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The Fissured Workplace by David Weil
accounting loophole / creative accounting, affirmative action, Affordable Care Act / Obamacare, banking crisis, barriers to entry, business process, call centre, Carmen Reinhart, Cass Sunstein, Clayton Christensen, clean water, collective bargaining, commoditize, corporate governance, corporate raider, Corrections Corporation of America, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, declining real wages, employer provided health coverage, Frank Levy and Richard Murnane: The New Division of Labor, George Akerlof, global supply chain, global value chain, hiring and firing, income inequality, information asymmetry, intermodal, inventory management, Jane Jacobs, Kenneth Rogoff, law of one price, loss aversion, low skilled workers, minimum wage unemployment, moral hazard, Network effects, new economy, occupational segregation, Paul Samuelson, performance metric, pre–internet, price discrimination, principal–agent problem, Rana Plaza, Richard Florida, Richard Thaler, Ronald Coase, shareholder value, Silicon Valley, statistical model, Steve Jobs, supply-chain management, The Death and Life of Great American Cities, The Nature of the Firm, transaction costs, ultimatum game, union organizing, women in the workforce, Y2K, yield management
Conditions that resulted in the deaths had parallels with the infamous Triangle Shirtwaist fire of 1911 in New York City: locked fire exits, supervisors demanding that workers return to their stations in the face of alarms, and people jumping to their deaths from a burning building. Notably, the facility provided products for a number of major U.S. brands and retailers and had been covered by a workplace monitoring arrangement with Walmart, one of its major customers.48 Less than six months later, in April 2013, a multistory building in Savar, Bangladesh, collapsed, killing 1,127 people who worked in the numerous apparel manufacturing companies located in it. The Rana Plaza complex collapse was the deadliest accident in the history of the garment industry. Apparel contractors in the building produced goods destined for such global brands as Walmart, Benetton, the Children’s Place, and British retailers Bonmarché and Primark.49 Global supply chains give rise to benefits to the companies that draw upon them, the consumers who purchase goods produced through them, and the workers who are employed as part of them.
But given their deep integration with the supply base and the essential strategic need to carefully prescribe, certify, and conduct ongoing monitoring of adherence to technical, quality, and delivery standards, it seems arbitrary to absolve those lead companies from responsibility for, at the very least, seeing that those suppliers adhere to the labor standards of their home country. The Apple/Foxconn story illustrates that lead firms can take more responsibility. The Tazreen and Rana Plaza tragedies exemplify the failure to do so. Any effort to address wage levels, health and safety, labor standards compliance, or other aspects of work must recognize that the modern workplace, as redrawn through the organizational forms discussed in Part II, looks less and less like the one enshrined in most public policies. Improving the workplace requires changing the way laws assign responsibility.
The policy changes at Foxconn, in particular, including substantial pay increases and reduction in work hour policies as well as efforts to improve health and safety outcomes, are notable, as are the resources and attention Apple and HP have devoted to developing better capacities to monitor and improve labor and environmental practices in their supply bases.37 At the same time, the death of more than five hundred Bangladeshi workers in factory fires between 2006 and 2012 and the collapse of the Rana Plaza factory complex leading to more than 1,100 fatalities in 2013, all in facilities primarily serving apparel export markets points to the continuing huge challenges faced in this arena. This point is underscored by the fact that most of those who died worked in factories that were technically covered by codes of conduct or some type of international monitoring arrangement.38 A complete discussion of the impact of codes of conduct, transparency, and voluntary monitoring occurring across the boundaries of national workplace policies raises issues beyond the scope of this book and requires separate assessment.39 But several general points about recent efforts to address this particular driver of fissured workplaces can be made here.
