Wednesday, May 22, 2013

The Inequity of Democracy

Last Friday the Wall Street Journal had an article on their opinion page “The Economics of a $6.75 Shirt.” The writer Rubana Huq is the managing director of the Mohammadi Group, a garment manufacturer and exporter in Bangladesh. His discussion touched on the current wage over there for garment workers of $70 to $80 dollars a month working two hours of overtime a day. He claimed that the labor cost per shirt was about 38 cents and the cost of materials was about $5.75. I tend to think that his cost of materials could be one or two dollars lower, but it reads good.

He went on to describe how the garment worker paid $40 dollars a month for rent and $13 per month per adult for 30 kilograms of rice. It kind of reminds me of when I was in Viet Nam in 1968. The wage scales and rents over there were about the same. I’ve heard a Congressman or two suggest that we need to bring back the clothing manufacturing back to the USA. The only thought that comes to mind is what were they smoking? Fast forward to today, many thousands of people emigrated from Viet Nam to the US. These people have been a real success story. They came from a world deep in poverty.

Over three quarters of the world’s population is working for slave wages, while we in this country are oblivious to the fact. Democracy is a system that allows us to inadvertently take advantage of other less developed countries. When you ask a supplier what is his bottom line on cost for producing a shirt or a cell phone is, his employees don’t even enter the equation. Low prices drive our cell phone and wide screen TV consumption.

What we are looking at is two worlds; those with real income and those living from hand to mouth. The one thing not understood by Americans is the slavery aspect of the third world. Work until you die or starve to death. In this case, having more kids is a retirement plan. The concept works but for all the wrong reasons-- an increase in the population decreases the food available for everyone.

This is where Islam is gaining support. The United States is the “Great Satin” because we benefit greatly from the sweat and toil of people in third world countries and they get little in return. Our government is claiming the recession is over, but if people in the US are consuming less, it affects these third world countries drastically. These are the countries facing substantial wage deflation pressures and possible starvation. People with a job, have no time to protest at these slave labor rates, but if unemployed, why not turn out for a riot and vent some anger?

The world seems to be in turmoil, and everything appears normal in the United States (if you’re a Democrat). The trouble is, a lot of seemingly unrelated items weave together to make us appear to be the cause for poverty in the third world. A cell phone made stateside might range in price from $500 to $1500 and an Ivy League button down shirt might cost upwards of $50. If we produced these items over here, we couldn’t go out to dinner as often as we liked plus the people that were previously building them would be unemployed and most likely starve to death.

Obama wants to give the third world Democracy. It’s kind of like passing out shoes to people with no feet. What they really need is some sort of support system for wages and food. Religious organizations seem to be the best avenue of support, whether they be Islam or Christian. The thing we need to comprehend is the inner rage of these souls in third world countries that can turn on a TV and view the world that they can only see, but not touch.

I propose a solution. Invade Mexico and make it the 51st State. As a state the minimum wage would increase and the people here illegally would now be citizens. And their country under American law would make it a very nice place to want to live. The neat thing about that, we wouldn’t have to wait for Congress to attempt to pass an immigration bill. And from there, statehood for South America.

It sounds ludicrous, but maybe Egypt or Libya might want to become the 51st state. There are definite advantages of statehood, the only problem, I doubt if any of these foreign countries have anyone in their ranks stupid enough to be a Congressman.


Sackerson said...

Good one. It's odd how our governments seem to keen to promote democracy abroad, but not so much at home (look how the UK has avoided a referendum on EU membership).

I suggest the Third World faces not starvation but an unwelcome return to subsistence farming. Which is why the Chinese reportedly save 40% of their incomes.

The game is made more unpredictable by increasing use of robotics. Employment in certain industries may decline in China, without increasing in the USA.

The question is, who will recover best after the crash? Who has the skill base, the factories, the international contracts for rare earths and essential materials, the growing middle class and regional customer base, and the exchange on their side?

Joseph Oppenheim said...

Nonsense. Globalization is elevating the prosperity of the world's poor. Mfg is a higher order skill than agriculture. Just another step eventually up the ladder to eventual middle class. Witness China. Witness Mexico, they are booming as the middle class is growing because mfg now competitive with China because wages rising in China.

Rob in NS said...

It is elevating the prosperity of the poor by throwing the middle class here in developed world under the bus. As long as we can sell our bonds we can paper over problem. At some point however the portion of society who are free loading are going to have to find something productive to do. At least in these parts, I can't see people who are used to waiting for EBT to refill at first of month picking apples or potatoes for farrmers in these parts.

Jim in San Marcos said...

Hi Joseph

Your beginning phrase "Nonsense" implies that you know a hell of a lot more than me, the writer . I consider the comment extremely rude.

In China where they make our cell phones laborers get $200 a month. In Bangladesh, people sewing shirts get $50 per month with no overtime.

You need to wake up, what are these workers going to do with their spare cash, go on vacation?

Of course the question arises, what spare cash?

Joseph Oppenheim said...

Jim, Bangladesh has a rapidly growing economy. Poverty has dropped abt 25% since 1990.

Jim in San Marcos said...

Hi Rob in NS

Welcome back, its been a while.

Your analogy doesn't work for me. They are not going to throw us under the bus, they are going to make us pay to fuel it up. The EBT (electronic benefits transfer) is going to end, but what happens next?

