From: Brett Paatsch (paatschb@optusnet.com.au)
Date: Thu Jul 03 2003 - 02:16:44 MDT
Rafal Smigrodzki writes:
> Brett wrote:
> >
> > And this means that cheap labor in say the US cannot
> > compete on price with cheap labor in say Malaysia.
>
> ### Yes, they can. If they don't want to, who cares. The
> world was built by diligent workers, not lazy drones.
Because of regulations put in place to protect him the
unskilled worker in the US may not get the *choice* to
sell their services at price parity with those in third world
sweat shops. In some labour intensive forms of manufacture
(perhaps producing Nike shoes) the total cost of production
is substantially determined by the cost of the unskilled labour
force.I think car plants and other forms of manufacturing facilities
are also examples of where the cost of production is
substantially determined by the cost of the unskilled labour force
A multinational can establish its plant wherever it gets the cheapest
cost of production. Capital can move across national borders
easily but the US unskilled worker will not find it easy (even if he
wanted to) to avoid the oncosts of occupational health and
safety regulatons. The US worker is not free, in the free market
to just up and relocate to the third world country.
Nor I suspect would you or I want him to have to reduce his
cost at the price of his health and safety.
> ------------------------------
>
> The States will quite
> > rightly in my view insist of safety standards for its workers and
> > this lifts the cost of the workforce. In countries where a injured
> > worker is essentially just tossed aside for another the labor
> > force is cheap.
>
> ### Some safety measures reduce overall cost of production.
> an injured worker is a lost opportunity - the money invested in
> his being born, educated, trained, is wasted.
I think this probably applies more when one is considering something
less than the global market.
In the case of say unskilled labor - manufacturing factory workers,
the cost of being born in say India and *not* educated or trained
is likely to be comparatively low.
Free world goverments elected on four year cycles are not
encouraged to take longer terms views because to do so puts
them at shorter term disadvantage. Its hard to get elected
pushing a platform of delayed gratification. And if you succeed
then there is no guarantee that your government will be there
to enjoy the benefits of defering benefits.
Similarly capital (super funds) looking for the best return on
investment anywhere in the world where they can find have no
no reason to get involved in the lifting of human rights outside
of the nations in which their shareholder live. Indeed to the
extent they care about such things, or that multinationals make
their decisions to locate their plants in regions on other than
economic bases they do so at a competitive disadvantage which
is likely to see their financial stakerholder persuing their own best
interest in the short term switch into less "caring" super funds
or multinationals.
> A safety measure which reduces overall cost by finding the
> best balance between safety and economy, is a winning strategy.
> Countries which toss workers aside will remain poor, because
> they waste their resources.
Yeah but the west provides most of the capital and the average
investor in the west that puts their savings into multinationals or
superfunds that invest in the same are concerned for mazimizing
return on investment not nation building. It may well be in the
interests of the capital holding "classes" in the west that some
countries do remain poor at least in the short to medium term
and in the absence of political systems that enable politicians
to plan for further than four year terms with confidence it is
very hard for even the free western goverrments to choose
the long term smart plays without putting themselves at a short
term disadvantage in getting elected.
>
> The argument of alleged unsafe working practices abroad
> that allow the poor countries to compete with the rich ones,
> is just another protectionist mind-game. The reason why the
> Chinese can compete with Americans on price is because
> they are ready to work hard for little money, not because
> they feel like getting killed for no reason.
I don't doubt that protectionist mind-games play a part but
I am pretty sure I could find examples of unsafe work practices
in third world countries that you would consider more than
alleged.
Regards,
Brett
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