Monday, December 1, 2008

Response to Foreign Wage Blog

My regular readers know that wages and the way we are compensated is a platform issue for me. The root of all that is evil and wicked. So when I cam across an article titled, “Why Are Wages Low in Developing Countries?” http://mises.org/story/3218 I couldn’t resist. I have never read more delusional, greedy driven ignorant dribble in my life. This was my response. I was trying to be brief. But that was impossible. It is this kind of backasswards thinking that put us in the sinking boat we are in now.

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Wow, I have no clue what you just said. I even read it 8 times. That is double of how many time I usually read things. I am slow reader with a high comprehension level. But I guess that is what you were talking about. My productivity level is low. If one wants to justify paying me a low wage, they can say, look how slow he is. That is until somebody points out that the results is 90% less dysfunctional products make it to the market. If it was the other way around, then people would seek to say, “yeah, but look how cheep and dysfunctional the product that reaches the market is.” In which case the business you are herofying would justify paying less. This is an old magician’s trick. Ask an audience member for the answer then show them the question it fits. What do you say to the 100,000 mile warrantee with sound quality KIA and Hundi that have flooded the market? They are made with cheap labor at an efficient pace and with many of the same manufacturing statistics.

The author’s assessment that “more sweat shops” are needed in developing countries dizzies me with irrational and inhumane rhetoric. That is the nicest way I could say it. (here on my blog I can say it. He is an asshole. A clueless one at that. Look the fact is that we would round up, prosecute, and perp. march a manufacturer in say Chicago who employed 8 yr old children, worked them 60 hours a week, for $.40 a month, while billowing pollutions into our waterways and national air space. However, we don’t think twice to stampede a poor Wal-Mart security guard to death in order to get our hands on a bicycle made in China under those exact same conditions. This is an unsustainable and narrow sighted thought stream. It is one that will not allow the human race to exist for more then 3 or 4 more generations. Not at least in the capacity as we know it.

The auto industry, being from the “auto belt”, is near and dear to me. What happened was that with out trade restrictions, it was cheaper to build a cheap structure in south America and China that didn’t require the billions of dollars in environmental and human safety regulations that required millions yearly in upkeep. With them went all the supporting manufactures and the jobs they offered. The big 3 would have no problem paying the pensions if they were the only game in town. People would have no problem paying the cost of the Big 3’s prices if they all had good paying jobs themselves. The problem is that the opportunity to go to less regulated markets cost the companies who tried to remain their “national pride” two ways. They couldn’t compete with the labor costs by the wholly foreign companies, and they lost the income that was once in the hands of the local economy.

Put in an analogy. Say you live on the border of Southern California and the thought that you might like a burrito comes into your head. You have two favorites. They are your favorites because they both taste about the same. You know about the one up north because you did a plumbing repair for the owner last year. The border crossing is something you do a couple of times a week and it is no big deal. The only difference is that the restaurant in Mexico will cost you about $.40 for the dinner and a margarita. The one equally north in California will coast you about $10 for the same. So you say, “What the heck, I’ll go to Mexico and even give the guy a $1 tip and make his day.” Then one day you (Jose de fontanero) notice that your northern customer is closing his restaurant. You stop in and ask why? It turns out most people decided to make that trip down south. You just ate yourself out of a job. Take that job and multiply it time a few million, add about 10 layers of bureaucracy, and you get the impact of globalization on the auto industry. The big 3’s failures were not a result of not being able to pay pensions. Sure that is the way it looks now. They are the result of developing a business on the wrong side of the industrial development curve. All of their hard work has ended up benefiting the spoiled hands of the children who feel they deserve it. The truth is that the only thing that kept our tiny towns from being devastated by poverty earlier is that the auto industry as well as the steel industry had to pay decent wages.

The numbers you are making up are not even close. I can tell you stories that have been told by steel industry execs. That talk about the insane productivity and efficiency of Asian labor markets. One of my favorites is about a plant manager who went to see the plants in Japan. A coil came off the mill with a scratch down the side. The guy who caused it stayed after on his own time to polish it out. The next morning he apologized in person to everybody on the line for wasting their time.

