US apparel makers excited about Ethiopian wages at $21 a month

Ah! Sweet Commerce.

By Richard Mellor

Afscme Local 444, retired

Back in December 2011, Hilary Clinton visited Myanmar in the wake of the military dictatorship’s introduction of reforms.  Ms. Clinton was accompanied on that visit by corporate leaders looking for lucrative investment opportunities and cheap labor. Military dictatorship’s can be a bit too unstable for investors looking for profits sometimes, but with a firm grip on dissent and unions they can be good business partners.

US president Barack Obama has just finished a 5-day visit to East Africa with the same goal in mind.  “Africa is the final frontier in the global rag trade—the last untapped continent with cheap and plentiful labor.”, the Wall Street Journal wrote prior to Obama’s exploratory mission.  What with Chinese workers waging successful struggles for higher wages and the Cambodians following suite, Africans are in the sights of the garment industry investors.

Even the poverty stricken garment workers in Bangladesh who earn at least $67 a month are too expensive for the likes of WalMart and other Western retailers. PVH, the parent company of Calvin Klein and Tommy Hilfiger and VF, parent company of brands that include Wrangler, Lee and Timberland, are looking to descend on Africa like vultures on a dying animal.  JC Penney and Levi Strauss have been moving production to Africa as well. Ethiopia is a particularly attractive location as economic growth has been pleasing Wall Street and the country has no minimum wage.  Ethiopian garment workers were earning $21 a month as of last year according to the Ethiopian government. Despite lacking in infrastructure and a relatively untrained (for sewing garments) labor force, the apparel companies are “still drawn to the cheap labor and inexpensive power…” the WSJ writes.

The urgency for Obama as the representative of US capitalism, is catching up with the Chinese who have been investing in Africa as well as Latin America, a region that US imperialism considers it’s own back yard.  Obama “celebrated the ingenuity of African business leaders”, the “African” people he is most interested in, and his last day was spent speaking to the African Union at its headquarters in Addis Ababa, the first American President to do so. One can only imagine the reaction of the arrogant US bourgeois at their elected representative speaking to a prominent African organization in their headquarters built for them by the Chinese. 

Naturally, like Hilary Clinton, John Kerry and all the spokespersons of the US 1% do in their taxpayer funded travels around the globe on behalf of US corporations, Obama lectured the Africans on the need, “to end widespread government corruption and advance democracy and human rights…” the WSJ reports.  Corrupt as the various African governments may be, (crony capitalism is how the US media describes corruption in former colonial states) they would be hard pressed to outdo Washington in the corruption category unless one thinks the practice we Americans call lobbying is not bribery. The world’s working classes must have a good laugh at that one, and even more so at Obama’s jibe at the Chinese presence on the continent.

 “America’s approach to development—the central focus of our engagement with Africa—is focused on helping you build your own capacity to realize that vision,” Mr. Obama told his hosts as they no doubt held back laughter. It’s OK though, the representatives of African capitalism he was talking to have no qualms taking a few bucks thrown their way.  But Obama wasn’t done and had a go at the Chinese,  “But economic relationships can’t simply be about building other countries’ infrastructure with foreign labor or extracting Africa’s natural resources…” he tells the African elite, “….real economic partnerships have to be a good deal for Africa—they have to create jobs and capacity for Africans.”

We are expected to believe that the motive of US capitalism is purely egalitarian and honorable, helping the African people stand on their own two feet, no strings attached-----unlike those Chinese. Wow, a quick left hook to the Chinese in the same breath, “real economic partnerships have to be a good deal for Africa.”? The British spread good cheer throughout the world too for a couple of centuries, traversing the globe helping nations and their people’s stand on their own two feet. I’m not sure Africans would consider the British to have been such egalitarians or that US capitalism is either.

Workers need to take the statements of the journals of capitalism like the Wall Street Journal more seriously. All the chatter from the representatives of capital about workers’ rights and the need for multilateral agreements to include protections for workers is phony, as phony as Obama’s comments to the African elite on his visit.  It is the phony diplomacy of thieves. Back home these same forces are waging a vicious war against US workers and our wages, rights and benefits that have taken a century or more to win. With capitalist Globalization and with it the collapse of Stalinism and opening up of China, US capital now has access to huge pools of cheap labor with which US workers are expected to compete.  The only result of this competition between workers in different nations as well as within one country is for us all to go down together.  The majority of industrial workers today are not in Europe or the US but in Asia, and more than 50% of them are women. The road to our emancipation is international solidarity and unity in action against global capitalism.

The owners of capital care not where the labor power they purchase comes from. All that matters to them is that they can extract surplus value from it. It is the source of their profits and the cheaper the better. They traverse the globe in the search of the most lucrative climes, from Mexico, to China, to Cambodia, Vietnam and now Africa is a place their capital might call home. Capital truly has no borders and cares not which nationality of workers it exploits. The sub heading to one of the articles linked to here make it clear: “From H&M to Calvin Klein, brands look to Ethiopian factories where pay is as low as $21 a month.”

As US workers we are asked to help our manufacturers compete against their foreign rivals for global market share. We are told that if we want the jobs to remain in the US we have to cost less, our labor power is too expensive, our rights and benefits, and general working conditions, with more and more exceptions, are a hindrance to profits so they have to go, we have to be able to work faster for less money.  As I write, the IMF is pressuring the Europeans to do the same and institute more labor reforms, worker protections must go and it must become easier to fire workers.  As is so often the case, the productivity of US workers is held up as the benchmark that must be met but it is rarely mentioned that US workers work longer hours than workers in other advanced capitalist economies and with fewer social benefits.

“Africa will need to generate millions more jobs than it’s doing right now. And time is of the essence. The choices made today will shape the trajectory of Africa, and therefore the world, for decades to come.”, Obama told his hosts who he expects will be faithful servants of the US 1% on the continent, supplying plentiful cheap labor and safe conditions for profit making.  This is a Utopian dream and not possible under capitalism

The African masses have heard all this before and as far as the Chinese go, Obama might be a little late. Being bogged down in predatory corporate wars in the Middle East and beyond, US imperialism is a little stretched and the US taxpayer somewhat tapped out. The US taxpayer also funds a huge military industrial complex which is good for investors in that industry but a drain on the rest of us. Obama hints that private capital may step to the plate for Africa but that could have happened in the past and hasn’t despite starvation, poverty and poor health due primarily to the lack of infrastructure and public health projects.  Private capital, despite its representatives being successful in driving down the standard of living in the US, is unwilling even to rebuild the US’s crumbling infrastructure, what Business Week once described as the “Third Deficit”.

It doesn’t take rocket science as they say, to figure out that capitalists don’t shift production to these countries in order to increase the standard of living of workers there. The trade union leaders in the US while paying some lip service to international solidarity between workers willingly capitulate to the interests of the 1% when it comes to it as they have the same worldview seeing no alternative to the market. The Team Concept, the idea that workers and bosses have the same economic interests dominates their thinking not only domestically as workers in different workplaces are forced in to competition with each other in order to help “their” immediate employer gain market share over their rivals, but internationally as well. In either case, accepting this philosophy is a disaster. 

The “American” capitalists salivating at the thought of Ethiopian labor power at $21 a month would be quite willing to keep their capital and the jobs in the US if we are prepared to outbid the Ethiopians when it comes to wages and working conditions; how patriotic of them. Either way, we are heading down the same path anyway as our employment choices, (if we are working at all) boil down to minimum wage opportunities or working three jobs to make ends meet.

Working class solidarity at home and internationally is the only alternative to this mad rush to the bottom.