Shoe City: No, it’s not a shoe store coming to the nearest mall; it’s a planned city, where workers in Africa will make YOUR shoes for close to nothing.
In the past few years, China has vastly increased its economic presence in Africa. With the global economic downturn, China has sought alternatives to the expected trade partnerships with Europe and North America. Increased Foreign Direct Investments and strategic long-term initiatives such as the construction of railroads in Nigeria and the creation of factories in Ethiopia and Zambia have cemented trade partnerships with many African countries.
The factory, located in Addis Ababa, currently employs about 600 Ethiopians, who create about 2000 shoes per day for established American shoe manufacturers such as Guess, Tommy Hilfiger, etc. It is “one-seventh cheaper” to employ an Ethiopian than it is to employ a Chinese worker. Similarly, Ethiopians working for the company receive lower wages than they would in Ethiopian factories.
Despite complaints about the low wages, Huajian Group insists that it makes up for decreased salaries with valuable ‘shoe-making training.’ The overall goal of the strategy, according to the company, is to create a Shoe-city that would ultimately employ about 30,000 Ethiopians, who would work in the factories. Plans include providing the workers with uniforms, canteens and accommodation in the $2 billion manufacturing complex.
The strategy seems highly reminiscent of Foxconn’s operations in China, where there was a wave of suicides in their factories in 2010. Foxconn is a leading manufacturer based in China that helps create products for corporations such as Sony, Microsoft and Apple. ‘Foxconn city’ comprises various factories that employ about 250,000 Chinese, mostly around the ages of 16 to 25. Similar to the anticipated ‘Shoe city’ in Ethiopia, Foxconn also provided accommodation and uniforms for its employees in China, but left the workers largely underpaid with the average worker receiving less than 90 cents an hour and about $90 a month. The working conditions in the Chinese complex are so abysmal that many workers jumped from the top of the factory structure to commit suicide. In response, the company built nets around the factories’ rooftops.
Rather than learn from the problems in China, it seems as if a vicious cycle has been exported and reconstructed in Ethiopia. Whereas in the case of Foxconn, lower wages for Chinese workers primarily benefitted American companies, in Ethiopia, lower wages for Ethiopian workers benefit Chinese companies. There are no nets as of yet in the Ethiopian factories, but certain concerns do have to be addressed. Instead of embracing their ability as foreign companies to pay higher wages than their local counterparts, Chinese companies are racing to the bottom at the expense of Ethiopian workers.
Huajian Group maintains that its ultimate goal is to create a variety of jobs and long-term sustainable growth for Ethiopians. If this is true, at the very least, the company should provide wages comparable to local standards. This first step, coupled with the training the company currently provides would be a step in the right direction. Also, the particulars of the Shoe city ought to be reexamined. If accommodations are to be provided by the factory complexes, they should not be as hellish and cramped as those in Foxconn city. Further, localizing managerial positions for example, would help utilize local knowledge in efficiently running the factories and boost local skills.
Ultimately, we as consumers have to be increasingly cognizant of where our products come from. The situation in Foxconn became publicized due, in part, to the efforts by Mark Shields’ online petition for a more ethical iPhone, which received more than 250,000 signatures. WE, as conscious consumers, have the power to stop a repeat of the wrongs of Foxconn city in Shoe city. We can choose to support only ethical practices – and the good news is that there are good options. Other shoe manufacturers in Ethiopia, such as Bethlehem Alemu are already taking the initiative to create ethically produced footwear. Her shoe company, Sole Rebels, is the only footwear company in the world to receive the World Fair Trade Organization (WFTO) fair trade certification. Huajian should learn from the mistakes of Foxconn in how not to run a business and recognize that an increasing number of consumers will not tolerate unethical practices in running Shoe city.