Now that I have gainful employment I’ve transitioned from renting books at the library to purchasing used ones online. Internet retailers are cool for nerds because they allow you to track in real-time the geographic movement of your package. The last book I bought, for example, started somewhere in the Northwest, was shipped to a DHL eCommerce facility in Auburn, WA, was then loaded onto a plane to be flown across the country to another DHL facility in Franklin, MA, after which DHL tendered it to the local post office in Franklin, who then drove it about 40 miles northeast to a post office in Brookline, MA where it was finally sorted and delivered to my doorstep. The whole process took about six days. Judging by the intricate journey traveled it probably involved the coordination of hundreds of workers. Did I mention that I paid $3 for the book with free shipping?
There’s nothing unique about the delivery route described above. Millions of packages make similar trips everyday. Many of the most profitable businesses in the world rely on complicated logistical networks to produce and deliver goods that workers produce. In industry parlance the combination of production centers, shipping routes, insurance contracts and finance capital necessary to sustain the system is called a supply chain. Supply chains are the pulse of the global economy. As such, they occupy a strategic battlefield for organizers intent on wrestling power away from capitalists and into the hands of workers.
A sophisticated global supply chain’s impact is greater than the convenience it offers wealthy consumers or the profits it yields business; it also introduces several degrees of separation between the purchasers of consumer goods and the workers who produce them. In a wonderful feature – the sort of stuff viewers can reliably expect from him – John Oliver explores the many ridiculous ways this separation manifests itself in the clothing industry:
TL;DR – The cheap clothes Americans love to buy and discard frequently are the product of especially exploitative labor conditions in countries like Bangladesh. Every once in a while, something so ghastly happens that it captures the attention of Western buyers. This leads to pressures on corporations selling these clothes (GAP, H&M, Zara, etc.) to introduce less inhumane standards in the factories they source from. To that end, they have failed utterly and completely.
Global supply chains give business a veil to hide behind. Wal-Mart, for example, doesn’t own or even manage the factories in poor countries that manufacture Wal-Mart products. Instead, their warehousing and production needs are contracted out to companies who often subcontract work to other companies, and so on and so forth. What Wal-Mart does do is use their market power to squeeze subcontractor’s margins, and in so doing encourages lower wages and more dangerous workplaces. Consumers get cheap goods, laborers in poor countries get long hours in factories without fire extinguishers, quid pro quo.
What can people not complacent with sweatshop labor subsidizing their well-being do to alter this balance? What might a strategy that makes corporate behemoths more vulnerable look like? Research suggests that power resides in the subcontracting relationship. In her 2010 book Labor Rights and Multinational Production, political scientist Layna Mosely argues that “the ‘mode of entry’ employed by multinational corporations (MNCs) has important – and under-theorized – consequences for workers’ rights and working conditions”. Her argument extends the distinction between “climbs to the top” – where foreign direct investment (FDI) raises productivity and wages – and “races to the bottom” – where trade competition puts downward pressure on labor rights – by suggesting that how MNCs structure their production networks in poor countries impacts how laborers collective rights. Her empirical work shows how countries that receive production from MNCs that is offshored (via FDI, owned by MNC) have higher labor standards than countries integrated in the global economy through outsourcing (subcontracted facilities, not owned by MNC).
The intuitive explanation for Mosely’s findings is that MNCs are more accountable for working conditions when they own the facilities manufacturing their products. Subcontracting, on the other hand, allows MNCs to pass the buck to small factory owners in other countries. Even if GAP tries their hardest to clamp down on abuse in Bengali factories producing GAP jeans, they can only do so much. Or so they say.
The offshoring/outsourcing division has become extremely relevant for labor advocates in this advanced stage of global capitalism. Fast food workers in the United States are facing an analogous situation in the form of franchising. Battles over ownership structure determine the field labor struggles are fought on. It’s high time for the Left to take that battle seriously.