I emphasized in an earlier post ('50 Cents On the Dollar?') that
'installing' 3rd world dictators in the hope of buying their nations'
resources on the cheap would not be a workable strategy for the 'G8' and
other affluent countries. For example: "How many countries actually sell
their oil--or any other resource--at less than the going world (market)
price? Why should all those 3rd world dictators--by all accounts, among
the greediest, most venal of men--sell to any but the highest
bidders, the ones who give them the largest number of dollars
(price-plus-bribes)? Exxon, BP, and all the other of the world's oil
refiners are routinely 'played off' against each other in the bidding
process and end up, of course, paying the going market price."
One member suggests, though, that while I may have a point about the skill
of all those corrupt heads of the poorer nations in extracting the full
price-plus-maximum bribe for their natural resources, I'm overlooking the
greedy corporate exploitation on the LABOR side--all those Nike factories
in Asia, for example, that pay only subsistence wages (or worse) to their
workers. Examples abound of factories being closed in the U.S. that were
paying, say, $10 per hour and reopened in 3rd world countries where they
can have all the labor they need for a fraction of that U.S. wage, say as
low as $1 per day.
But is that relocation--and the latter wage scale--really 'exploitation'
of those poor workers who get the new jobs? Nike must pay, for example, at
LEAST as much as the going wage rate in the country in question or it will
have no takers. And if there was no pay differential involved--if Nike
should be forced to pay, for example, the same $10 per hour in Asia that
the market requires it to pay in the U.S.--there would be no incentive to
MOVE the factory in the first place and thus no new jobs for those 3rd
world workers.
A wage differential is thus necessary to bring in those new jobs but is it
perhaps excessive? In other words, should Nike, to again use it as an
example, VOLUNTARILY pay MORE than it HAS to pay to attract all the 3rd
world workers it needs? First, it's subject to a 'ceiling' factor--a limit
set by the differential that must be present in order to make it profitable
to relocate the plant from the U.S. If, say, the move would improve
profits so long as the poor-country wage doesn't exceed $5 per day (versus
its prevailing $1 per day), that figure is necessarily a cap for Nike there.
But Nike has competitors, e.g., Rebok. If the former voluntarily pays 5
times as much for its labor as the latter, its profits will be less, its
investors will abandon it, and it will be underpriced daily by its
lower-cost competitor, Rebok, in the global marketplace. Its days will be
numbered. It has violated the cardinal rule of market economies--it has
failed to minimize costs.
The real problem, of course, is the pathetic pay levels that prevail in
the home-grown DOMESTIC markets of the 3rd world countries, those that
establish their going wage scales and thus the amounts that must be paid by
all employers, including the foreign-owned. Nike, Rebok, and the other
corporate minions of the 'rich' nations of the west aren't the ones who
determine those prevailing rates in the 150 or so poorest countries of the
world. A society with a going wage rate of $1 a day is one with a wretched
set of domestic economic POLICIES--the work of a national government that
is, again, corrupt and/or incompetent.
A wisely-focused June 18 protest would have 150 'targets,' not 8. When
the Net's activists begin to organize themselves around the goal of
bringing honest and competent leadership to all of the world's poor
nations--and hammering out for the benefit of their citizens the economic
policies that undergird the path to national affluence everywhere--this new
medium will be on its way to realizing some of its great potential for
relieving global poverty.
Charles
Charles Mueller, Moderator
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