We hear a lot of disparaging talk from politicians about the “bad” American companies that have outlets or factories abroad. The words “sweat shop” spring to mind, and of course no decent person wants anybody to work in terrible conditions. But an intriguing article by John Calfee, a resident scholar at the American Enterprise Institute, suggests that low-level jobs with U.S. companies are helping women in poor countries change their lives and, more than that, doing a great deal to begin the process of rescuing these countries from poverty.
Calfee reports:
The jobs don’t pay much, but they pay enough to make a real difference for lower-class families who must make their way in one of the most corrupt nations in the world, a nation that has yet to produce the explosive growth now seen in India and China. These women-most of them young and with no more than a high-school education-face difficulties utterly unfamiliar to Western women. Friends, neighbors, customers, and especially their own families are often hostile to the very notion of working outside the home with unrelated men at their side or facing them from the other side of the counter. Death threats are common and, therefore, so is secrecy….
[A] few things need to be said about the role of business, especially American business, in this pivotal advance. To begin with the most obvious, this reminds us of the ability of giant retail franchising enterprises to realize substantial value from the young and modestly educated-probably a far more difficult way to make money than just hiring people with PhDs granted by internationally respected institutions. By no means does all that value go to the employer, for the employee and her family share the gain. In particular, these employees obtain not only money, but experience dealing with the public (many of these women had practically never left home before taking these jobs) plus a sense of the values and habits (punctuality, reliability, and the like) which are essential to achieving a middle-class lifestyle.
Calfee’s piece is especially interesting in an era when business is denigrated by many who hold political power. Companies that save themselves by doing business in places where the tax burden is less lethal are derided as “Benedict Arnold companies.” Never mind that this is good for the ordinary citizens who have stock in these companies. Never mind that these companies are often merely responding to the punitive tax code in this country.
I would love to have somebody find out how many benefits ordinary people in poor countries reap from U.S. companies, as compared to the benefits they derive from U.S. foreign aid, which often lines the pockets of the elite and doesn’t trickle much beyond a clique’s grasp. I’m willing to wager that the invisible hand of the free market is much fairer.
Hooray for American business!