Available in one of our stores in Grahamstown is an iPhone cover which weighs 3gm and whose plastic is 0.33mm thick.
It promises almost imperceptible protection. It costs R300.
Available in one of our stores in Grahamstown is an iPhone cover which weighs 3gm and whose plastic is 0.33mm thick.
It promises almost imperceptible protection. It costs R300.
Also available at the branch of a national retailer is a pair of quality jeans for R350.
A lot more cotton and thread was used in the production of the pair of jeans than plastic in the iPhone cover. Moreover, the jeans material has been distressed to make it softer, so a lot more energy was expended on manufacturing the pair of jeans, which was probably sewn by hand in China, than the iPhone cover, which was probably extruded from a machine.
The labour involved would also be out of balance: one or two people to oversee the machine, many people to gather the cotton, ensure its transformation into cotton jeans material, and then to cut and sew the pieces together to make a pair of jeans.
Clearly in our jeans-vs-iPhone-covers case, the amounts of labour differ.
It is not that labour is absent from the iPhone cover production: labour was expended in creating the machinery that created the light and thin plastic and the moulding process. Someone laboured long and hard to learn the skills to create all this.
Sewing, however, also requires skill. So, too, does making and maintaining the machinery that spins cotton into textiles.
It seems obvious that it is better to be in the business of making niche, high-end goods than ubiquitous, low-end products, because being at the high end means having more power to set prices.
Those who sell commodities, in the general sense, have less power in pricing. The prices of commodities like iron ore are set by global markets.
The prices of jeans, the most generic of clothing items next to T-shirts, are similar in that it is hard for brands to differentiate.
Levis manages, as do a few other jeans manufacturers, but mostly jeans are jeans.
The price of iPhone covers, and many other things, is not as transparent. Many things come into play when buyers decide to buy a cover for their shiny, expensive status symbol. You may be prepared to pay more for an ultra-light cover that shows off your iPhone.
There’s the psychology of price too, summed up in the phrase, “The more you pay, the more it’s worth.” In these cases, like hyper-expensive malt whisky, advertising and marketing play a role.
So what should the lesson be for South Africa and this small city we live in?
The countries that have developed fastest in the 20th century were those who had the capacity to make and sell desirable things. Here’s the catch: you have to make something to begin with, and it need not be that good to start.
There was a time when the label of origin “made-in-Japan” was synonymous with “cheap and tacky”. That label was soon inherited by Hong Kong, and passed on to Taiwan and Korea. The other little tigers, Malaysia and Thailand probably also went through this stage.
They did not stay there, however. As time went on they improved the quality of what they made, and upped the price. The Japanese now produce premium goods and the Chinese may not be far behind. Taiwan and Korea have sloughed off any reputation they may have had for sweat-shop factories.
As China grows and becomes more prosperous through exports, it may be harder to keep wages low in the factory of the world. That opens up opportunities for other countries, especially Africa, to grow exporting industries.
It is very unlikely South Africa will follow the path of Little Tigers, or of China.
Organised labour has rejected the low-wage assembly jobs of the sort that propelled China into a new industrial era.
Condemning people to a life of hard work along with extreme poverty is not something any South African would contemplate blithely. On the other hand, without low-wage assembly, where will the platform to create many more jobs come from?
What now ameliorates the lives of poor people in South Africa – apart from the informal sector – are grants and the jobs created through the Expanded Public Works Programme and the separate Community Work Programme (CWP). They pay lower wages than the private sector is expected to, but are not to be sneezed at. They won’t break the grip of unemployment – at an official rate of around 24% – and the widespread poverty that is so evident in places like Grahamstown.
The success of the CWP shows many people are desperate enough to work for very little if there is security of income. Can we in all conscience exploit such desperation in the hope of a better life for their children? Are we prepared to face the irony of closing factories and putting people out of work to stop them being exploited? Is there a third way? I don’t have the answer to these questions, but we should at least be aware of the realities.
