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Friday, September 27, 2013

Professor Joel Paul to Testify Before Senate Subcommittee on "Social Dumping"

Economists say imported goods produced in substandard conditions export social problems like child labor and unsafe working conditions to developing countries.

Professor Joel Paul

Professor Joel Paul

Professor Joel Paul will testify Oct. 2, 2013 before the U.S. Senate Committee on Banking, Housing & Urban Affairs Subcommittee on Economic Policy on what economists call “social dumping.”

The hearing is designed to examine how to rebuild American manufacturing.

Social dumping occurs when a country imports goods that were produced in sub-standard conditions. When countries like Bangladesh export goods to the United States, they are also exporting social problems like child labor, unsafe working conditions, and environmental degradation, Paul said in an interview prior to his testimony. “These imports compete against U.S. domestic products that are necessarily more expensive to produce because we require producers to internalize social costs like pollution or labor welfare,” he noted.

“Where workers are not paid fair wages and are denied the right to collectively bargain, where they are forced to work in hazardous or inhumane conditions, or where production facilities do not meet minimal environmental standards, U.S. manufacturers at home or abroad that maintain good labor practices are disadvantaged,” he said.

Paul will explain to lawmakers that by permitting social dumping in our market we “confer on foreign exporters an artificially constructed comparative advantage that distorts the market and hurts U.S. manufacturers and workers.” Foreign exporters, he said, should be required to meet basic labor and environmental standards established by international agreements. “We should use the existing mechanism for levying antidumping duties to impose duties against social dumping in order to create an incentive for exporting countries to raise regulatory standards.”

The topic has been the subject of intense scrutiny since April 2013, when more than a thousand garment factory workers perished in the fire and collapse of a sweatshop outside Dhaka, Bangladesh. “This factory produced millions of dollars’ worth of garments for forty retailers around the globe, but it paid average wages of about one dollar per day for long hours in appalling and unsafe conditions,” Paul said.

A full copy of Paul’s remarks, “Leveling the Playing Field for U.S. Manufacturers,” will be available following the Oct. 2 hearing. The hearing takes place 2:30-4:30 PM in the Dirksen Senate Office Building. For additional information and witnesses, click here. The hearing will be carried on C-Span and the Committee's sites.

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