Third World Workers Need Western Jobs

[mikemover]

I must admit that I'm ignorant about a lot of aspects of this issue, but this article makes a lot of sense to me. I thought some folks might want to read it, or offer some opinions or facts on the subject.

Mike
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Thursday, May 06, 2004
By Radley Balko

Opponents of globalization claim that when a Western company moves to a developing country in search of cheaper labor, the corporation is exploiting its new workers and taking advantage of Third World poverty.

Is that really what’s going on?

Perhaps the best way to gauge if Third World workers think they are being exploited by Western employers is to ask them. In 2003, the Pew Center for People and the Press did just that, surveying 38,000 people in 44 nations touching every region on Earth.

When asked their views on multinational corporations, in nine out of the 10 African countries surveyed, at least 70 percent of respondents answered “good” or “very good.” The tenth, Angola, stood at 69 percent. In six of the eight Latin American countries surveyed, at least 60 percent of respondents answered “good” or “very good.” In six of the eight Asian countries surveyed, a majority of respondents held favorable views of multinationals. In Eastern Europe, only Poland and Russia had majority-negative views of multinationals.

The Pew survey results may be counter-intuitive for a Western audience inundated with tales of the horrors of “sweatshops,” but they come as no surprise to scholars who research trade and development.

University of Michigan professor Linda Lim, for example, visited Nike factories in Vietnam and Indonesia in 2000 and found that workers there earned on average five times each country’s respective minimum wage. University of Minnesota professor Paul Glewwe reports that per-capita consumption among Vietnam workers in foreign-owned companies is twice the national average. Edwin M. Graham of the Institute for International Economics found that the affiliates of U.S. multinational corporations pay on average twice the local wage in the developing world.

For laborers in the developing world, what we call sweatshop jobs may actually be the best of a series of bad employment options available to them, and/or the only or best option for supporting themselves and lifting their families out of poverty. Even minimal wages can dramatically improve the way people live. New York Times columnist Nicholas Kristof writes that just a couple of dollars in some countries can buy netting to thwart mosquitoes. For a Third World mother worried about her children catching malaria, such a small amenity can have an enormous impact on her quality of life.

Acknowledging that sweatshops are merely the best of a bad set of options in developing nations, removing them as an option can be devastating, setting emerging economies back for years and preventing the hurting people in these countries from taking steps toward a better life.

Consider these two examples from the British Empire. Economist and columnist Thomas Sowell writes that half a century ago, public sentiment in England came down hard on British firms who were paying low wages to West African workers. British lawmakers went to work, requiring the companies to pay artificially high wages. Of course, many British firms decided the new wages weren’t worth the investment, and pulled out. As for West Africans themselves, Sowell writes, “they did not get the work experience that would have allowed them to upgrade their skills and become valuable and higher-paid workers later on.”

Today, West Africa continues to fester in abject poverty.

Contrast West Africa to another British protectorate, Hong Kong. There, the British Crown adopted a largely laissez-faire approach to the Hong Kong economy. Hong Kong soon found its economic footing in manufacturing — sweatshop labor. Today, Hong Kong has long moved on from sweatshops, and boasts one of the world’s strongest economies. Where it took the U.S. and Western Europe a century or more to rise from agrarian, subsistence economies to dynamic, high-tech industry and high finance, it took Hong Kong just 25. Provinces in China that allow sweatshop labor are doubling in per-capita income every few months.

The issue of child labor has long been a flashpoint in the globalization debate. As repellant as the notion of child labor is, the harsh truth is that a Western company that stops using child labor in some Third World nations does not change the economic conditions that had those children working in the first place. Nor does it change the local cultural standards that accept and expect child labor. Unfortunately, in many corners of the globe, closing the factories and sweatshops to children often just seals for them a far worse fate.

In the early 1990s, for example, the U.S. Congress considered legislation that would have imposed sanctions on corporations who benefit from child labor. The bill never got through Congress, but it did trigger enormous political pressure on such companies. One German company buckled under pressure from activists, and laid off 50,000 child garment workers in Bangladesh. The British charity group Oxfam later conducted a study on those 50,000 workers, and found that thousands of them later turned to prostitution, crime, or starved to death.

In 1995, anti-sweatshop activists persuaded Nike and Reebok to close down soccer-ball manufacturing plants in Pakistan to thwart planned protests during the 1998 World Cup. The closings laid off tens of thousands of Pakistanis. Additional activist-inspired closings laid off hundreds of thousands more. The UPI reports that the mean family income in Pakistan soon fell by more than 20 percent. In Tomas Larsson’s book "Race to the Top," University of Colorado economist Keith Maskus says the Pakistani child laborers who lost their jobs were later found begging, or getting bought and sold in international prostitution rings.