3D printing, accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, additive manufacturing, Airbnb, algorithmic trading, Alvin Roth, Asian financial crisis, asset allocation, bank run, Basel III, bonus culture, Bretton Woods, British Empire, call centre, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, carried interest, centralized clearinghouse, clean water, collateralized debt obligation, commoditize, computerized trading, corporate governance, corporate raider, corporate social responsibility, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, crowdsourcing, David Graeber, deskilling, Detroit bankruptcy, diversification, Double Irish / Dutch Sandwich, Emanuel Derman, Eugene Fama: efficient market hypothesis, financial deregulation, financial intermediation, Frederick Winslow Taylor, George Akerlof, gig economy, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, High speed trading, Home mortgage interest deduction, housing crisis, Howard Rheingold, Hyman Minsky, income inequality, index fund, information asymmetry, interest rate derivative, interest rate swap, Internet of things, invisible hand, John Markoff, joint-stock company, joint-stock limited liability company, Kenneth Rogoff, knowledge economy, labor-force participation, labour mobility, London Whale, Long Term Capital Management, manufacturing employment, market design, Martin Wolf, money market fund, moral hazard, mortgage debt, mortgage tax deduction, new economy, non-tariff barriers, offshore financial centre, oil shock, passive investing, Paul Samuelson, pensions crisis, Ponzi scheme, principal–agent problem, quantitative easing, quantitative trading / quantitative ﬁnance, race to the bottom, Ralph Nader, Rana Plaza, RAND corporation, random walk, rent control, Robert Shiller, Robert Shiller, Ronald Reagan, Satyajit Das, Second Machine Age, shareholder value, sharing economy, Silicon Valley, Silicon Valley startup, Snapchat, sovereign wealth fund, Steve Jobs, technology bubble, The Chicago School, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tim Cook: Apple, Tobin tax, too big to fail, trickle-down economics, Tyler Cowen: Great Stagnation, Vanguard fund, zero-sum game
The spate of disasters at BP is one example, but a more recent and even more devastating event in terms of lives lost was the 2013 disaster at the Rana Plaza garment-making complex in Bangladesh. Of the 3,500 workers who labored there to churn out cheap clothing for brands like Walmart, more than 1,100 died when a poorly constructed factory collapsed on top of them. As it turned out, the cause wasn’t just a lack of adequate safety standards in Bangladesh (though that was part of the story). The complexity that outsourcing introduces into the supply chain was also at play. In the aftermath of the collapse, Walmart claimed that it didn’t even know Rana Plaza was used to make girls’ jeans it was planning to sell. (After documents surfaced showing that its Canadian supplier had indeed ordered pants from Rana Plaza, that firm blamed a “rogue employee” for filing the order.)30 The revelations were all the more unsettling given that just eight months prior, Walmart-bound apparel had turned up in another disaster-stricken Bangladeshi factory, after a fire there had killed 120 people.
But the financialization of the American economy is the third major, unacknowledged factor in slower growth, and it engages with the other two in myriad destructive ways. Finance loves outsourcing, for example, since pushing labor to emerging markets reduces costs. But financiers rarely think about the risks that offshoring adds to supply chains—risks tragically evidenced in events like the 2013 collapse of the Rana Plaza textile manufacturing center in Bangladesh, which killed more than a thousand garment workers who spent their days stitching T-shirts and jeans for companies like Walmart, Children’s Place, and JCPenney in buildings that weren’t up to code. Finance also loves the cost savings inherent in technology. Yet high-tech financial applications like flash trading and computer-generated algorithms used in complex securities have resulted in repeated market crashes, wiping out trillions of dollars of wealth.
The Age of Stagnation by Satyajit Das
9 dash line, accounting loophole / creative accounting, additive manufacturing, Airbnb, Albert Einstein, Alfred Russel Wallace, Anton Chekhov, Asian financial crisis, banking crisis, Berlin Wall, bitcoin, Bretton Woods, BRICs, British Empire, business process, business process outsourcing, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Clayton Christensen, cloud computing, collaborative economy, colonial exploitation, computer age, creative destruction, cryptocurrency, currency manipulation / currency intervention, David Ricardo: comparative advantage, declining real wages, Deng Xiaoping, deskilling, disintermediation, Downton Abbey, Emanuel Derman, energy security, energy transition, eurozone crisis, financial innovation, financial repression, forward guidance, Francis Fukuyama: the end of history, full employment, gig economy, Gini coefficient, global reserve currency, global supply chain, Goldman Sachs: Vampire Squid, happiness index / gross national happiness, Honoré de Balzac, hydraulic fracturing, Hyman Minsky, illegal immigration, income inequality, income per capita, indoor plumbing, informal economy, Innovator's Dilemma, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, John Maynard Keynes: technological unemployment, Kenneth Rogoff, knowledge economy, knowledge worker, labour market flexibility, labour mobility, light touch regulation, liquidity trap, Long Term Capital Management, low skilled workers, Lyft, Mahatma Gandhi, margin call, market design, Marshall McLuhan, Martin Wolf, Mikhail