27 September 2018

Don't Buy Local

This summer I finally got around to doing my first Park Run, joining the now millions of people around the world who turn up on Saturday mornings for a free 5km timed run around their local park (I managed a not too shabby 27 minute time, roughly average for my age). 

I also work on global development, so was pretty disappointed to receive an email announcing a new clothing line from the founder of Park Run that will be manufactured exclusively in Europe. Paul Sinton-Hewitt CBE was concerned with the “horrendously exploitative … factories in the Far East employing questionable practices, paying the lowest wages and exposing their workers to dangerous conditions”. 

Paul is right to be concerned about the wellbeing of East Asian factory workers, but moving those jobs to Europe is not the solution. Moving manufacturing jobs from places where jobs are scarce, to Europe where jobs are not scarce, is not a good thing. 

My point is not a new one; Paul Krugman, the nobel-prize winning left-wing economist wrote more than ten years ago in praise of sweatshops. But the point still stands, and is still apparently missed. The factories in which most of our sports gear are made have poor working conditions compared with jobs in rich countries, but they are usually preferable to the actual alternatives facing people unfortunate enough to be stuck in poor countries.

In 1980, before it became the workshop of the world, extreme poverty in China was close to 90 per cent. Today it is less than 1 per cent. That change would not have been possible without the manufacturing industry. It’s hard to think of anything else that has had a bigger positive impact on human wellbeing that the transformation of China’s economy. 

And it’s not just China that has benefited. Now that wages are starting to rise in China, manufacturers are moving on to other lower-income countries, such as neighbouring Vietnam and Cambodia, but also further afield, to Ethiopia and Nigeria. 

Researchers Rachel Heath and Mushfiq Mobarak looked at what happened in Bangladesh when garment factories started opening. As factories rewarded basic literacy and numeracy, girls who lived in villages near to new factories chose to stay in school longer. The effect on education was bigger than a government social programme explicitly designed to increase schooling. In Ethiopia, Chris Blattman and Stefan Dercon found that people use factory jobs as a safety net. Pay and conditions may be poor in the new factory jobs, but they are always there, even when other informal means of getting by fall through. 

So what is a concerned Park Runner to do? Ultimately pay and conditions in poor countries will only improve when workers get better outside options. Thanks to the hard work of poor Chinese in the 1980s and 1990s, China’s economy has grown, wages have risen, and Chinese workers today can afford to ask for more and turn down the worst offers. The best way to encourage that trend is to continue to buy things made in poor countries. Other ways to give poor people more options are to just give them cash directly (you can do literally that at givedirectly.org), to go on holiday to poor countries and spend money on services from poor people, or if you’re a citizen of a rich country to encourage your government to make it easier for people from poor countries to come and work in your country. 

I have nothing but admiration for Paul Sinton-Hewitt’s founding of Park Run, and of his desire to create an inclusive and ethical line of sportswear. I just hope he reconsiders his decision not to support jobs where they are needed most.

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