When the government stop spending, the consumer has to man up and pay the bills.

Up where you are, the government may be a little more lenient to the unemployed.

Rob in NS said...


Agreed I like your analogy better.

Things haven't changed much in last 5000 years. I once saw a painting in a book where the citizens of ancient Egypt were hauling blocks to build their Pyramids. I read somewhere that they did this voluntarily. The picture if I recall had a guy with whip but he was there only to keep everyone pulling in sync. I don't see the segment of society who feel they are entitled to their entitlements giving up and pulling like the rest of us. More likely they will be standing behind the guy with the whip.

Getting back to your offer of joining as another state. I propose Nova Scotia. We are a friendly lot here, speak decent English and have McLobster Sandwiches!

Jim in San Marcos said...

Hi Rob

Instead of you joining us, I propose California join you. The only problem I see is, that most people here would take a dim view of lobster in their burrito.

The McLobster sandwich makes my mouth drool with envy.

Jim in San Marcos said...

Hi Joseph

You could be right, but I wonder what happens to these workers when consumption on our side of the pond decreases? These people don't have the option of plowing some land and growing crops if they get laid off.

The frustration and anger level are starting to surface in some of these countries. IMHO it will get worse before it gets better.

dearieme said...

I realise that you feel strongly but I dislike extravagant talk of slavery, slave wages, and so on.

What language can you then use for people who really are held in slavery?

Jim in San Marcos said...

Hi dearieme

I'm not sure. Slavery has become a very nebulous term. You don't need chains to be a slave. And at the same time no court recognizes a slave as legal property. But non the less, it does exist world wide.

Economic conditions can force people into accepting jobs that appear to be slave like conditions to the average man. For a guy like me, working 10-16 hours a day 6 days a week for $40-80 a month making clothing kind of sucks.

There is no real definition of the work hours or the hourly rate to be paid for slave laborer. But you have to assume that the "owner" wants a productive slave which implies some form of entitlements.

With the garment workers in Bangladesh, there is no guarantee that the monthly paycheck will even cover their needs.

Over here we worry about our retirement plans and our 401K's. For them they worry about losing their job and not finding another and of growing old with no savings. We have set them up to fail, because we want to be able to buy a shirt for $10.

A real slave has an owner. The people of Bangladesh have no owner. Since they are not slaves, they have every right to starve to death and die. Nobody is responsible for their present plight--or did we take unfair advantage of them?

When it comes right down to it, I have no answer for your question. The one thing I can point out with total certainty, is that with 8 billion people in the world, each new mouth takes food away from someone else when talking about third world countries. The concept of "Work harder and your baby gets the food," only goes so far.

If it's of any consequence, I will probably refrain from using "slavery" and "slave wages" in the future, only because they are vague terms lacking real definition.

Just don't hold me too it, my memory is not the greatest ;>)

Take care.

Anon On A Calif Mountain said...

This is a prison planet: ultimately, governments rule and own us and our possessions (we're just "leasing" what we "own"). We're all slaves one way or another. Whether we're steering a plow or the wheel of a BMW.

We're slaves to our bodies as well because we must breath, drink, eat, sleep, bathe, and eliminate. One must have some causality in economics to be able to accomplish all those feats on a stable basis.

If man was sane, and governments were not bent on egocentric and self-motivated control mechanisms and imperialism but instead were visionaries looking into the future with the survival of man as the main concern (The Family of Man) we'd be on a very different planet and would actually have what could be called a civilization. Instead of pouring trillions into war and other waste and destruction, could you imagine billions and billions going into R&D and to all the great minds on this planet with the goal of making our world safe, sustainable and easier on us all. Think about: massive desalinazation units, permaculture, vertical growing, green houses on a massive scale in all countries.

Blue green algae is a complete food. It is 60% protein and contains so many vitamins and minerals. All that is needed to cultivate and grow it is clean, filtered water circulating in a pool. There is not ONE reason on this planet for any child, brother, sister, mother or father to starve. Poverty and scarcity, the result of evil and ignorance, are CREATED conditions.

We should be ashamed of ourselves.

A great philosopher once wrote... "9/10's of life are economic." That pretty much sums it all up. That is our dilemma, and we all need a personal solution to it... all 7 billion of us (and growing).

Anonymous said...

Good thoughts Anon, but I am not eating your blue green algae. The UN also says we can eat bugs and be healthy.. Again, no thanks. The rich must be laughing at us. "Let them eat bugs."

May I offer one more thought : we have a great wonderful universe to explore. Governments priority should be to expand humanity across the planets and stars. If Israel decides to nuke the world, and least humanity might go on, on another planet.

Jim in San Marcos said...

Hi Anon on a California Mountain

When I was writing that comment, the thought went through my mind what would you have to say on this.

I think you've hit the nail on the head, food and water with billions more to feed. Soylent Green was a very good movie if you missed it.

Someone a while back commented that if the Chinese decided to take a bath every day, the world would be out of drinking water real quick. i haven't bothered to do the math to see if there is any truth in it.

Take care

Jim in San Marcos said...

Hi Anon 2:58

I think there are several references in the Bible about getting people to stop eating insects.

I've known people that were such bad cooks, that eating bugs would have been a better alternative;>)

My only criteria for food is "If it doesn't taste good, don't eat it."