The simple T-shirt can help entire nations escape from poverty. Or, maybe not.
Displaying a black T-shirt made in Bangladesh that he'd bought that day at Macy's, economics journalist Adam Davidson presented the widely accepted economic theory about how impoverished nations build a middle class on a foundation of garment manufacturing. Then Davidson turned that theory on its head, offering a vision that's as ambiguous as it is optimistic.
In his Thursday talk at the Portland-based international relief organization Mercy Corps on the question of why some countries are poor and others are not, the co-founder of National Public Radio's "Planet Money" was at his storytelling best. His was a big picture topic of the kind that the Planet Money podcast, an insightful source for business and economics analysis, consistently explains so well to those of us trying to understand wage protests by underpaid garment workers in Bangladesh and resistance of clothing manufacturers fighting to save pennies per garment.
The jobs in garment assembly factories are mind-numbing, working conditions are terrible, and wages are just $3 a day. Yet factory workers in Bangladesh — mostly women — are certainly better off than their impoverished fellow citizens without factory jobs, Davidson said.
The lesson of history is that those workers and their nation are on the rise. England, Japan, and the United States rose on the backs of workers who learned skills that opened opportunities.
But it turns out that technology and easy trade are slicing the past from the future. Trade makes it possible to move skilled functions of garment making to more advanced nations, rather than allowing workers in Bangladesh to move up to better, higher-paying jobs. The shirt that Davidson purchased in Portland — $30 for a package of three — traveled to about 20 locations between raw material and the department store shelf, he estimated.
And technology makes it easier to replace low-skilled workers with machinery, further shrinking the potential to build a middle class. While workers in Bangladesh who are now demanding higher wages might have success in gaining modest increases, Davidson said demands for significantly higher wages would be counter-productive, pushing the jobs to some other desperate place.
So, if one theory for economic development is no longer working, what's next? Davidson now hopes that international economic development is starting to move into a post-big theory era.
The history of medicine offers a possible course, he said.
It wasn't until the dawn of the 20th century that the medical field began to advance rapidly with new treatments and medications, and since then has created a foundation for building on research from countless sources that bring about ever more rapid improvements.
When it comes to feeding and clothing the world's poor, Davidson would like to see similar experimentation, based on achieving solutions that don't necessarily form into one big idea. And that requires, he said, a modesty and humility about the art of the possible in a world where creating even a simple T-shirt is unimaginably complicated.