International Political Will

When you hear “third world labor exploitation,” a few standard images come to mind: sweatshops full of hungry people making Nike tennis shoes 18 hours a day for pennies in Indonesia; young mothers sewing $25 T-shirts for The Gap in return for a few cents in Honduras; children chained to a loom making carpets in India or Pakistan.

But sometimes the exploitation is less multi-national, and more local. Sometimes it’s the developing country’s elite that are exploiting their own people, without the help of international corporations.

Mumbai is a city of poverty. More than half of the 19+ million inhabitants live in the slums. An equal number have no toilets. And while a good portion of the slum-dwellers likely live below the poverty line of less than $1.25, there are actually 1.2 million that lives on less than 50 cents a day.

So when the credit card company outsources their customer service to India, and the $1,200/month call-center jobs leave Michigan for Mumbai at $300/month, it may seem like Capital One or Dell Computers is exploiting Indians willing to work cheap.

But delve deeper. Call-center jobs in India go to semi-skilled English speakers. A motivated student in India can get these jobs often with just a 10th grade education. And $300 per month is a decent salary for someone living in a 30 sq. ft. corrugated metal shack.

Eventually, that call-center employee will have their own children, and their $300 a month salary will allow them to raise children with a slightly better education. They will be able to afford tutors (because the public school system in India is an absolute joke). Since they use English at work, the parents will use it at home with their children, raising more fluent speakers. Their children will find better jobs…and the cycle continues.

So where does the exploitation come in?

Consider the tale of two companies:

Company ABC is a successful English-oriented firm based in Mumbai, founded and owned by an Indian citizen. Their primary clients are affluent Japanese, handled over the Internet. Their revenue stream is received in Japanese yen, which makes for a good exchange rate into rupees. They have been around for about 10 years and are now growing exponentially as they gain a decent market share of Japanese educational institutions. Company ABC has about 200 employees, almost all of which have fluent English and the graduate degrees in science, engineering, and medicine that are necessary to perform their duties.

The average starting salary for a new employee (who has not just a university education, but a graduate degree) is about $300 per month. Again – not a bad salary considering India. But the $300 per month salary is also the same salary as many international call centers – places that don’t require such an extensive education. New employees are primarily fresh out of university, and because Company ABC assumes (as a matter of company policy) that employees still live at home with their parents, such a low salary is acceptable. So essentially, Company ABC is making their employees’ parents subsidize their profits.

Now consider the multi-national corporation:

Kentucky Fried Chicken opens up a store in a new plush mall in Mumbai. They hire primarily young people from the slums – people that have decent, but not great, English. They hire employees that maybe only finished the 10th grade. It’s not glorious work, it’s not clean work, and it’s not a career. But it has stability, the ability to move up into supervisor positions over time, and guaranteed incremental pay raises.

And the salary?

$300 per month.

So who is doing the exploiting?

A man with a university degree in education is living in a 75 sq. ft. shack in the slums and works 6-days a week at the bank. Why? Because the bank pays more than teaching – but it’s still not enough to move his family out of the slums. So his education goes to waste. He will never have the chance to become a teacher and create a better educated generation for the future. His own government has basically told him they value him more for his ability to file paperwork than his skill to educate children.

Another young man with an education, fluent English, and work experience in the United Kingdom is splashing concrete on a wall and laying tile as he waits for the moment when he can leave India again and get a job in something other than manual labor. His international experience means nothing, but an Indian contractor is willing to exploit his labor.

A young woman with a graduate degree quits her job teaching at a small college in Mumbai because it only paid $100 per month. She can earn $300 per month at an Indian-owned company teaching affluent Japanese citizens over the Internet. Essentially, she has been told indirectly by her country that it’s not worth educating her own fellow citizens.

All these situations point to one tragic fact – India does not value education.

The more I see, the more I have come to believe that multi-national corporate employers might actually be the best hope for countries like India. Over the past 30 years, international agreements have established guidelines, rules, and standards for corporations that seek to operate across borders. If KFC or Pizza Hut wants to open a store in India, there are independent organizations observing and monitoring, and they publicize any exploitation to consumers in the countries where the corporation originated.

But if the company is Indian – operating in their own country – then the only body that can regulate them is India itself.

Given the chance, the elite Indians that control the power and wealth in the country will only continue exploiting their fellow citizens. They avoid global standards because they see it as hindering their competitive advantage in the global marketplace. But they must understand the impact global standards can have on overall development.

India needs to move away from the old days of exploiting their own cheap labor and realize a new competitive advantage – education. Showing your citizens that employers value education – by compensating workers fairly – will fuel the drive for people to go to school. More education means better jobs, less disease, slower population growth, higher standards of living, female empowerment, more informed voters, better governance, and stronger communities.

If a university education doesn’t mean a better salary than working at KFC, what motivation is there to go to school?

Tags: India, outsourcing, education, Kentucky Fried Chicken, exploit

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