What's wrong with EPZ jobs?
It is a regrettable feature of many zones that both male and female workers are trapped in low-wage, low-skill jobs. They are viewed as replaceable and their concerns do not receive sufficient attention in labour and social relations. Why?
Most zone-operating countries have an abundant
supply of labour available to work in the zones. This tends to keep wages
low. In tight labour markets the wages and working conditions are usually
much better as employers have to go further to attract and retain workers.
However, even in some countries with an oversupply of labour employers are
finding that zone employment has such a bad image that they are having to
pay a premium to get labour. Workers with experience and skills are in a
stronger position to demand better terms and conditions and can easily move
if not satisfied.
Zones are particularly attractive to labour-intensive
industries such as garments and footwear and the assembly of electronic
components or goods. These industries use relatively cheap and basic technology
and require a low-skill workforce. This means that they can easily recruit
new workers and introduce them into the production line after a short training
period. There tends to be a high turnover of workers but employers are often
not concerned because replacements can always be found. Such employers are
generally loath to invest in training and social security benefits because
they assume that workers will leave after a few years.
The generous financial incentives offered
to incoming investors and the low costs of entering simple processing industries
enable many small and medium-scale enterprises (sometimes with weak capital
bases) to invest in zones. Such companies often lack professional management,
particularly in human resources and labour relations, and are unable or
unwilling to invest in new technology, skills upgrading, productivity improvements,
child care, pension and medical benefits, or to assist workers with housing
and transport services.
These labour-intensive processing industries
compete largely on price, and since labour costs are a large component of
their total costs they often see labour as a cost to be contained rather
than as a resource or asset to be developed.
Very few governments have managed to come
up with appropriate policies and practices to ensure that zone investors
transfer technology and skills to local industry and workers with the result
that the human capital base of the host country is not enhanced to the extent
hoped for.