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July 17, 2013 at 6:48 AM

No trade with Kaesong, North Korea


A South Korean soldier at the border with North Korea, near the Kaesong industrial complex.
Ahnn Young-joon / AP


“Made in North Korea” at Kaesong. I have never seen such a label, but if I did I would not buy it.

That’s an admission. I am almost always in favor of allowing Americans to buy products from foreign countries, whatever their wages or labor conditions. I believe that poor people in poor countries are better off in the long run (and usually in the short run) if I buy their goods than if I don’t. Progressives who want to help foreign workers by boycotting their products strike me as ignorant of the way economies work.

I was in a Seattle department store the other night, waiting for a family shopper.  Looking at women’s clothing, I saw apparel from Bangladesh, China, Indonesia and Cambodia. I wouldn’t boycott any of them.

Even Bangladesh, in which the minimum wage for a textile worker is just $38 a month and working and living conditions are terrible. Better to buy than not to buy.

It’s also good to use the disastrous April 24 collapse of a factory in Bangladesh to embarrass the companies and the government to improve wages and industrial conditions. Because of the uproar over the disaster–worse even than America’s Triangle Shirtwaist fire — the government at Dhaka now promises to raise the minimum wage and to allow textile workers to form unions without permission from employers.

Worldwide there is a ladder of wages, benefits and working conditions. Bangladesh is at the bottom, but inasmuch as it is in the world trading system, it is on the ladder. It can move up, and buying its products and publicizing its failures helps push it up. This is happening in China, and decades before that, it happened in South Korea.

North Korea is not on the ladder. There are no unions or hope of unions or individual bargaining either. There is no market for labor. The employers cannot choose their employees or the employees their employers, and they are not allowed even to eat lunch together. It is more like a prison renting out convicts — something I don’t necessarily object to with a prison, but these are industrial workers.

Kaesong opened in 2004. By 2006, the salaries there were reported to be $57.50 a month, paid by South Korean employers to the North Korean government. The workers reportedly received $8 a month.

A more recent figure reported on North Korea Economic Watch was a total wage of $160 a month, of which 55 percent was paid to the North Korean government and the rest ($72) was said to be paid to the worker in North Korean won or in coupons. But the article immediately says the $72 “value” was false, because the won and the coupons wouldn’t buy much.

The average workweek at Kaesong was reported to be 61 hours. The article says it was not clear whether long hours are an option or a requirement.

The North Koreans closed Kaesong in April because of a political fight with the  South. The two sides are dickering over the terms for reopening it. The place recently employed 53,000 North Korean workers for 123 South Korean companies.

Products from Kaesong are excluded from the U.S.-Korea Free Trade Agreement. (Also from South Korea’s trade agreement with the European Union.) South Korea wanted them in, and the Bush and Obama administrations wanted them out. They’re out. That’s fine with me. The arrangement between the South Korean employer, the worker and the North Korean state is too much to stomach.



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