Politics!

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Re: Politics!

Postby oddtail » Mon Dec 30, 2013 5:48 am

Pink Freud wrote:It wouldn't matter, Val. The factories in China that make Wal-Mart merchandise aren't owned by Wal-Mart, they're owned by someone in China who just sells the merchandise to Wal-Mart cheaply. They set that up when the first accusations of "Wal-Mart-owned chinese sweatshops" started flying around. Same with anyone else who buys products made in China. Iphones aren't made by Apple, either. They're designed by Apple, but made by Foxconn for Apple, so no American business rules could possibly apply to them. Outsourced production, tech support, what-have-you, are all handled by companies owned within that country that are just selling their products/services to the American companies, so that when scandals pop up about Foxconn suicides due to stress and harsh working conditions, or chinese toy companies using lead-based paint, it's so sad and someone should do something over there but it's not anyone in America's fault because the businesses are not owned by Americans.


I'll add to that the simple fact that, as sad as it is, much of the world's economy, especially related to the production of goods, relies HEAVILY on the fact that a lot of various goods are produced in China/India, AND produced cheaply. Sure, it does not seem very fair that people work in China for completely unfair wages, and I *would* like this to change, but it can't just be magicked away with adding a simple rule. If China suddenly disappeared from the map (along with its huge workforce that produces things at near-zero cost), developed countries (such as the US or most European countries) would be hit very hard. And the POOR people in those countries would be hit in the most immediate, lasting, and harsh manner.

The flipside of terrible working conditions and wages in some countries *is*, currently, that people who are relatively better off (by virtue of living in a Western country) have a much easier life. A person from the US, *especially* a person who earns very little by American standards, buys cheap goods because they are produced for a cost that just couldn't be achieved in the US. This is the direct result of how global economy works, and even if it *was* possible to remove one part of this equation (and it isn't), it'd just make pretty much every economy collapse in a chain reaction. And when I say "cheap goods" I mean things like "being able to afford decent food and reliable clothes on a fairly regular basis", not "being able to buy a smartphone".

Note - this does NOT mean that there is no merit in some anti-globalist ideas or initiatives for change. But the fact that the current system is wrong doesn't change the fact that it *is* needed right now. It is a good idea to change it, but it's not possible to change a notable aspect of that just by forcing it. And nearly-no-cost production of goods in China/India, which pretty much results from near-zero wages, is one of those things that just keep the economy going right now.

It's not directly relevant to the issue, but a good example of when economy broke when people attempted to fix it by drastic changes is the economy/industry of just about *any* Communist country. Some of them collapsed even though they had a lot of initial momentum (like the Soviet Union). Some of them had to switch to a more market-driven economy to survive (like, well, China). World economy is a fragile and complex system, and the ONLY way to make sure everyone earns a fair amount of money is to lean away from capitalism as far as possible. As problematic as capitalism is, an economic system driven primarily (though not exclusively) by it *does* seem to be the most stable and efficient way to go, even if it's sometimes really unfair. And the necessary evil of capitalism *is* looking for a way to get results without spending much, and that (in the current shape of the world) includes outsourcing jobs to places where people get paid nothing or next to nothing.

And besides - the economic situation of the individual is *not* merely a product of how much they earn. Other things, like costs of living factor in. I am relatively comfortable financially, and probably a *lot* better off than some of the forum-ers that live in the US. I earn what is slightly above the average pay in Poland. In most of the US, the monetary amount of what I actually get would be below minimum wage. But since the prices of just about anything are anywhere from 2 to 6 times lower than in the US, I have relatively more spending power than if I lived in the US and earned, like, 50% more.

So, in the hypothetical situation where people in China started earning US minimum wage, they would actually be paid a LOT of money. So, paying people outside of the US the same amount of money as people in the US would not, arguably, be all that fair (compare a factory worker that produces for Wal-Mart with a factory worker that produces for the local Chinese market - in your scenario, it'd make for two people who do the exact same job, one of whom would earn, I dunno, five-ten times more than the other? Maybe more?), as they'd get more for their wages than a person in the US does. That's part of the reason people from Poland work in the UK or the USA (and why people get upset about "foreigners stealing their jobs"), or why people from say, Ukraine or Belarus treat Poland (and the money they can make there) as a land of opportunity.

In short -

1) the global economy is a big, tangled mess and you can't poke TOO much at it without everything collapsing;
2) the issue is more complex than how much a person gets paid. There are a lot of other factors, primarily costs/standards of living.
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Re: Politics!

Postby Lia S » Mon Dec 30, 2013 6:08 am

One could make a law that requires that companies buy only from suppliers that pay their employees as much as American employees would be paid.

The big problem is that it will only work if a majority (by population) of higher-wage countries introduce such laws. Otherwise companies will simply move and ignore the US market, which leads to Americans buying expensive and poorly designed “made in America” things while people in other countries continue to buy cheap and reasonably good “made in China/Bangladesh/etc” stuff. Making it expensive to live in the US while also making the US irrelevant to the world market is not a good idea.