Gorbachev, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, oil shale / tar sands, oil shock, old age dependency ratio, open economy, passive income, peak oil, peer-to-peer lending, pension reform, Plutocrats, plutocrats, Ponzi scheme, Potemkin village, precariat, price stability, profit maximization, pushing on a string, quantitative easing, race to the bottom, Ralph Nader, Rana Plaza, rent control, rent-seeking, reserve currency, ride hailing / ride sharing, rising living standards, risk/return, Robert Gordon, Ronald Reagan, Satyajit Das, savings glut, secular stagnation, seigniorage, sharing economy, Silicon Valley, Simon Kuznets, Slavoj Žižek, South China Sea, sovereign wealth fund, TaskRabbit, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the market place, the payments system, The Spirit Level, Thorstein Veblen, Tim Cook: Apple, too big to fail, total factor productivity, trade route, transaction costs, unpaid internship, Unsafe at Any Speed, Upton Sinclair, Washington Consensus, We are the 99%, WikiLeaks, Y2K, Yom Kippur War, zero-coupon bond, zero-sum game
Today the US is around 20–25 times wealthier than the average poor nation. The reasons lie in the relationship between developed and emerging economies. In April 2013, Rana Plaza, an eight-story complex of clothing factories near Dhaka in Bangladesh, collapsed, killing more than 1,100 people. It followed an earlier fire at Tazreen Fashions, another Dhaka factory, which killed more than one hundred. In 2010, a number of workers at a Foxconn electronics factory in China, a supplier to Apple, committed suicide. These incidents are only a miniscule part of the human cost of low-cost manufacturing in emerging markets. The proximate cause of the Rana Plaza collapse was clear. The original 2006 approval was for a five-story building, which was correctly designed and constructed. Subsequently, three more floors were added, with permission based on allegedly false documents.
Prices have decreased by around 10 percent over the last five years. Return on investment in the garment trade has decreased from 50 to 20 percent, which is close to the cost of debt in Bangladesh. In turn, this drives further cost-reduction measures. The problems are compounded by weak government, corruption, rent-seeking, and poor administration. Bangladeshi building regulations are not enforced. Trade unions are aggressively suppressed. The owner of Rana Plaza was linked with one of Bangladesh's major political parties and allegedly used his influence to obtain approvals from the authorities, even though the building extensions did not comply with standards. The same pattern, repeated across countries and industries, relies on what Palestine-born writer Edward Said in 1978 termed Orientalism. This refers to the patronizing attitude of Westerners towards Asian, Middle Eastern, and African societies, which are seen as static and underdeveloped, and which a superior West can shape in accordance with its own requirements.
The Health Gap: The Challenge of an Unequal World by Michael Marmot
active measures, active transport: walking or cycling, Affordable Care Act / Obamacare, Atul Gawande, Bonfire of the Vanities, Broken windows theory, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Celtic Tiger, centre right, clean water, congestion charging, correlation does not imply causation, Doha Development Round, epigenetics, financial independence, future of work, Gini coefficient, Growth in a Time of Debt, illegal immigration, income inequality, Indoor air pollution, Kenneth Rogoff, Kibera, labour market flexibility, lump of labour, Mahatma Gandhi, meta analysis, meta-analysis, microcredit, New Urbanism, obamacare, paradox of thrift, race to the bottom, Rana Plaza, RAND corporation, road to serfdom, Simon Kuznets, Socratic dialogue, structural adjustment programs, the built environment, The Spirit Level, trickle-down economics, urban planning, Washington Consensus, Winter of Discontent, working poor
She looks around the table at the Americans and Europeans wearing clothes – smart casual, remember – from Benetton, Primark, C&A, Mango and others and she says: I made those garments. Well, perhaps not literally those very garments, but ones very much like those were made in the factories where my friends and I work. Cue guilt feelings on the part of the Americans and Europeans. It is difficult not to feel that our liking for cheap clothes is somehow linked to the collapse, in April 2013, of the garment factory at the Rana Plaza complex that killed 1,100 people and injured 2,500 more. Cheap clothes in London and New York mean rotten factory conditions and low pay in Dhaka, in Bangladesh. Like it or not, we are involved. The simple version of this is that we, in high-income countries, export low pay and sweatshop working conditions to Bangladesh and Bangladesh exports affordable clothing to us – globalisation at work.
Hyder reports that 90 per cent of her interviewees thought that working was better than being a housewife, and could see the opportunities it brings. One garment worker, a woman in her forties from a rural background, saw her daughter go to college. Three generations: rural poor, urban factory worker, college graduate. That is not to say that any of us who has bought a garment made in Bangladesh should be relaxed about the working conditions in which it was produced. The Rana Plaza incident brought much-needed attention to the question of working conditions in Bangladesh’s garment industry. There are power asymmetries at work here. If Bangladesh starts to get more organised about pay and working conditions, multinational corporations can simply shift their business elsewhere, to the detriment of Bangladesh’s economy and of the women who gladly see the work as empowering them.
