july 25 2004
Writing about web page http://www.sweatshopwatch.org/swatch/campaigns/bendavis.html
This article, although a little old, is typical of the practices associated with clothing labels… forcing workers to accept lower levels of benefits and lower wages with threats to move production abroad. Using the excuse of job insecurity to reduce costs is just sick. The human cost of this on the workers is of course immeasurable and unrecorded. While there is an economic benefit to outsourcing jobs, in that costs can be cut making a firm more competitive. I don't think that brands can argue they need to cut costs to remain competitive; they're not cutting prices and with the mark up they place on their goods it simply increases profit margins! And anyway, whilst there is an initial benefit of outsourcing, in essence a reduction in the level of fixed costs, in the long run the benefits of the lower sunk costs become negligible and unless there has been a significant shift in the variable cost curve the problems of information transfer and administration can outweigh the benefits of moving production.
in a minor other point…
link Is yet another article about Zimbabwe's shattered economy and its effects. The explusion of non- Zimbabwean industry and confiscation of farms has caused the economy to crash horrifically.