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Trade as a Way Out of Poverty

Poverty, the horrendous poverty so common in most of the world, can only shock the average Westerner.  But we in the West once were that poor.  Development came, but not without substantial pain and agony. That process is playing itself out today.  India, for instance, is growing, but most of its people remain poor.  They are better off when Westerners buy their goods.  Yet good-hearted attempts to mandate better wages and working conditions risk tossing the most impoverished people out of jobs. For instance, the New York Times has discovered that the Indian firms which make manhole covers for New York City don't offer Western-style working conditions.  Surprise!  So Con Edison is talking about rewriting its work standards.  And the Indian firm is worrying about losing the contract.  In short, an attempt to make poor workers better off risks making everyone involved worse off. Reports the Times:
Seemingly impervious to the heat from the metal, the workers at one of West Bengal's many foundries relied on strength and bare hands rather than machinery. Safety precautions were barely in evidence; just a few pairs of eye goggles were seen in use on a recent visit. The foundry, Shakti Industries in Haora, produces manhole covers for Con Edison and New York City's Department of Environmental Protection, as well as for departments in New Orleans and Syracuse. The scene was as spectacular as it was anachronistic: flames, sweat and liquid iron mixing in the smoke like something from the Middle Ages. That's what attracted the interest of a photographer who often works for The New York Times — images that practically radiate heat and illustrate where New York's manhole covers are born. When officials at Con Edison — which buys a quarter of its manhole covers, roughly 2,750 a year, from India — were shown the pictures by the photographer, they said they were surprised. “We were disturbed by the photos,” said Michael S. Clendenin, director of media relations with Con Edison. “We take worker safety very seriously,” he said. Now, the utility said, it is rewriting international contracts to include safety requirements. Contracts will now require overseas manufacturers to “take appropriate actions to provide a safe and healthy workplace,” and to follow local and federal guidelines in India, Mr. Clendenin said. At Shakti, street grates, manhole covers and other castings were scattered across the dusty yard. Inside, men wearing sandals and shorts carried coke and iron ore piled high in baskets on their heads up stairs to the furnace feeding room. On the ground floor, other men, often shoeless and stripped to the waist, waited with giant ladles, ready to catch the molten metal that came pouring out of the furnace. A few women were working, but most of the heavy lifting appeared to be left to the men. The temperature outside the factory yard was more than 100 degrees on a September visit. Several feet from where the metal was being poured, the area felt like an oven, and the workers were slick with sweat. Often, sparks flew from pots of the molten metal. In one instance they ignited a worker's lungi, a skirtlike cloth wrap that is common men's wear in India. He quickly, reflexively, doused the flames by rubbing the burning part of the cloth against the rest of it with his hand, then continued to cart the metal to a nearby mold. Once the metal solidified and cooled, workers removed the manhole cover casting from the mold and then, in the last step in the production process, ground and polished the rough edges. Finally, the men stacked the covers and bolted them together for shipping. “We can't maintain the luxury of Europe and the United States, with all the boots and all that,” said Sunil Modi, director of Shakti Industries. He said, however, that the foundry never had accidents. He was concerned about the attention, afraid that contracts would be pulled and jobs lost.
There are moral responsibilities on those of us who have been given much.  One is to help those in need.  Another is to be concerned about consequences as well as intentions.  We must be very careful that our attempts to short-circuit the difficult development process do not end up killing it instead.