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The global factory system

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HealthWiki > Workers' Guide to Health and Safety > Chapter 1: Working for a living and living well > The global factory system

Global companies contract factories all over the world, especially in poor nations, to make their products. These companies — well-known "brands" such as Gap, Walmart, Apple, Adidas, and others — tell the factories exactly what to produce. In this system, the brands don’t have the responsibility to actually build or run any of the factories themselves. But because their orders are so large, they can dictate the terms of the contract (price, quality, schedule) that the factory must meet if it wants the job.

These global companies also bargain with the governments of poor countries in order to get low or no taxes, low wages, weak laws protecting workers’ and environmental rights, and inexpensive facilities, electricity, communications, and roads. These conditions usually guarantee low costs for factory owners who are providing jobs, and especially for the brands who can sell the products for many times what it cost to have the factories make them.

Around the world, export factories compete with each other to offer the lowest prices in order to win contracts from the global companies. This has been called a “race to the bottom” as the brands bargain with the next factory in the next country to offer its workers at lower wages and accept its pollution with fewer rules about paying for clean-up.

This "race to the bottom" has created the conditions that have made jobs in the global factory unhealthy, unsafe, and unfair for workers.

3 businessmen speaking; a man holding money responds.
Our price is low. We pay half the living wage!
We’re lower. Half the living wage and no health care!
Half the living wage, no health care, and a free toxic waste dump!
I’m going to hold out for a better deal.
This page was updated:06 Mar 2018