Monday, April 18, 2016

Closing a Factory

There is a significant moral difference between shutting down a factory in a wealthy country which has the resources to take care of those who would be harmed, and shutting down a factory in an impoverished country which has nothing to draw upon to help those who have been harmed.

Let's close down a factory in a wealthy country.

This is going to harm some people - they will be made worse off. Some will be made significantly worse off.

However, this is a wealthy country, and so it has a huge reserve of resources that it can draw upon to aid those who are harmed. They can be provided with unemployment and other benefits while they rearrange their lives. They can be provided with education benefits - vouchers for returning to school, free tuition and training. Their meals and housing can be paid for while they make the transition.

Let's close down a factory in an impoverished country.

That's it. The people in the factory are reduced to squalor. This is the type of poverty where children do not get enough to eat and suffer parasitic infections and other diseases because people cannot afford even the best medical care. The nation has no resources that it can draw upon to ease their transition to a new life. The nation does not even have a new life for them to transition into.

In the case of the wealthy country, there is a question, of course, of whether the country would actually take steps to help those who are harmed by the factory's closing. However, I am investigating this question on the assumption that we are looking at a nation that IS willing to do something. We may assume that there are politicians running for public office that want to punish companies for closing factories and for moving them overseas. If this is our assumption, we may include among the list of options of "things that can be done" allowing the factory to close and providing assistance to those who are harmed.

Now, there are candidates who are arguing for closing down the foreign factory in an impoverished part of the world and moving those jobs back to the United States.

(This option, by the way, is a pipe dream. See, "Manufacturing Jobs are Never Coming Back". Even when companies do close down foreign operations to build factories in the United States these days, those factories tend to be highly automated and actually create very few American jobs. However, we can set that aside for the moment and assume that there is an actual option to close a foreign factory in an impoverished part of the world and then to "create jobs" in the United States.)

Closing down the factory means returning the people who used to work in that factory to absolute squalor of the type described above.

Not only that, this will have a ripple effect through the local economy. No doubt, there will be others in the community who did not work within the factory for wages but, instead, sold goods and services to the company. The workers in the company would use their additional wages first to purchase food and medical care. Local businesses that provide food and medical care would benefit. If the company does not hire a janitorial crew directly, they may contract out with a business in the community to provide janitorial services. If it does not maintain its own vehicles, it may send them to a local garage when they need maintenance or repair.

When the factory closes, its workers will not be the only ones who suffer. All of the businesses and all of the individuals that have been providing goods and services to the company and to its employees will suffer.

Of course, the same is true when a factory closes in the wealthy country. However, the wealthy country has the means to mitigate these harms. Merely the fact that it is a wealthy country, it can pay to relocate people within the community to places where they can prosper. Or they can provide tax and other incentives for new businesses to step in and fill the gap. The wealthy country can pay for a renewal project. The impoverished company does not have the resources to do anything.

In this country, we tend to do little for those made worse off by the closing of a factory. That creates avoidable hardship. Where the company profits by moving the jobs, the company itself should share at least a portion of its anticipated profits with those employees who will be harmed by its actions. Additional help can come from the general treasury. After all, the American public as a whole is going to benefit from the lower-cost goods (allowing their existing salaries to go further). They can kick in a portion of that benefit to the general treasury, which can use the money to benefit those harmed.

However, the fact that we do not provide these benefits (or do not do so to the proper degree) is not an argument for returning poor people elsewhere in the world to absolute squalor. This will be like saying, because I refuse to pull Jim up as he is hanging off the edge of a cliff, it is morally permissible to push Juan and Chan off that same cliff.

To the degree to which we are concerned with human suffering, these things matter. To the degree to which we care only about our selfish interests and care nothing about the suffering elsewhere that might result from our actions, they become less significant.

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