Available from: http://www.sulabhinternational.org/admin/config/media/file-system/Summary%20of%20the%20Case%20Study-Sulabh%20International-A%20Movement%20to%20Liberate%20Scavengers%20by%20Implementing%20a%20Low-Cost%2C%20Safe%20Sanitation%20System-by%20UNDP.pdf. 3Franco G. Ramazzini and workers’ health. Lancet. 1999; 354(9181): 858–61. 4Ibid. 5Eurofound. Fifth European Working Conditions Survey. Luxembourg: Publications Office of the European Union, 2012. 6Ibid. 7Butler S. Bangladesh garment workers still vulnerable a year after Rana Plaza. The Guardian. 24 April 2014. 8International Labour Organisation. ILO Introductory Report: Global Trends and Challenges on Occupational Safety and Health. 2011. 9Marmot MG, Rose G, Shipley M, Hamilton PJS. Employment grade and coronary heart disease in British civil servants. Journal of Epidemiology and Community Health. 1978; 32: 244–9. 10Marmot MG, Davey Smith G, Stansfeld SA, Patel C, North F, Head J, et al.
Connectography: Mapping the Future of Global Civilization by Parag Khanna
1919 Motor Transport Corps convoy, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, 9 dash line, additive manufacturing, Admiral Zheng, affirmative action, agricultural Revolution, Airbnb, Albert Einstein, amateurs talk tactics, professionals talk logistics, Amazon Mechanical Turk, Asian financial crisis, asset allocation, autonomous vehicles, banking crisis, Basel III, Berlin Wall, bitcoin, Black Swan, blockchain, borderless world, Boycotts of Israel, Branko Milanovic, BRICs, British Empire, business intelligence, call centre, capital controls, charter city, clean water, cloud computing, collateralized debt obligation, commoditize, complexity theory, continuation of politics by other means, corporate governance, corporate social responsibility, credit crunch, crony capitalism, crowdsourcing, cryptocurrency, cuban missile crisis, data is the new oil, David Ricardo: comparative advantage, deglobalization, deindustrialization, dematerialisation, Deng Xiaoping, Detroit bankruptcy, digital map, diversification, Doha Development Round, edge city, Edward Snowden, Elon Musk, energy security, ethereum blockchain, European colonialism, eurozone crisis, failed state, Fall of the Berlin Wall, family office, Ferguson, Missouri, financial innovation, financial repression, fixed income, forward guidance, global supply chain, global value chain, global village, Google Earth, Hernando de Soto, high net worth, Hyperloop, ice-free Arctic, if you build it, they will come, illegal immigration, income inequality, income per capita, industrial cluster, industrial robot, informal economy, Infrastructure as a Service, interest rate swap, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Isaac Newton, Jane Jacobs, Jaron Lanier, John von Neumann, Julian Assange, Just-in-time delivery, Kevin Kelly, Khyber Pass, Kibera, Kickstarter, labour market flexibility, labour mobility, LNG terminal, low cost carrier, manufacturing employment, mass affluent, mass immigration, megacity, Mercator projection, Metcalfe’s law, microcredit, mittelstand, Monroe Doctrine, mutually assured destruction, New Economic Geography, new economy, New Urbanism, off grid, offshore financial centre, oil rush, oil shale / tar sands, oil shock, openstreetmap, out of africa, Panamax, Parag Khanna, Peace of Westphalia, peak oil, Pearl River Delta, Peter Thiel, Philip Mirowski, Plutocrats, plutocrats, post-oil, post-Panamax, private military company, purchasing power parity, QWERTY keyboard, race to the bottom, Rana Plaza, rent-seeking, reserve currency, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Scramble for Africa, Second Machine Age, sharing economy, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, six sigma, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, South China Sea, South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, Stuxnet, supply-chain management, sustainable-tourism, TaskRabbit, telepresence, the built environment, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, Tim Cook: Apple, trade route, transaction costs, UNCLOS, uranium enrichment, urban planning, urban sprawl, WikiLeaks, young professional, zero day
For months prior, Chinese businessmen had been buying up as much Aptamil as they could from wholesale distributors and selling each carton for double the price on Taobao (the Chinese eBay) to mainland mothers concerned about the poor quality of Chinese baby formula (from which at least a dozen Chinese babies had died of poisoning). British pharmacies and grocery stores suddenly had to ration the popular baby formula. Maps 1, 24 and 25, corresponding to this chapter, appear in the map insert. On April 24, 2013, the upper floors of the Rana Plaza garment factory and apartment block in the Savar district of Dhaka, Bangladesh, collapsed and pulled down the whole building. When the search for survivors was called off one month later, 1,127 people were declared dead, making it the deadliest structural failure in history. While shoddy construction, corrupt management, poor regulation, and chaotic response are typical of the Bangladeshi manufacturing sector, the unprecedented scale of the tragedy and the factory’s customers—Primark, H&M, and Zara, among others—brought weeks of intense media scrutiny.
