By John E. Calfee Thursday, December 30, 2010
Filed under: Culture, Boardroom, Public Square, World Watch
The New York Times published a fascinating little article this week. It discussed women in Pakistan who are working in low-level positions at local outlets of American businesses such as McDonald’s and KFC, and the Dutch-based Makro supermarket chain. The jobs don’t pay much, but they pay enough to make a real difference for lower-class families who must make their way in one of the most corrupt nations in the world, a nation that has yet to produce the explosive growth now seen in India and China. These women—most of them young and with no more than a high-school education—face difficulties utterly unfamiliar to Western women. Friends, neighbors, customers, and especially their own families are often hostile to the very notion of working outside the home with unrelated men at their side or facing them from the other side of the counter. Death threats are common and, therefore, so is secrecy, even to the point of enduring hours of daily commuting to distant work sites in the hopes of avoiding recognition or detection by neighbors. Women everywhere owe a debt to these courageous Pakistanis, as do many of their own family members and anyone else who wishes to see Pakistan make the leap from poverty with all that such a leap entails for international economics and politics.
Little of this surprises anyone who pays attention to international news, including New York Times readers. But a few things need to be said about the role of business, especially American business, in this pivotal advance. To begin with the most obvious, this reminds us of the ability of giant retail franchising enterprises to realize substantial value from the young and modestly educated—probably a far more difficult way to make money than just hiring people with PhDs granted by internationally respected institutions. By no means does all that value go to the employer, for the employee and her family share the gain. In particular, these employees obtain not only money, but experience dealing with the public (many of these women had practically never left home before taking these jobs) plus a sense of the values and habits (punctuality, reliability, and the like) which are essential to achieving a middle-class lifestyle.
The role of business involves much more than paying a fair wage. Equally important is the typical Western employer’s innate distaste for entrenched gender discrimination (or, in places like India, caste-based discrimination). I doubt this has much to do with anti-discrimination laws, local or American, or that it reflects a corporate intent to make sacrifices in order to do well by women. Firms like KFC typically have plenty of women in management, including higher management. It is only natural that they would look to harness underutilized female energy and talent in the nations where they do business.
Then there is the matter of infrastructure. Many of these firms supply various services to their women employees, including obvious things like meals, but also bus or limo service to their workplace and a safe place from which to walk home. Is this good? In America, so-called “company towns” and “company stores” have a dubious reputation. Aren’t employees better off renting or buying on the free market instead of from their own bosses? But in nations like Pakistan, doing any sort of business is a challenge. Once a firm actually gets established, some economies of scale come into play. An ensconced firm may be in a much better position than start-ups or small local firms to provide essential services that in wealthy nations simply spring forth from a competitive local economy. No wonder that large firms operating in developing nations provide all sorts of employee services ranging from pharmaceuticals (HIV drugs in some African nations) to water, transportation, and housing.
It remains to be seen how well things will go for the young Pakistani women venturing to work for McDonald’s and Makro in Karachi. But much good may come of it. If so, that good is unlikely to be the result of government programs, mandates, or benchmarks (whether Pakistani or American), or the result of work by international agencies or non-government organizations. We probably cannot even give much credit to anyone’s “bully pulpit” or to corporate “social responsibility,” to use the standard term for do-goodism by profit-seeking firms. The truth is simpler. These crucial improvements for women seem to be a routine byproduct of the search for new profits by international firms. Adam Smith’s “invisible hand” is once again providing unintended benefits from business enterprises, benefits that may well eclipse the intended benefits from just about everything else.
John E. Calfee is a resident scholar at the American Enterprise Institute.
Image by Darren Wamboldt/Bergman Group.
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