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Purdue won't get what it bargains for with sweatshop monitors
>From economist's view, decision missed its mark
By George Horwich, For the Journal and Courier
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Did Purdue University make the right decision when it agreed provisionally to have two
organizations monitor working conditions in sweatshops that make Purdue-logo apparel? 

The whole issue of such monitoring was sparked by a hunger strike of students last spring. As part
of the terms of ending the strike, then-president Steven Beering appointed a committee of seven,
including faculty, staff and students, to study the issue and make recommendations on whether to
join an organization that would monitor wages and working conditions in sweatshops around the
world. The committee reported to president Martin Jischke and recommended that Purdue join both the
Worker Rights Consortium, which students at Purdue and other campuses are in the process of
organizing, and the Fair Labor Association, an older organization preparing a monitoring strategy
and headed by former White House lawyer Charles Ruff. 

It is hard to escape the conclusion that Purdue's decision was made under less than ideal
circumstances. It is doubtful that an informed decision can be made under threats of violence,
including violence to one's self. And I can find no evidence that any experts on sweatshops and
their role in economic development were consulted. Purdue has any number of economists and
agricultural economists who know a great deal about this subject but, as far as I know, were left
out of the dialogue. 

Sweatshops appear in the developing world when farm productivity begins to rise and millions of
farm workers are no longer needed. The surplus labor eventually finds employment in an assortment
of manufacturing enterprises in which working conditions and wages are abysmal by advanced
industrial standards, but are many times better than the previous conditions under which the
workers subsisted. In my own travels to Asia and other developing regions, I never encountered a
worker who wasn't grateful for the improvement in the quality of life since leaving the farm. 

A statement signed by 250 of the nation's leading international trade and development economists
notes that multinational corporations in developing countries tend to pay wages above the local
prevailing level; where subcontractors are involved, wages are no less than the prevailing level.
Nor are the wages stagnant. Nicholas Kristof and Sheryl WuDunn, two New York Times Pulitzer
Prize-winning reporters, cite (in their recent book, Thunder from the East) the steady,
often-spectacular growth of sweatshop wages over time. 

Can monitoring do any good? With some possible exceptions, such as providing information about
low-cost safety standards, I would say not. The goal of both the FLA and WRC is to seek compliance
to a "living" wage and to "decent working conditions," which they will define. But wages in excess
of productivity levels, which can be extremely low in developing countries, cannot be decreed or
legislated without causing unemployment. Forcing the thousands of companies worldwide that produce
collegiate apparel to provide reams of information and to conform to U.S. safety and working
standards (as Purdue's code on overseas suppliers already absurdly requires) can only raise the
cost of, and discourage, investment in the parts of the world that need it most. For those who, as
a result, lose their sweatshop jobs, the alternatives are bleak, indeed, and will fall heavily on
Purdue's shoulders.

Nor are the motives of either the FLA or the WRC above suspicion. The FLA was created in response
to AFL-CIO pressure at the White House to do something to restrict competition from low-wage,
low-cost foreign manufacturers. Though no longer affiliated with the FLA, the AFL-CIO sits on the
board of the WRC. Organized labor, rebuffed in its efforts to secure trade protection from the
White House and the Congress, has pursued every conceivable indirect means to impose higher costs
and reduce the competitiveness of foreign producers. 

In this context it is hard to take seriously the humanitarian claims of the monitoring
organizations or to be enthusiastic about the roughly $6,000 (1 percent of gross sales) Purdue must
pay to each of them every year for their services. No one who follows these matters should fail to
read the statements of the longer-term goals of Purdue Students Against Sweatshops, the local
organizing group: to end, not reform, sweatshops; to end the "exploitation" of labor; to carry the
struggle beyond the workplace into the homes of workers. This, of course, is the rhetoric of
Marxism, the class struggle, and liberation theology. Is this what the world really needs? Should
Purdue, or any public university, be part of that mission?

Horwich is professor emeritus of economics at Purdue University.


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