Another problem is that this kind of rules are impossible to enforce. Doing anything in a low wage country means interacting with companies based in that country, and those are very likely to try to cheat.
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Re: Politics!

Postby oddtail » Mon Dec 30, 2013 6:37 am

Lia S wrote:One could make a law that requires that companies buy only from suppliers that pay their employees as much as American employees would be paid.


This, in essence, results in not buying from suppliers from poor(er) countries than the country that enacts the law.

Practicality aside, that could harm the poorer countries in the long run to a crippling extent. A lot of countries rely heavily on the export of cheap goods and services (in fact, food and mined products ARE the main assets of many/most developing countries). A healthy economic situation of a country is usually tied to high exports, low imports. If the US enacted a law like you're describing, a VAST majority of the countries in the world would be unable to export to the US. Because employers in those countries could NOT afford to pay people as much as it is possible in the US. I refer you to my previous statement about how much I earn. My employer seriously could not afford to pay me three times as much as he does now for the kind of work that I do. And I actually work in an offshoot of an American corporation. And note that Poland is not really a poor country in the global scheme of things, so the potential issue is much more strongly pronounced for many African, Asian or even Eastern European countries.

This, in essence, means that all countries would only produce their goods internally (because no country would import goods from countries where people get paid MORE for their work... obviously). I do not think this is feasible - in fact, poorer countries would probably be much LESS self-sufficient than countries like US, Canada or Germany.

And lastly - what's the incentive for a company to export to the US (or anywhere, in the scenario where most rich countries enact such laws), if it means paying their workers more than before? Let's say I am a manufacturer of, dunno, clothes in Poland. I can pay a reasonable wage (for the Polish market) to my employees and sell my product internally. I may not sell much, true. But I definitely will not make a profit if I have to raise all wages by 200%, because I'm arbitrarily required to do so. It doesn't matter how much I sell in the American market. And that's not accounting for the fact that transporting goods internationally requires money, thus increasing costs further (so even if both wages AND costs of living were the exact same throughout the world, which is completely unrealistic, export would still not be profitable - and therefore countries that rely on export would still be screwed over...).
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Re: Politics!

Postby Lia S » Mon Dec 30, 2013 8:26 am

To be clear, I wrote the obvious response to the loophole Pink Freud described, for the purpose of explaining why that would be even worse.
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Re: Politics!

Postby oddtail » Mon Dec 30, 2013 8:56 am

Lia S wrote:To be clear, I wrote the obvious response to the loophole Pink Freud described, for the purpose of explaining why that would be even worse.


Ah, OK. I didn't catch your meaning. Sorry =)
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Re: Politics!

Postby Valerie » Mon Dec 30, 2013 1:50 pm

Aw man. You all made good points. D:

Why is being a hippy so impractical? ;_;
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Re: Politics!

Postby Lia S » Mon Dec 30, 2013 2:19 pm

You can still buy things that are labeled as having been produced ethically, and ask others to do the same. Some of the time those labels will be as truthful as the “made in America” clothing that’s imported from elsewhere, but the companies that use them want to protect their reputations and have enough power to do so within reason. It’s difficult to figure out which marks mean something, which are given to any company willing to pay a little, and which are complete fantasy, though.
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Re: Politics!

Postby mikbuster » Mon Dec 30, 2013 7:53 pm

Or you could start your own farm and make your own clothes, grow your own food, etc. :wink:
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Re: Politics!

Postby Valerie » Tue Dec 31, 2013 12:37 am

I try to buy fair trade/local/etc. when I can, and I try to make my own stuff when I can... I have a bunch of bows for presents that I made out of chip bags and catalogs. :D BEHOLD THE MIGHTY ARTIST, IN ALL HER GLORY.
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Re: Politics!

Postby mindstalk » Sat Jan 25, 2014 11:57 pm

The flipside of terrible working conditions and wages in some countries *is*, currently, that people who are relatively better off (by virtue of living in a Western country) have a much easier life. A person from the US, *especially* a person who earns very little by American standards, buys cheap goods because they are produced for a cost that just couldn't be achieved in the US. This is the direct result of how global economy works, and even if it *was* possible to remove one part of this equation (and it isn't), it'd just make pretty much every economy collapse in a chain reaction. And when I say "cheap goods" I mean things like "being able to afford decent food and reliable clothes on a fairly regular basis", not "being able to buy a smartphone".


Actually, as far as I've been able to tell this isn't true. That is, yes our goods are cheaper, but it doesn't seem to be a big deal to the consumer. I don't know anything about the iPhone chain, but in Lowell MA a museum had a few breakdowns of clothing costs. USA-made union-labor jeans had labor as 20% of the retail price. Other clothes were more like 3-10%. The one made with organic cotton doubled the price of materials, which still made little different to the price. (Well, the final price was high, but probably because of markup.)

$20 organic shirt: $9 retail component, material $4, labor $1
$10 conventional shirt: $4 retail, material $2, labor $1. No, I don't remember what the missing component is. Transport? Management?
Jeans, $4 out of $150 was labor. $65 was management. Supposedly more human jeans, I think.
US union shirt was $60, $11 labor.


