The Scandal Of Chinese And Cambodian Olympic Uniforms

7/14/2012
Tim Worstall, Contributor
Forbes

Two stories, one from each side of the Atlantic, on the scandal of how Olympic uniforms are being made not by domestic workers but by poor people in poor parts of the world.

In the US it turns out that the uniforms for the team itself have been made in China:

We’ve got bigger fish to fry. And we can fry them on Harry Reid’s bonfire.

Words can’t express the indignation felt by the Senate majority leader over the U.S. Olympic team’s uniforms being manufactured in China. He wants the uniforms put on a pile and burned.

Providing a politician with an opportunity to grandstand is performing a valuable public service I would say.

In the UK it appears that sweatshops in Cambodia are being used to make the Olympic branded gear on sale to the general public:

But at the company’s Shen Zhou factory on the outskirts of Phnom Penh, the Cambodian capital, The Daily Telegraph discovered that poor machinists were working up to 10 hours a day, six days a week, to produce the official Olympics merchandise that thousands of fans will buy in stores throughout Britain.

Living in squalid conditions, workers said they earned a basic salary of $61 (£40) a month for working eight hours a day, six days a week, plus a $5 allowance for health care. They said they could take their wages up to $120 (£78) by increasing their hours to 10 per day.

Adidas insisted on Friday that workers at the factory made an average of $130 a month, and would get a pay rise later this year, along with other garment industry workers.

Anna McMullen of the campaign group Labour Behind the Label, said that was still lower than what they regarded as a living wage for a Cambodian worker with a family. “The minimum wage in Cambodia is horrendously low – $66 a month,” she said. “But the living wage for a worker with two children is $260.”

I agree that it is a scandal: in fact that both are scandals. But not for the reasons that most are pointing at. Let me illustrate by the example of those Cambodian workers. The rag trade (what we Brits call your garment trade) is the vital component of the Cambodian economy as it tries to pull itself out of the destructive monstrosities of the Pol Pot years and subsequent mismanagement:

Garments make up almost 80 per cent of all

Cambodia’s exports, and employ 65 per cent

of its manufacturing workforce.3 The garment

industry accounts for around 12 per cent of

Cambodia’s Gross Domestic Product.

As far as Cambodian industry goes, the rag trade is pretty much it.

I agree that neither you nor I, the lucky people that we are for having been born in our current time and place, would wish to work for the wages on offer. Yet what are the choices available to those in Cambodia?

Factories are required to pay the Cambodian

minimum wage of US$45 a month. Many

workers earn more as their output increases.

The industry average wage was US$61 a

month, and lately has crept up to US$70,

reflecting increased productivity.16 In

comparison, the average salary for a

Cambodian civil servant is US$28 a month.17

More than one-third of all Cambodians – 36

per cent – live below the poverty line.18

In the countryside where most workers come

from, the average monthly income for an entire

household is US$40 a month.19

Official working hours in garment factories are

8 hours a day, 6 days a week. But many

workers do overtime. Working hours average

10 hours a day.20 Forced overtime and

excessively long shifts have been reported as

problems in a number of factories.21

In comparison, women agricultural workers

labour almost 18 hours a day (men work 14

hours) during the rainy season, and 14 hours

a day (10 to 12 hours for men) during the dry

season.22

Low as those rag trade wages are, harsh as the working hours, they’re better than 18 hours a day up to your tuchkis in a paddy field.

We can also see the effect on the wider economy:

The growing gridlock is indicative of rising prosperity. Annual growth of around 9% over the past decade has been driven by services and manufacturing, centered around the capital.

“If we look at the drivers of growth – mainly garment exports – the factories are based around Phnom Penh or in Phnom Penh,” says Neak Samsen, a poverty specialist at the World Bank office in Cambodia. “There’s a lot of development in Phnom Penh City compared to other parts of the country.”

A 9% growth rate means income is doubling every 8 or 9 years.

So, we have an appallingly poor part of the world. We have appallingly poor people in it. We have an industry, cheap schmutter, that is reducing that poverty as fast as it is actually possible to do so. Nowhere has really ever grown faster than 9 or 10% a year. Everything seems to be going as well as it possibly could be. The poor are, as we would all wish them to be, getting richer.

And yet we have politicians and do gooders insisting that we are doing something wrong by doing our part in this process: buying things made by poor people in poor countries.

Eh? This is the very thing that we know works. This is how poverty is alleviated. This is how the world is made a better place. And yet this is the very thing we are told we must not be doing?

Don’t you consider that a scandal?