore could hardly be imagined. In fact, the middle-aged woman I sat next to (who was practically hopping in her seat with anticipation) declared, “He should be here, after all, we’re his people!” One might have expected Moore, ever the provocateur, to have chosen a more controversial spot to debut his take down of the US health care system like, say, Oakland California — home of the Kaiser Permanente health maintenance organization (which comes in for special attention in the film) — but maybe he had something else in mind. More on that in a moment.

Sicko is not a documentary so much as it is a political polemic, though like a documentary it makes its case through presentation of personal histories of people who have suffered extraordinary hardship at the hands of the for-profit health care system we “enjoy” in this country. Likewise, Moore uses interviews with people living and working in Canada, Britain, France and (most dramatically, Cuba), to promote the virtues of socialized medicine. And make no mistake about it, Moore wants socialized medicine. He states it flatly in the [Prescription for Change] that is posted on his website:

1. Every American must have full, uninterrupted health care coverage for life.
2. Private, for-profit health insurance companies must be abolished.
3. Profits of pharmaceutical companies must be strictly regulated like a public utility.

For Moore, there is a fundamental moral flaw in a health care system designed to maximize profits of the providers of treatment (especially the drug companies) and of the insurance companies that are supposed to fairly dispense payments for that treatment. Whatever its virtues on paper, in fact such a system ends up hoarding profits at the expense of sick people who must pay exorbitant sums out-of-pocket to try and get the care they need. Or die trying.

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Who owns the war, now that Rumsfeld is gone?

A year ago [I was wondering] what effect Condi Rice would have on the Cheney-Rumsfeld alliance. A year later, we know. Frontline on PBS has produced an hour-long documentary entitled [Endgame] that details the unbelievably incompetent war strategies of the past 4 years and discloses Rice to be the principal sponsor of the “surge” — a strategy that finally vanquished Rumsfeld. As Colin Powell famously warned Rumsfeld during the manic run up to the war, “you break it, you own it.” Well now it appears that Rice has inherited ownership.

From the start, there was no strategy from the Pentagon for dealing with the possibility of an insurgency and the only real strategy (if it can be called that) was to exit Iraq as soon as possible. Repeatedly caught unaware, the Pentagon and White House lurched hither and yon, all the while ignoring what appeared to be an apparently successful strategy happening right under their noses. In May of 2004, acting on his own, outside the game plan from Washington, Col. H.R. McMaster had secured the city of Tal Afar through what he called “Clear-Hold-Build” — a strategy of using sufficient troops and force to clear insurgents from the city and then maintain troop levels to maintain security while rebuilding could take place. But more than a year would pass before this news would make its way back to the White House. Leading her own military reconnaissance — in a bold challenge to Rumsfeld’s power — Rice had Philip Zelikow scout Iraq in the fall of 2005. He reported back to her on McMaster’s apparent success and, in October of that year, she made an appearance before the Senate Foreign Relations Committee where she promoted a new strategy of “Clear-Hold-Build” in a stunning repudiation of Rumsfeld’s leadership. It was the beginning of the surge and the beginning of the end of the Cheney-Rumsfeld lock on power.

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PDF2007: Tech Elite Meets, Declares War on Elitism

Esther Dyson (foreground) leads a panel on Navigating the New Media System

The 4th annual Personal Democracy Forum was held recently here in New York. The [list of speakers], including Thomas Friedman, Eric Schmidt, Esther Dyson, Seth Godin and Robert Scoble, was the proverbial Who’s Who of the digerati. They gathered before packed audiences to comment on the role of technology in “flattening” archaic political structures and transferring power to the grassroots — Democracy 2.0, you could say. I attended a few of the sessions and came away with these impressions…

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