Rethinking the Supply Chains

I am off to give a talk at a labor law conference in Minnesota where I am revisiting some of my discussions of globalization and the need for a Corporate Accountability Act. It’s worth noting that there is a lot of conversations all of a sudden around monitoring and policing supply chains, even outside the current supply chains issues that are impacting the economy.

First, let’s remember the claims by western business, as well as a lot of liberals (if that’s what Yglesias and Lowrey and all the economists who promote these jobs really are), that these jobs are somehow great for the workers of Bangladesh and Sri Lanka and Cambodia is a bunch of hooey. They may in fact need those jobs now, in no small part because globalized capitalist agriculture has thrown them off their land. But that doesn’t mean they like those jobs. In fact, in Vietnam, we are seeing the same kind of resistance to return to work as we are in the United States. Those workers are making apparel for western companies. They hate it. They don’t want to go back.

Thu Trang traveled to Ho Chi Minh City, Vietnam, in 2019, ecstatic to get a job at a factory. She worked eight-hour shifts and was guaranteed overtime pay, and the wages were nearly triple what she had made as a farmer back home.

But during a Covid-19 outbreak this summer, the factory where she worked making Adidas, Converse and New Balance shoes virtually shut down. She and her co-workers were forced to live in a cramped apartment for nearly three months, subsisting on a diet of rice and soy sauce. In October, when restrictions loosened as global supply chain issues surged, Thu Trang decided she would pack up and return to her home province, Tra Vinh.

Her manager promised her higher wages, but she didn’t bother to find out how much.

“Even if the company doubles or triples our wages, I insist on moving back home,” said Thu Trang, who asked to be identified only by her first name because she feared retribution from her company and the government. “Ho Chi Minh City was once a destination where we sought our future, but this is no longer a safe place.”

…

In 2020, Vietnam kept a lid on infections. Officials relied on strict quarantine measures, contact tracing and lockdowns. They assumed that they had time to order vaccines, until infections and deaths surged in the summer with the arrival of the Delta variant.

Officials in Ho Chi Minh City and Binh Duong told factories that workers had to comply with the “three on site” model, which meant that eating, living and working needed to be done within the factory’s premises.

Factory managers scrambled to provide tents and toilets for their workers, who were crammed in warehouse buildings or parking lots. Local media reported that hundreds of workers in several factories became infected. Many businesses felt they could not bear the costs of housing their workers, so they shut down production. Suddenly, thousands of workers found themselves with no income.

Do Quynh Chi, director of the Research Center for Employment Relations, which researches labor trends in Vietnam, said 60 percent of the 300 workers she interviewed in the last week of September told her they wanted to return to their home villages after realizing they lacked a safety net in the city.

At the core of these supply chains issues is that labor is treated like dirt across the globe, including in the United States.

Long before the Ever Given, a 220,000-ton container ship, blocked the Suez Canal in March, transport industries had issued a blunt public warning that a trade logjam was unavoidable if conditions for sailors, drivers and pilots were not improved. To keep trade moving, workers urgently need fast-tracked visas, the return of flights to and from ports and vaccinations. Instead, the opposite happened. Draconian travel bans and limited access to vaccinations have had a devastating impact on transport workers’ well-being and safety. Crews have not been allowed to disembark ships without the right vaccination paperwork, so leaving or joining a ship has become impossible: Hundreds of thousands of them have been trapped on their vessels, with some working months beyond their initial contracts. Thousands of truck drivers at international borders have also been forced to sit for days in freezing temperatures without access to food or medical facilities. Pilots of cargo planes have faced extensive quarantines after completing international flights, meaning long periods away from their families.

This ill treatment may push many workers out of the sector, exacerbating the shortfall in labor that underpins the chaos. In the shipping industry alone, which moves around 80 percent of goods traded globally, there is an expected shortfall of thousands of officers in the next few years, according to a work force report from the International Chamber of Shipping and the Baltic and International Maritime Council. Left to depend on national vaccination programs, many transport workers, especially those from developing economies with less access to vaccines, will continue to suffer untenable work conditions.

Key to my ideas about placing controls on corporate misbehavior, including in their supply chains, are neither radical nor something that we don’t do already. For example, the Senate, by unanimous consent in fact, has recently passed the Uyghur Forced Labor Prevention Act.

The Uyghur Forced Labor Prevention Act would create a “rebuttable presumption” assuming goods manufactured in Xinjiang are made with forced labor and therefore banned under the 1930 Tariff Act, unless otherwise certified by U.S. authorities.

Passed by unanimous consent, the bipartisan measure would shift the burden of proof to importers. The current rule bans goods if there is reasonable evidence of forced labor.

Oh you mean what I’ve been demanding for years? Again, these ideas of mine are actually quite mainstream, except that global conditions of labor plays no role in even progressive domestic or foreign policy.

Moreover, Europe also provides a lot of useful models. From yesterday:

The European Union on Wednesday proposed a measure that would seek to restrict imports to “deforestation-free” goods and materials for countries in the bloc, in an effort to fight consumer trends that drive deforestation around the world.

Importers of commodities including coffee, cocoa, soy, beef, palm oil and wood — as well as products made from those materials, such as furniture and chocolate — would be required to identify the geographic coordinates of the land where the materials were produced. To qualify as “deforestation-free,” the land cannot have been deforested or degraded since Dec. 31, 2020.

The proposal — which would need to be approved by the European Parliament and E.U. member states before coming into force — was hailed as “groundbreaking” action to combat the climate crisis by European Commission officials. “We can’t ask for ambitious climate policies from partners on the one hand and export pollution and support deforestation on the other,” said, Virginijus Sinkevicius, a Lithuanian European commissioner for environment, oceans and fisheries.

Demand in the European Union for commodities such as beef and cocoa are “strong drivers of deforestation,” said Frans Timmermans, vice president of the European Commission. E.U. citizens, he said, had called for measures “to minimize the European contribution to deforestation and to promote sustainable consumption.”

The ban on materials from deforested or degraded land would reduce greenhouse gas emissions and biodiversity loss, and benefit vulnerable communities such as Indigenous populations, the commission said in a statement.

Europe may not be doing enough, but they are a good light year ahead of the U.S. You know what the major difference is between the U.S. and the EU on these issues? At least progressive Europeans are aware other countries exist and see themselves as part of a global world for which they have at least some limited responsibility. In the U.S. there is effectively no progressive foreign policy at all, the progressive trade policy is just nostalgia for the union economy of 1950, and we barely think about the rest of the world. We could also make these demands of our politicians. Of course the contemporary courts aren’t going to approve of this stuff, but does that mean that once Barrett writes the opinion overturning Roe we are going to give up on abortion rights? Of course not. You are never going to make change if you don’t articulate the change that needs to be made. You can think my ideas are good or you can think they are bad. But at least they are ideas and not just a shrug of the shoulders. I think we can all do better in making trade policy that empowers workers making products for this nation wherever they reside a bigger part of our politics.