Dragon in the toy factory: worker's rights in Asian plants.

There's something odd about it: In an era of unprecedented concern for universal human rights, doubts still linger about whether the basic needs of working men and women qualify as "fights." A disaster at a toy factory on the outskirts of Bangkok ought to help erase those doubts. When a sudden fire last May destroyed the Kader-owned facility, some 188 Thai workers lost their lives because their fight to a reasonably safe workplace had been grossly violated. The four-story factory was a death trap--it had no fire alarm, no sprinkler system, no fire hoses, and no fire escape; some regular exits were locked or blocked. Besides the fatalities, 379 other workers were injured.

Even as Thai officials were investigating the cause of the fire and promising to increase safety inspections of the country's many new factories, The Economist of London offered its historical perspective on the tragedy. "The early stages of industrialization are often rough," it explained. "Britain and

America were able to afford better laws and safer workplaces as they got richer." This kind of analysis, often deployed to put a gloss of inevitability on even the most indefensible abuses of human fights, can sound plausible to the uninformed. But in this case it clearly doesn't fit the facts. The Kader factory, owned by some of the wealthiest Asians in the region, mass-produces stuffed dolls (Bart Simpson, Cabbage Patch, and others) for highly profitable U.S. retail outlets selling to the richest consumers in the world. The enterprise has been well integrated into a thriving global economy, one that differs radically from the historical model on which The Economist builds its rationale. Despite Kader's economic success, its workers have long been victimized by the company's low-wage policy. According to sources within the company, Kader has avoided paying many of its workers even Thailand's $5-a-day minimum wage by classifying them as "temporary" on renewable contracts.

The English-language Bangkok daily, The Nation, which does not share the detached Economist outlook, pointed out a significant aspect of the tragedy: "The bodies pulled out of the wreckage [at Kader] were mostly young and female. Some of them may have been underage. At least two were heavily pregnant. What a waste."

The "waste" multiplied in Bangkok two months later when ten female workers, nine of them teen-agers, died in a garment factory fire from which they could not escape because of locked doors and barred windows. Similar disastrous fires have in recent years occurred in Bangladesh, China, Hong Kong, Indonesia, and Malaysia. In Bangladesh's capital city of Dhaka, for example, three twelve-year-old girls died in a 1990 garment factory fire that killed twenty-five persons and injured about two hundred, the great majority of them young women.

Disregard for safety is only one of the significant issues affecting the rights of workers in poor countries. Often in violation of their own laws, many third-world governments permit and even foster abuses, such as child labor (girls as young as seven and eight in Bangladesh), forced labor (notably in China, on a mass scale), bonded labor (especially for carpets in India), wide-scale discrimination and violence against women, and suppression (by violence, if necessary) of any worker efforts to form their own independent organizations.

A century ago Pope Leo XIII condemned the Western industrializing world for debasing the labor of human beings to the level of a thing, a commodity. He blamed the "cal1ousness of employers and the greed of unrestrained competition" for the rampant exploitation of working men. Today, with competition unleashed on a global scale, working women have become the commodities of newly industrialized nations.

Goods now travel farther than ever; trade and investment reach out further than ever. But personal responsibility does not. At the U.S. end, we---customers, store owners, importers, investors, and all the others--handle the finished products, concerned only about price and quality. It is easier to be callous when the people working for us are Asians on the other side of the world. After the Kader fire, a U.S. trade association officer quickly distanced his industry from the disaster by emphasizing that the Kader workers were not on the payrolls of the U.S. companies.

It's true that fewer and fewer American businesses are directly involved with labor in foreign countries. They own a dwindling proportion of the plants in the export industries of developing countries, even though the United States is often the largest market for their output. Instead of producing the goods, U.S. companies increasingly act as distributors and marketers. Nike and Reebok, for example, have a few American quality control managers in Indonesian factories producing athletic shoes, but the factories, Asian-owned, work simply as suppliers under contract. Levi Strauss & Co., another large U.S. company that mass markets foreign-made goods, has about six hundred suppliers under contract in fifty countries around the world.

Contracting-out gives the U.S. companies a number of advantages. It makes their operations highly mobile, by allowing them enormous flexibility to choose among competing suppliers within a country, within a region, or even beyond, and to make and unmake contracts based on the lowest cost for a certain level of quality. Suppliers and countries compete against one another to offer labor at the lowest possible price. Local factories, squeezed by competitive pressure, cut corners. This can mean no pay for overtime work, no days off even on holidays, no sick pay, no first-aid for injuries, no decent toilets, no fire escapes. The most vulnerable under this global squeeze are uncounted millions of young women at sewing machines, behind microscopes, and along assembly lines in third-world factories.

Back in 1988, the Kadet multinational offered a memorable example of the behavior often bred by transnational mobility. To meet the big holiday demand for Ghostbusters, Mickey Mouse dolls, and Big Hauler trains, a Kader factory in the province of China bordering Hong Kong was requiring its young women workers to work fourteen hours a day, seven days a week. Troubled by such abuses, Chinese government officials objected, but, as a Kadet executive in Hong Kong, Andy Lee, said to a Business Week reporter, "We told them, this is the toy biz. If you don't allow us to do things our way, we'll close down our Chinese factories and move to Thailand." Kader didn't have to move; it did things "our way" both in China and in Thailand.