UNICEF reports that an international boycott of Nepal’s child-labor supported carpet industry in the 1990s forced thousands child laborers out of work. A large percentage of those child laborers were later found working in Nepal’s bustling sex trade.

In a world full of robust, stable economies, abundant natural resources and highly skilled workforces, cheap labor is the developing world’s only real bargaining chip. While it may make us feel better to demand that Western corporations invest only in countries with high labor standards, in reality such policies rob the world’s poorest people of their only marketable asset.

We should let employers seek out willing laborers wherever they can find them, but the key word there is "willing." "Free" trade that utilizes slave or coerced labor isn't free, it's theft. But if people living in poverty are willing to work the wages multinationals want to pay them, we shouldn't stand in the way. Corporations get cheaper labor. The world's poorest people can begin to inch their way out of poverty. Western consumers get cheaper goods. And we begin the process of moving the world's poorest economies down the road to prosperity, which benefits all of us.

-----Radley Balko is a policy analyst with the Cato Institute and publishes a Weblog at TheAgitator.com.

[mikemover]

No opinions or anything on this? Come on, where's my pinko "workers' paradise" commie guys? Where's my beloved capitalist pigs?

Anybody?......

Hello?.....

Mike

[mikemover]

Originally posted by TheVirginiaDude
THe Company can realy save money buy moving there lock stock and barrel, why pay management more than $5 a week when locals can do it, and I am sure you can find thousands to be CEO for $100 a month, thats a huge savings for the stockholders.

OK....









Now how 'bout somebody who can say something serious, or at least something that actually makes sense.

Mike

[mikemover]

Originally posted by TheVirginiaDude
You like outsourcing labor, there is even more money to be saved by outsourcing management too. Hell moving the entire company to africa will net you a total corporate labor cost of less than one middle manager here. Seriously.

Plus you got your bump................

Hey, if you must to "go there".....then I'll say this........It's obviously WORKING, because more and more profitable companies are doing it.

Perhaps if more American workers would make their services WORTH the money they are demanding, then they wouldn't be losing out to foreign workers, eh?

One can either keep whining, or work towards finding a free-market solution? Which are you going to do?

Mike

[mikemover]

Originally posted by Botnst
Nike moves manufacturing to Vietnam. Wages in Vietnam increase, raising teh std of living for Vietnamese. At the same time, Belynda Schmo goes to Wallmart and notices that Nikes are cheaper than Reeboks by a few bucks. Belynda buys the Nikes and also buys a couple batteries for her kid's Gameboy and a coke for her fat kid from the McDonalds.

Everready gets a slight bump in orders from Wallmart. McD's makes a bit more and so does Coke and International Paper, who makes the cup.

Multiply that little story by every pair of Nikes sold.

Every savings in manufacturing a product while maintaining or improving quality benefits the stockholders, employees and consumers.

B

Yep.

Mike

[MTI]

Once heard a commentary that explained the situation like this:

The western world, particularly America, is like an alcoholic, addicted to, and swilling down, cheap consumer goods, clothing, electronics, and even food. We're buying stuff on credit, living way beyond our means . . . but, we're keeping the economy afloat and thriving.

The "bartenders" serving up all the joy juice, are countries like China, India, Pakistan, who are more than happy to live within their means and to keep the westerner's drunk and happy. Like any good bender, there's going to come a day when we wake up with a hell of a hangover.

[MTI]

Botnst, while in theory that sounds good, in practice it's not as smooth. Our trade "bartenders" are indeed "selling" their cheap labor to us, but under the theory, they should be taking that gin soaked dollar and spending at least a good portion of it back in the US, like on US made Catepillar heavy equipment to build new roads to the factories and harbors, and to some extent they are doing that. However, our purveyors of joy juice also have to deal with their own inflation in their own neck of the woods and their "hot" economy scares the hell out of them too, causing recent trends to cool things off and to not spend outside their own borders as much as they would like, or should. Coupled with the spectre of inflation, what if a factory in China told Wal-Mart "gee, you know those toasters you want us to build for $2 . . . it's going to cost $2.10 . . . " will that signal Wal-Mart to knock on the doors of a Sengal toaster factory? Globalism sure is a pain!

[PC Dave]

Originally posted by MTI
.....they should be taking that gin soaked dollar and spending at least a good portion of it back in the US, like on US made Catepillar heavy equipment to build new roads to the factories and harbors, and to some extent they are doing that.