Even when e-commerce cuts out the traditional retailer or middleman, the sheer complexity of production and distribution of many high-tech products has required a near doubling of the number of transactions needed to create a finished product in the first place. Thus even as our concerns about supply chains increase, our dependence on them grows. It takes great care to trace and manage supply chains. The Rana Plaza garment factory in Dhaka was the epicenter of six layers of suppliers—clearly more than anyone realized or was actively managing. To ensure the thousands of uniforms they purchase every year are made sustainably, administrators and student delegations from United World Colleges (K–12) in Singapore travel to factories in interior Malaysia to monitor facilities’ compliance with World Responsible Accredited Production codes of conduct.
The Bangladesh garment factory and the jobs it creates might not have existed were it not for Western retailers, and its collapse would barely have been noticed by Western consumers were it not for their connection to those brands. Bangladesh’s new building code is being designed not by lax local authorities but by a consortium including seventy European companies whose reputations depend on avoiding a repeat of the Rana Plaza disaster. Similarly, a franchise business can be more accountable due to strict rules set forth by a powerful parent company. McDonald’s has more capacity to inspect itself, and more incentive to protect its brand, than any government can devote to monitoring it. Similarly, the West African societies where children work in cocoa fields don’t raise wages or build schools the way Nestlé can.*1 — SUPPLY CHAINS WERE ONCE thought of as spurring a race to the bottom; now it is clear they are how countries race to the top.
This Changes Everything: Capitalism vs. The Climate by Naomi Klein
1960s counterculture, activist fund / activist shareholder / activist investor, battle of ideas, Berlin Wall, big-box store, bilateral investment treaty, British Empire, business climate, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, clean water, Climategate, cognitive dissonance, colonial rule, Community Supported Agriculture, complexity theory, crony capitalism, decarbonisation, deindustrialization, dematerialisation, Donald Trump, Downton Abbey, energy security, energy transition, equal pay for equal work, Exxon Valdez, failed state, Fall of the Berlin Wall, feminist movement, financial deregulation, food miles, Food sovereignty, global supply chain, hydraulic fracturing, ice-free Arctic, immigration reform, income per capita, Intergovernmental Panel on Climate Change (IPCC), Internet Archive, invention of the steam engine, invisible hand, Isaac Newton, James Watt: steam engine, light touch regulation, market fundamentalism, moral hazard, Naomi Klein, new economy, Nixon shock, Occupy movement, offshore financial centre, oil shale / tar sands, open borders, patent troll, Pearl River Delta, planetary scale, post-oil, profit motive, quantitative easing, race to the bottom, Ralph Waldo Emerson, Rana Plaza, Ronald Reagan, smart grid, special economic zone, Stephen Hawking, Stewart Brand, structural adjustment programs, Ted Kaczynski, the scientific method, The Wealth of Nations by Adam Smith, trade route, transatlantic slave trade, transatlantic slave trade, trickle-down economics, Upton Sinclair, uranium enrichment, urban planning, urban sprawl, wages for housework, walkable city, Washington Consensus, Whole Earth Catalog, WikiLeaks
Personal interview with Margrete Strand Rangnes, March 18, 2013. 39. Malm, “China as Chimney of the World,” 147, 162. 40. Elisabeth Rosenthal, “Europe Turns Back to Coal, Raising Climate Fears,” New York Times, April 23, 2008; Personal email communication with IEA Clean Coal Centre, March 19, 2014. 41. Jonathan Watts, “Foxconn offers pay rises and suicide nets as fears grow over wave of deaths,” Guardian, May 28, 2010; Shahnaz Parveen, “Rana Plaza factory collapse survivors struggle one year on,” BBC News, April 23, 2014. 42. Mark Dowie, Losing Ground: American Environmentalism at the Close of the Twentieth Century (Cambridge, MA: MIT Press, 1996), 185-86; Keith Schneider, “Environment Groups Are Split on Support for Free-Trade Pact,” New York Times, September 16, 1993. 43. Dowie, Losing Ground, 186–87; Gilbert A. Lewthwaite, “Gephardt Declares Against NAFTA; Democrat Cites Threat to U.S.