_The American Way of Eating_ is by a white American woman who worked in the California fields for a while, along with the (much more experienced) Mexicans. Good book. Some numbers: field workers were paid $2 for 10 boxes of grapes; in the store one box is likely $2, or maybe $4. So 5-10%. Elsewhere, $2 for a 20 pound flat of grapes worth $40-80 retail. 16% of the cost of an apple is the cost of growing it and that's going to the farmer, the migrant workers are a fraction of that. Organic broccoli, strawberries, or tomatoes need 2-3x the labor of conventional ones. 6% of the supermarket price of apples or lettuce goes to farmwork. $22 for picking a half ton of peaches, with the crew making about minimum wage at 4.5 cents/kg; at $1/pound retail that'd be $1000 for the half ton.

Workers weren't being paid trivial amounts, actually. Not enough to get me out in the field, but they were commonly making at least half of minimum wage. $4-5/hour for garlic. Grapes $60/9 hours, almost $7/hour. Crappy working conditions (getting sprayed, heat, RSI) might be bigger problems.


Mining? Iron ore is about $130/ton. Crappy carbon steel is under $1000/ton. A ton of car is $20,000. Whatever the labor cost of mining is, it could go up a lot without making much difference to the car price, or even to steel exercise weights.
A set of tires might be $700, and $144 for the rubber itself.


So for multiple goods it seems that doubling the cost of primary labor might add like 5% to retail prices. Produce labor probably wouldn't need to more than double or triple to be decent. Clothing or overseas extraction might need more, but if cheap labor is 5 cents of a retail dollar and you dectuple that, that brings the retail price to $1.45 Steeper, but that doesn't mean our cost of living goes up by half: most of my cost of living is rent, itself dominated by Boston land values, and food, which as mentioned won't be as affected even in produce. For a lot of you, car and gasoline is probably the next biggest component, and/or medical costs. Of course, some of you spend a lot more on clothing than I do, but it wouldn't be the end of the world if you had to be more frugal in that, or rely more on more machinery-friendly clothing.


So no, near as I can tell our rich standard of living *doesn't* depend on cheap labor. For the average consumer the difference is marginal. Outsourcing is driven by competition to find the lowest possible price, to provide a low store price and/or maximize profits. Big businesses will chase fractions of a cent in quest of that.

mikbuster wrote:Or you could start your own farm and make your own clothes, grow your own food, etc. :wink:


But then you'd be really poor. Specialization and trade are awesome. Trade is like a magical machine that turns sheep into cars and oranges.
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Re: Politics!

Postby Valerie » Wed Jan 29, 2014 4:06 pm

During the State of the Union, Obama mentioned a new type of IRA they'll be starting soon called a My RA. Anyone have any thoughts on this? It looks like it's going to be like a Roth IRA (taxed before the money goes in, not taxed when it comes out) that you can do through paychecks. Seems like a pretty neat idea, easy for workers to manage.
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Re: Politics!

Postby mindstalk » Wed Jan 29, 2014 6:16 pm

http://money.cnn.com/2014/01/29/retirem ... -accounts/

===
But unlike traditional Roth IRAs, the accounts will solely invest in government savings bonds. They will also be backed by the U.S. government, meaning that savers can never lose their principal investment.

Another plus: while private retirement accounts of any size can come with a host of administrative expenses, the myRAs will be free of any fees.

Once a participant's account balance hits $15,000, or the account has been open for 30 years, she will have to roll it over to a private sector Roth IRA, where the money can continue to grow tax-free. Workers will have the option to switch to a Roth IRA at any time.

The White House said the accounts will earn the same rate as the Thrift Savings Plan's Government Securities Investment Fund that it offers to federal workers. That fund earned around 1.5 % in 2012, and had an average annual return of 3.6% between 2003 and 2012.

Obama's annual budget will again include a separate proposal to automatically enroll workers in IRA accounts, a long-touted plan which would require Congressional approval.
===

So basically seems like a training wheels Roth IRA. Zero risk, zero fees, low return. Not like it's hard to set up a Roth IRA right now, but maybe if you could save only $25 a month it wouldn't have been worth the bother? I dunno. There's nothing specifically *wrong* with the proposal, it just seems underwhelming for a SOTU proposal. Minor tweak, nothing radical.
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Re: Politics!

Postby thebitterfig » Wed Jan 29, 2014 6:34 pm

The notes of this paradoxalist do not end here, however. He could not refrain from going on with them, but it seems to us that we may stop here. - Fyodor Dostoevsky, Notes from Underground (trans. C. Garnett)
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Re: Politics!

Postby Valerie » Thu Jan 30, 2014 10:34 pm

A FB friend of mine started this petition to make affordable Braille books more accessible to blind people in the US. Sign please, if you're in the US, 'cause I love you so much?

(I love you, too, non-USers, but I don't think you can sign anyway.)
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Re: Politics!

Postby mikbuster » Thu Jan 30, 2014 10:46 pm

Fine. Just for you I'll go to all the hassle of signing this petition.
I'll expect the usual payment :P
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