Italy's idyllic region of Tuscany is known as a top-tier tourist destination. Less well known is that it is also one of Europe's frontiers of human trafficking and a case-study in the effects of globalization. The garment and textile factories of Prato figured prominently in Italy's "miracle" economic performance of the 1950s and 1960s, with more than 4,500 small shops producing many of the world's most sought-after brands. Garment production is buoyant there again, but "economia sommersa" (submerged economy) sweatshops account for more than a third of the goods produced, and many of the Chinese workers are working long hours for little or no pay, due to huge debts to trafficking gangs. Now that the new anti-immigration mayor is closing illegal operators, hundreds of workers without legal working papers are in limbo as the Chinese government has refused the Italian government's attempts at repatriation.
Immigrant-bashing media in Italy decry the rise of sweatshops, but NYU's Andrew Ross points out that they had their place in Prato decades ago, when there was a high-wage "core" fed by peripheral sweatshops. Hence, the current situation is not a "Chinese import." This mobile workforce has been a hallmark of globalization, spawning a hugely contentious debate and ugly--if understandable--resentment.
Aside from the worker migration topic, there are other key globalization questions as well. Has globalization turned good companies bad? Has the outsource model forced the buyers to accept the often brutal practices of supplier-factory managers in some of the world's most corrupt and lawless environments? Is the current wage allocation truly fair and efficient? Several myths occlude helpful discussion of these questions and the solutions to their larger underlying issues.
There is one myth that has served the most vulnerable industries (electronics, toys, garments, and footwear) well over the last decade: a global brand will meticulously monitor its supply chain because conscientious consumers, informed by the latest technologies, will punish the company at the retail level for any transgression. Rather, according to Jeffrey Swartz, the CEO of Timberland, consumers do not think too much about workers' rights in the supplier factories. "Don't do anything horrible or despicable" and the company will be safe, he opined in late-2009. His remarks are supported by a striking example: the complete lack of media attention when the toy-maker Mattel scrapped all factory monitoring in 2010.
Another misperception--shared by "free trade" critics and proponents alike--is the race-to-the-bottom discourse, which posits that any improvement in wages or conditions will send factory managers off in search of more vulnerable workers. In 2000, shortly after the anti-WTO protests in Seattle, over 200 economists sent an open letter to college presidents in the United States that chastised them for too easily acceding to the students' demand to clean sweatshop-stained apparel out of university bookstores. The message was simple: they will hurt the very workers that they are trying to help because of this outsourcing imperative to seek lower standards.
Forced Labor Worldwide Considering Categories of Trafficking
Economic Exploitation 7,810,000 Cases
Commercial Sexual Exploitation 1,390,000 Cases
State-Imposed 2,490,000 Cases
Mixed 610,000 Cases
International Labour Organization; 2005
Note: Table made from pie chart
In practice, there appears to be much room for wage improvement. Indonesia's "real" wage nearly tripled in the early 1990s, while foreign investment continued to flow. China and Vietnam have pushed up minimum wages several times in the last five years while maintaining double-digit growth rates. The incontrovertible and simplest proof that there is ample room for wage growth may be seen in the cost breakdown for a typical university-logo "hoodie" the labor cost of the US$38 garment is less than 20 cents, while the university's licensing fee is over two dollars. …