What we have are two distinctly separate economies that have been raped and pillaged by people of this caliber of ignorant greed. In reality what counts is not the amount of money brought home from work to help meet basic needs, but how much time is spent away from work while still making those ends meet. If you want to equalize wages, We need to stop viewing them as hard currencies and instead as the result of labor hours. What is fair? What is the average cost of housing, groceries, and wardrobe for a year? How many labor hours does it take in the foreign markets to purchase these same necessities? That is how you judge equality.

4 comments:

Wallace said...

"People in developing countries need more sweatshops rather than fewer."
-Art Carden
Assistant Professor of economics and business at Rhodes College

I'm just sayin....

Lord of Logic said...

Yeah, that was my thoughts too. I wonder what level of education it takes to be a professor’s assistant? I hope that just means he gets to hand out the flyers and books and not conduct discussions.

Scott D said...

Hello again, Lord of Logic. I thought you might be interested in some more facts:

Assistant professer is a teaching position and requires a Ph.D.

"Assistant professor: an introductory level professor. A position generally taken after receiving Ph.D. and/or completing a post doctoral fellowship. After 4-8 years, assistant professors will be either tenured or dismissed from the university."

http://en.wikipedia.org/wiki/Professor

And Rhodes College is a private, Presbyterian college. Again from Wikipedia, which I verified independently as well:

"Rhodes College is a four-year, private, perennial top tier liberal arts college located in Memphis, Tennessee...The acceptance rates to law and business schools are around 95%, and the acceptance rate to medical school is nearly twice the national average."

Lord of Logic said...

lol, Thanks John. So I finally get somebody interested enough to come check out my blog and you tempt me into making a derogatory, unnecessary comment about their education. One of these days I am going to wise up and see you for the bad influence that you are.

Scott, Sorry. I usually insist upon arguing merits and related topics. Unless it is related to comments about a certain unmentionable band. (oh I do get “passionate. See any of the posts on Sarah Palin) So an assistant professor takes a PhD. Most people with PhD’s that I know are professors. Me? I am too much of a wanderlust toe finish anything. I have met many PhD's that were teaching subject matter in fields in which I was already employed. What I know is that a lot of our policy makers are advised by PhD’s and look where we are now.

Me, I barely graduated high school with "plan A" being to find fame and fortune as a rock star. "plan B" was to be a Pirate. Neither ended up working out as planned. However I see pirating is on the rise again. My education in economics came from a father who is the cheapest man alive. Trips to town were measured in "gallons of milk" and any big purchase ($50 or more) was explained in labor hours. An application that still works today. No matter what the average wage is, you can still accurately measure things in labor hours. He also taught me that you can buy 2-ply toilet paper and make it last twice as long. (I still consider this bad economics.) He made really good money. I still haven't seen any of it. So I am a bit skeptical on education alone.

What I do find hard to believe is that a “Professor” who was educating at a Christian based college could so easily argue the merits of “sweat shops”, pure capitalism, and completely disregard the impact on the environment. Let us face it, these are not just “hard places to work”. At the end of the day the people working in them are still just barely surviving. These are dangerous, unhealthy, slave mills where kids as early as 6 years old are forced by their parents to go work instead of getting an education. The people at the top management positions of this supply chain are making 100’s of millions. There is nothing “Christian” about it.

See that reminds me of this joke. The cop is sitting at a corner one day when he see these 2 cars lined up at the stop light. The car behind has a bumper sticker that said "What would Jesus do?" bumper sticker and a fish logo. the light turns green. the front car is a little slow out of the gate, the car in the back lays on its horn, rides its bumper then speeds past it at the first chance. The cop pulls out and give chase. When he pulled the driver over, the cop said, "do you know why i stopped you?" the agitated driver said he didn't. The cop said "I saw the bumper sticker and the fish logo and automatically assumed this was a stolen car."

I want to thank you for stopping by. I get about 10 hits a day here outside my few friends. Most of them are from people who, like me, misspell “partisan” by spelling it “partison”. More want to know about “Obama’s experience”. The rest are interested in my take on Santa Clause. These are all posts form over 6 months ago. Please feel free to comment on anything you read. I will print anything that has substance to it. Meaning, everybody here knows I am a dumbass. I only ask that comments who state that obvious fact, explain their specific reason why.

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