>At 06:33 PM 1/26/01 +1100, Autarch wrote:
>>While I can't provide facts and figures or even a concrete
>>example, I understand that most manufacturing workers in develo[ing nations
>>live considerably below independently determined "poverty lines".
>
>I strongly suspect you understand wrong. Workers in even the worst
>manufacturing environments in the developing world, are usually earning
>more than the $1 a day of the unemployed or workers in subsistence
>agriculture.
Hmm. I'd have to share your suspicion, but with you as the subject. :)
I'll have to investigate, but I suspect there are a great number of
developing world workers who must have their entire family work to provide
base minimum sustenance. Instead of arguing the point, I'll have to go away
and dig up so facts and figures. I'll get back to you on this point.
>
>>>Besides, you are improperly valuing the Nike sneaker as the sum of its
>>>manufactured parts, without considering the value of Michael Jordan's
>>>endorsement - which accounts for almost all of the value of the sneaker to
>>>the consumer.
>>
>>What? There is no profit involved for Nike Co.?
>
>I did not say this. Rather, you were arguing that a fair value of the
>Nike sneaker would be the sum of its parts. This suggests that Nike is
>making an exorbitant profit. I am pointing out that you neglect the
>value to the sneaker of Michael Jordan's endorsement, which is very
>significant - and thus produces a much less exorbitant profit.
So, Michael Jordan's endorsement is worth in the vicinity of 200 US per
pair of sneakers? OK, that was facetious, but I still don't believe that
the product is so close to margin that they don't have enough money to
employ a local workforce. I realise that I make that assertion without
giving reason, so let me do so.
Why should a company employ a local workforce above moving operations to a
cheaper locale. I believe it was Henry Ford who first paid his workers a
much higher wage than his competitors - to the net benefit of his own
business. When a local workforce is hired - it injects money into the local
community. to coin a term, "Trickle-up" is a demonstrated fact. Money in
the community at the lowest levels results in increasing wealth for the
entire community. I don't /think/ that is an issue for debate (though you
may prove me wrong). Second part: why not employ this "Trickle up"
philosophy overseas? In my case this comes down to two reasons: nationalism
(I'd prefer to see my country deal with its problems before trying to solve
the problems of the world) and effect (Most companies who set up factories
overseas for manufacturing don't invest the capital in higher local wages
to generate the effect).
>>>> Jobs are not moved to lower wage conditions out
>>>>of any sort of altruism - greed is the common reason.
>>>
>>>Who said anything about altruism? I was talking about the invisible hand.
>>
>>Laissez Faire? I was of the opinion that that idea had been thrown on the
>>scrap heap with many other monetarist principles.
>
>Think again.
Come - there must be more to discuss then a rebuttal of such abruptness :)
Laissez Faire as a priniciple has inborn flaws in that it does not respond
fast enough in today's world. By the time the greed effect has had its
play, those who put the process in play to gain money have moved on, and
will not reap the bitter harvest of their short term decisions.
>
>>>Let me but it a different way - I am not saying that the way the company
>>>arrived at its decision was altruistic. I am saying that the altruistic
>>>decision and the company's decisions are identical.
>>
>>Let us take your argument to it's end. Would it not lead to all companies
>>taking their manufacturing base to the developing world? After all, it is
>>cheaper, and it provides great benefit to the originating nation. What
>>would be the effects of such a situation?
>
>An excellent question! (I asked Jeroen the same thing.)
>
>The answer of course is that the reason workers in developing countries
>earn such low wages is that they are much less productive and reliable than
>the highly skilled, highly educated, professional work forces of developed
>countries. Workers from developing countries veyr often can't compete
>with these workers.
Less productive and reliable? I won't accept that. You're going to have to
define what you mean.
>There are other reasons as well, for instance, the high costs of moving,
>higher transportation costs, les reliable governments, etc.
Higher transportation costs? Again, if you want to move your product to
market, you must accept the cost of the location. The Mountain won't come
to Mohammed!
>
>Neglecting that for a moment, though, if companies were acting
>altruistically and moving as many jobs as economically possible to the
>developing world - what would happen is that demand for workers in
>developing countries would rise, producing a concomitant rise in wages.
>Eventually, the wages of the developed world would decrease as well, as the
>supply of jobs in developed countries fell. In the end, wages would reach
>an equilibrium level worldwide, with all workers earning a wage roughly
>equal to what they produce.
This is the probelm. The companies involved *aren't* acting altruistically
- and this is *fact*. If they were, they would be investing far more in
local wages, and environmental and other safety standards. Seriously, what
would be the cost for a company to *double* the average wage in such a
situation? It would still be far cheaper than a developed world plant - and
it would begin to have the effects you describe. Furthermore, no-one would
be decrying them as the "villain of the week"
>
>>>>So, unless you have a college education you don't deserve a living wage?
>>>>This is a rather extreme position to take.
>>>
>>>What's a living wage? There are a great many people in this world
>>>*living* on just dollars a day. The minium wages of the developed world
>>>are almost exorbitant by comparison.
>>
>>So unless you have an education, you should be reduced to a subsistence
>>situation? I can't accept that either.
>
>The minimum wage is much more than a subsistence situation in this conutry.
But what you propose would eventually lead to this situation in the
developed world. Those who can afford to educate gain good wages, those who
can't live on subsistence situations. At least, unless you had a proactive
government with largely free tertiary education (as we do in Australia)
(Not that this doesn't have its own problems.)
>
>>>My position is that your wage should be determined in part by your
>>>contribution to society. The value you bring to the market should be the
>>>value you bring home from your market. If you are unskilled, then you are
>>>likely not producing much value, and should expect your work to be valued
>>>as such - minimum wage.
>>
>>Who declares what is valuable - and what level of recompsense you should
>>receive?
>
>The free market. You sell the products of your labors on the free market
>for as much as you possibly can.
Now this is altruistic. Unless there is complete (communist-ideal)
solidarity in the workplace, individuals undercutting each other will
result in subsistence wages again.
>> A number of individuals who earn truly exorbitant wages provide
>>very little to society. Frequently these are the same class of individuals
>>who determine what the "working class" (used with caution) should receive.
>>Do you accept that the work a divorce lawyer or tax accountant does is more
>>valuable then a farmer?
>
>Yes. Quite frankly, the world has too many farmers. In the US our
>government supports many inefficient farmers through transfer payments. In
>the developing world, there is a sever shortage of modern agricultural
>techniques.
This is a point I'm not able to argue. I disagree, but don't have the
background, information or facts to dispute with you.
Oh, and you attributed a previous post-reply to me - I deny all involvement :)
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