A few U.S. corporations that rely heavily on third-world imports are beginning to appreciate that they cannot operate that way. Levi Strauss & Co. took the lead in 1992 by adopting a sophisticated, two-tier human rights "code of conduct." One tier, its "terms of engagement for business partners," addresses a wide range of issues that are "substantially controllable" by suppliers. Important examples: no employment of children under fourteen, no use of prison or forced labor, no long working hours (over sixty hours a week), no "corporal punishment or other forms of mental or physical coercion." Recognizing that some problems are beyond the control of suppliers, Levi Strauss's code has another tier called "guidelines for country selection." Under one of those guidelines ("we should not initiate or renew contractual relations in countries where there are pervasive violations of basic human rights"), Levi Strauss has stopped doing business in Burma and is phasing out its operations in the People's Republic of China.

The breadth of the Levi Strauss code is exceptional. Organized U.S. business has so far strongly resisted proposals to give its blessing even to less sweeping codes such as the "Human Rights Production Standards" adopted by Reebok earlier this year, which covers much the same ground as the Levi Strauss code but is silent about doing business in entire countries known for pervasive violations of human fights. The codes are disturbing because they add a dimension beyond the profit motive to doing business abroad.

Moreover, worker rights codes depart from the dominant macroeconomic approach of economists, most of whom concentrate on growth in national output and per capita income, as though these describe the total economic reality. Per capita income averages say nothing about how income is distributed. The Far Eastern Economic Review reported last year: "A significant shift in the distribution of income and wealth in Hong Kong seems to have taken place over the past few years. Review research suggests that the majority of people have gained little from the advances in per capita GDP over that period. Instead, the gains have gone primarily to owners of capital and secondarily to acquisition of assets by the government."

By creating new jobs in the third world, trade should enable poor countries to get off the treadmill of underdevelopment without undermining the standard of living in the developed world. Instead, trade is primarily benefiting the elites, in both developing and developed countries, largely because the international labor market is a jungle. There are no binding international rules safeguarding the fights of workers. Policymakers, liberal and conservative alike, aggressively promote and enforce international agreements to protect the rights of investors and owners of intellectual property fights. But international rules to protect the fights of workers? That's heresy.

Not to everyone, however. The economic theories indoctrinated in graduate schools are facing some real-world challenges. In Asia hundreds of new nongovernmental organizations (NGOs) now speak out for the fights of ordinary people, including workers. Though still neophytes, these Asian NGOs are numerous and like-minded enough that they sometimes dare to oppose the development and labor policies of their own governments.

In the United States the TV networks, chiefly through their popular "newsmagazine" shows, have turned their cameras on the harsh labor realities, including the devastating Kader fire. Illustrated stories about hundreds of thousands of preteen Asian and North African children making carpets for Western living rooms have been perennial features in many leading world newspapers for some years. Now, despite the sensitivities of advertising departments, commercial TV is exposing such scandals, even revealing the brand names of companies involved. These audio-visual stories have a much greater impact on public opinion than headlines and photos appearing on the front pages of the New York Times and the Washington Post.

Meanwhile, a few economists and policymakers are trying to inject some reality into the profession's ratified perspective. Laura d' Andtea Tyson, the new head of the Council of Economic Advisers [CEA], is one such ground-breaker. In the current issue of The American Prospect, economist James K. Galbraith writes that Tyson is not a "model builder" working from economic theory but "a nuanced observer of the world as it actually is, a collector and weigher of evidence, a student of details." So far the Clinton administration has shown a mixed record on international worker fights. The appointment of Robert Reich as secretary of labor is on the plus side. The big minus is its failure to add a meaningful worker rights "side agreement" to the North American Free Trade Agreement, which devotes more than sixty pages to protecting the rights of investors and intellectual property owners.

Opportunities to translate into reality the campaign slogan of putting "people first" are still at hand. The Office of the U.S. Trade Representative, headed by Mickey Kantor, has before it petitions charging serious worker rights violations in Thailand and nineteen other countries and urging cancellation of the extraordinary privileges that businesses, U.S. and foreign, get for shipping imports from those countries into the U.S. Thanks to those privileges, granted under the so-called Generalized System of Preferences (GSP), importers benefit from what amounts to a government subsidy saving them tens of millions each year in U.S. import duties. In the case of Thailand, U.S. and foreign businessmen in 1992 saved uncounted millions by being freed of U.S. duties on dolls and other imports worth $1.8 billion (yes, billions). The intended purpose of these privileges is to promote healthy economic development in poor countries, and so under U.S. law countries with GSP status are supposed to meet certain criteria, among them enforcement of basic worker rights such as banning child labor and meeting minimal health and safety standards. Although Thailand has been in the dock since 1987 for violating those rights, the U.S. government has so far always found it "in compliance."

Such decisions have naturally led many developing countries and companies operating in them to believe that the worker rights aspects of U.S. law mean nothing. One important worker-rights step that the Clinton administration could take this year is to show that there is finally a price to pay--loss of the GSP freebies for ignoring U.S. law.

Even equipped with the constitutional power to regulate international trade, however, the U.S. government can't, and shouldn't, carry the burden alone. Since private commerce now surges across most latitudes and longitudes, international businesses could assume some responsibility to police themselves, following the example set by Levi Strauss. Pressure from consumers and shareholders would help. Women's clubs, church groups, and others could develop contacts with Asia's struggling NGOs. If good people do nothing, it will be a green light for continuing the kind of callous irresponsibility that on the afternoon of May 10, 1993, brought a fiery death to 188 Thai workers, most of them women in their teens and early twenties.

ROBERT A. SENSER is writing a book on the human rights of working men and women in the global economy. A retired Foreign Service labor attache, he is currently a consultant for the Asian-American Free Labor Institute.