Monday, October 14, 2013

Are they being exploited?

I had a conversation recently with a family member (let's call him Jim) who was quite passionate in claiming that workers in Asian countries like Bangladesh that produce clothing and other products sold by North American retailers are being exploited by their employers. Jim's argument was that these workers were paid only a fraction of what an average North American worker would be paid for a similar job, and that the other working conditions are not up to North American standards. Jim's solution to this apparent problem was that either (1) "the industry becomes regulated" or that (2) the North American producers "return those jobs back to North America", and thus stop exploiting the Bangladeshi employees while helping the North American middle class.

While on the surface potentially appealing, this (incoherent) reasoning tells us more about Jim's subjective preferences than about the actual nature of the relationship between the Bangladeshi employees and their employers. Why? Because a third party evaluation of any relationship between two people is always subjective.[1] This evaluation reveals the emotional reaction to a particular relationship. In this case, Jim's labeling of the relationship between the Bangladeshi employees and their employers as "exploitative" is an indication that Jim doesn't like the terms of this relationship. He would like the workers to get more from their employers. Maybe we would all like the workers to get more for their labour, but how much more should that be? The answer will vary from person to person.

What we can, however, state as a fact, is that the Bangladeshi workers chose to work for their employers. This implies that, given the available alternatives, these people thought working in the Bangladeshi textile industry would be the most preferable option. For example, some may have left their employment in agriculture as a less preferred option. For them, the working conditions in the Bangladeshi textile industry were good enough to persuade them to leave their previous occupation. Note that the Bangladeshi agricultural labourers did not base their occupation change decision on the working conditions of an average North American textile worker. These conditions are irrelevant in this context. What is relevant are the alternatives available to the Bangladeshi people, and being an average North American worker is not among those alternatives (at least not under the current immigration policies).

Those that argue that the Bangladeshi employees should be treated by their employers similar to how the North American  employees are treated are implicitly arguing that someone should persuade the employers to give up more of their resources. Who would this persuader be and what would the "persuasion" entail? Usually, the suggested persuader is a government agency and the persuasion technique is a threat of confiscation of the employer's physical or financial assets. Some of the economic consequences of such "regulatory" approaches are described here.

However, using the threat of expropriation to force the employers to change their relationship with the employees is not the only available alternative for those who want change. For example, those that are not satisfied with the conditions current employers are offering to their employees, can use their own resources and offer better conditions to these employees. This way, instead of using their resources and energy on persuading the government to use the threat of force (and, again, more taxpayers' resources) against the current employers, the dissatisfied third parties can, in fact, demonstrate in practice their care for the "exploited" Bangladeshi textile workers. The same way the current employer offered those Bangladeshi workers something better compared to their previous employment, now those who think this is not good enough, can offer something better. This would surely be better for the Bangladeshi workers than sending them back to their previous, less preferred, employment if we were to follow the second "solution" and "return those jobs back to North America".

[1] The assumption is that the relationship is voluntary, which means that one party is not forced into the relationship under a threat of physical force.

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