A nice jumper, sample of a foreign-invested company in HCM City, is priced at VND50,000 (over $3). That jumper, with a “Made in Vietnam” label, is sold in the US at $42.
Huge profit earned from developing countries not shared equally.

Huge imbalance

According to a 2004 survey, the average hourly rate for an American textile worker is $15.78, and $27.69 in Germany. Meanwhile, it is $0.76, $0.55, and $1.29 for workers in China, Indonesia, and Thailand respectively.

Investors in North America and Europe can cut costs dramatically when they relocate their factories to developing countries. On average an American textile factory can cut labour costs by up to 95% when it moves to China.

Meanwhile, developing countries compete for labour, as investors threaten to move their factories to force host governments, workers and trade unions to accept lower labour standards. Thus industrial and export processing zones often have extremely poor working conditions.

“Fair conditions” create better brand-names

The world is struggling with the question of who takes responsibility for realizing international labour standards?

With globalization and trade liberalization trends, governments of developing countries must provide labour forces that are easy to control for the use of multinational groups, considering this a factor in creating a good investment environment.

After the Vietnam-US Bilateral Trade Agreement was signed, many textile-garment factories in Vietnam had to upgrade their toilets, lighting systems, healthcare, and firefighting systems, ban the use of child workers and reduce overtime to enable them to sign contracts with American and European importers.

In the long run, Vietnam should build its image as a country producing high-quality, environmentally friendly products rather than mass produced low quality items, stemming from poor working conditions.

Anya Schiffrin, a professor at Columbia University, and an expert on globalization said that if western consumers know that Vietnamese people are working under good conditions, Vietnam will have high symbolic value.

For example, coffee under the “Fair trade” label are currently sold at higher price than others, prompting Kenyan and Indonesian farmers to try their best to acquire this label on their products. “Working conditions in Vietnam are quite good so it is not difficult for Vietnam to achieve that label,” Prof. Schiffrin said.