They've been using the gin-soaked dollars to buy U.S. Treasury debt, allowing the Fed to keep rates low, the housing bubble going strong (cash-out refis = consumer spending) and generally perform the impossible balancing act of funding extraordinary budget deficits without triggering either inflation or higher interest rates. The Fed couldn't do it without the Chinese, Japanese, and Taiwanese - their central banks have been by far the largest buyers at Treasury auctions in the last year, and over $$1 trillion in Treasury debt is now held by foreigners, primarily those three central banks.

.....However, our purveyors of joy juice also have to deal with their own inflation in their own neck of the woods and their "hot" economy scares the hell out of them too, causing recent trends to cool things off and to not spend outside their own borders as much as they would like, or should...

For the last year we've been wondering what would happen if the Asians stopped buying - well, we're about to find out. The Japanese and Chinese have both scaled down their bids at Treasury auctions (gee, I wonder why long rates have been going up even though the Fed hasn't raised short rates?). The next few months should be interesting.

[MTI]

sp0ck, your existence would be so much more peaceful if you just "excluded" all of us, don't you think?

[mikemover]

Originally posted by Sp0ck

- MM

This comment is total speculation based on a bias opinion. Starting out with pre-conceived bias's and trying to force them on us is not a way to objectively attack a subject.

Pardon me? Speculation? I'm not speculating....It's going on right NOW!

Foreign workers are doing the same jobs American workers are doing, for less. It makes financial sense for a company to hire the person who works for less, as long as that person performs the same job at the same level of proficiency. So employers hire the foreign workers. This is not rocket science here....and I'm not "speculating" about it, I'm just observing and commenting on what is happenning right under your nose.

Mike

[crash9]

MM
Foreign workers are doing the same jobs American workers are doing, for less. It makes financial sense for a company to hire the person who works for less, as long as that person performs the same job at the same level of proficiency

All true, but why do you think this is happening so much more right now? There’s been no time in my memory that it wouldn’t pay to outsource work – and a lot always has been. Why is it suddenly such a major problem?

[mikemover]

Originally posted by crash9
All true, but why do you think this is happening so much more right now? There’s been no time in my memory that it wouldn’t pay to outsource work – and a lot always has been. Why is it suddenly such a major problem?

Technology has made it much more do-able....The internet, cell phones, satellite phones....also fast, reliable, and affordable international shipping is now the norm....

American workers are also demanding more and more money for doing the same job, if not less, and now we're seeing the backlash.

I'm far from being an "expert" on the subject, but these seem like logical assumptions.....

Mike

[crash9]

Technology has made it much more do-able....The internet, cell phones, satellite phones....also fast, reliable, and affordable international shipping is now the norm..

Yep – that sounds like the nail all right – and then that’s developing economies in those areas, so that they will become tomorrow’s consumers. These asia/pacific funds are getting nailed right now – when they start back up they should be good for much more up up – go high

[mikemover]

Originally posted by Sp0ck
" - MM

Again, the part of your statement I am saying is total speculation is this one above. Let's not side step the issue.

"Technology has made it much more do-able....The internet, cell phones, satellite phones....also fast, reliable, and affordable international shipping is now the norm...."

Sorry but MORE B.S. Mike! It is being driven by CORPORATE GREED AND TAXATION LAWS NOT technology! GET with the program man!Corporations are trying to get around United States Taxation and a fair job market. Technology is secondary to the motive. You are looking for a reason to use your "lazy American worker" argument. I am all fine with that but for poops sake, use it when it is appropriate and don't white-wash according to your whims! End rant AGAIN.

NO, it is NOT speculation....this IS the reason outsourcing is happenning....Employers CAN get the same job done for less, so they are doing it.

Corporate greed has always been around. If that was the only cause, it would have been the issues that it is now LONG ago.

I never said technology was the motive. I said it was the enabler.

If you're going to rant, at least pay attention to what you're ranting about.

Mike

[mikemover]

Originally posted by Sp0ck
Technology is a red herring argument. It is not replacing jobs and not even the issue. So stop mentioning it.

Corporations are leaving America (where I prefer to live) because they don't want to pay taxes and found a way to lower the bar on wages and short the American people. Plain and simple. I am more qualified than most overseas and many here in the U.S. to do my job. Furthermore, technology has not taken over my job and neither has some foreigner. I still support Keep jobs here. Keep manufacturing here.

Apparently you just don't understand the technology part of the argument, so I'll drop it in order to avoid wearing out everyone else who does understand. Maybe someone else can explain it in a way that you'll grasp. Botnst?....

Anyway, you work FOR an employer, so your position makes sense to you. If you BECAME an employer, and saw how much money you could save by outsourcing, your position might be much different.

Mike