Economic Woman

Econometrics, gender, equity and more.

Archive for March 2010

Anti-sweatshop campaigns… work?

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A new paper in the American Economic Review (that version is gated, but an ungated version is available here) from Ann Harrison and Jason Scorse reports that anti-sweatshop campaigns against manufacturers operating in Indonesia, notably Nike, have lead to large real wage increases for workers at targeted firms, and no significant increase in unemployment.

I have to say, this surprises me, but two of the explanations offered are compelling. First, it may be that wages were below equilibrium to begin with:

Wages in Indonesian TFA [textiles, footwear, and apparel] factories were very low prior to the onset of the anti-sweatshop campaigns; vendors for Nike were able to implement significant wage increases before even approaching the average wages across the Indonesian manufacturing sector.

Second, the companies targeted have brand power which gives them unusually high margins. For the non-economists in the audience – by some theories, being a powerful brand is a little bit like being a monopoly, because you’ve distinguished your products to the point where they’re not competing with generic alternatives.

Another key consideration is that many of the goods produced in Indonesia’s TFA sectors ultimately end up in expensive retail markets in the U.S. and the EU, where profit margins are relatively large, brand identity is paramount, and the firms clearly have the financial resources to improve labor conditions in their factories. In industries where more firms compete for market share, profit margins are smaller, and there is no brand recognition, anti-sweatshop campaigns may not be as effective.

So what was the mechanism? Apparently, activism increased compliance with minimum wage laws at the targeted companies. While increases in the minimum wage decreased employment overall – this is no surprise – the increased compliance with the minimum wage at a limited number of companies didn’t seem to reduce employment.

This part is just my own conjecture, but I’d assume that companies wouldn’t respond to these campaigns with wage increases unless they could afford the wage increases. That means there’s almost a built-in safety valve to avoid unemployment.

Not all the news was rosy, though:

While anti-sweatshop activism did not have additional adverse effects on employment within the TFA sector, it did lead to falling profits, reduced productivity growth, and plant closures for smaller exporters.

So taken together, this isn’t exactly bad news, but I’m not sure it’s widely applicable.

(Hat tip to Chris Blattman, as usual.)

Written by Allison

24 March 2010 at 12:11 pm

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Missing the point about race and feminism

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I may have spoken too soon. Jezebel has pointed out out that all of the women in the photo accompanying the Newsweek story are white. And in response, the women of Equality Myth have made two pretty unconvincing points. Emphasis is mine throughout.

All of the women in this photo work or used to work at Newsweek. And yes, all of them are white, but you should really read the piece for some context. The photo isn’t meant to illustrate the face of feminism, it’s actually just a link to the package … True, there probably aren’t enough people of color working here—or in the media in general—just as there aren’t enough women. And for the record, the few women of color who worked at Newsweek during the 1970 suit declined to sign the complaint against the company.

The subtext here is that the women of colour on staff weren’t good warriors, and therefore don’t deserve to be celebrated today. I hope that’s not what was intended, but in any case this highlights a missed opportunity in the original article.

Why didn’t the women of colour on staff sign the complaint in 1970? Were they approached by the white women organizing the action? Did they feel less secure in their jobs, or less supported by the broader feminist community? Had they made less progress? Have they made less progress since? A look, however brief, into these questions would have given us a really interesting angle on the conflict, and would have touched on one of the defining feminist issues of the last 40 years – the intersection of sexism and racism.

And then there’s this:

What bothers us most about their post, though, is that it’s important for feminists to stick together—especially when there’s not much discussion of the F word in the mainstream media at all.

For a long time, marginalized groups within marginalized groups have been told to sit down and shut up, lest they make the broader movement less palatable to the masses. So let’s be clear – when we throw women of colour under the bus, that’s the very opposite of “sticking together.”

Finally, I just don’t accept the premise that feminism is an easier sell without anti-racism. All of the major outstanding feminist issues are deeply entwined with issues of race, in ways that I think a broad, mainstream audience understands. By ignoring race, we only make ourselves more irrelevant.

Written by Allison

23 March 2010 at 2:51 pm

Posted in Uncategorized

Newsweek on inequality at work

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In March 1970, 46 female Newsweek staff sued their employer for discrimination. Now, forty years later, Jessica Bennett, Jesse Ellison and Sarah Ball have written a brave piece about their magazine’s history, and – even better – its present. They have also launched an arms-length blog about “young women, sexism, and the workplace” called Equality Myth.

No one would dare say today that “women don’t write here,” as the NEWSWEEK women were told 40 years ago. But men wrote all but six of NEWSWEEK’s 49 cover stories last year—and two of those used the headline “The Thinking Man.” In 1970, 25 percent of NEWSWEEK’s editorial masthead was female; today that number is 39 percent. Better? Yes. But it’s hardly equality.

Bennett, Ellison and Ball seem to have come to this conclusion gradually – as successful young women, they grew up believing that they could do anything. As Echidne, commenting on the piece, writes:

Outside the question of sexuality, the culture now does tell younger women that they can be anything they want if they work hard enough, though this suggestion is made before one enters the labor force or has any children. I suspect that the transition from college to the labor force is when some women hear that feminist alarm clock ringing.

This is exactly right. I have watched my friends’ ideas about gender shift perceptibly between high school, university, and now the working world. They are not alone. For many women, feminist perspectives on pop culture are not as compelling as what we have to say about the day to day challenges of work and family life.

Written by Allison

23 March 2010 at 11:31 am

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The wealth gap

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We talk a lot about income here, and not as much about wealth. But I’m sure you won’t be surprised to learn that women of colour face a wealth gap. And it’s a big one – almost unbelievably so for single women of colour, according to a new report from the Insight Center for Community Economic Development. The summary is here.

Excluding vehicles, single black women have a median wealth of $100 and Hispanic women $120 respectively, while their same-race male counterparts have $7,900 and $9,730. The median wealth of single
white women is $41,500. To put it another way, single black and Hispanic women have one penny of wealth for every dollar of wealth owned by their male counterparts and a tiny fraction of a penny for every dollar of
wealth owned by white women.

There’s a really illuminating graph on page 7 of the full report, which you should check out – it doesn’t really fit on this page – which reassured me that this isn’t an isolated statistic. A large gap holds for married and cohabiting couples, and, for that matter, for men of colour, though not to the same extent.

The data is from the 2007 Survey of Consumer Finances, conducted by the Federal Reserve Board. (If, like me, you are excited by this sort of thing, you can download the raw data here.) As the authors point out, since the data was collected, the recession has probably changed things for the worse.

Written by Allison

21 March 2010 at 10:27 pm

Posted in Uncategorized