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To: gpowell who wrote (17171)	2/12/2004 8:06:09 AM
From: mcg404	Read Replies (1) \| Respond to of 306849

< absolute advantage...more efficient...operative condition...comparative advantage...specialize...blah, blah, blah> Unassailable logic. Even a economics-challenged member of the unwashed masses like myself experiences a flicker of comprehension when i read this stuff. OK, so i feel a little uncomfortable seeing the messy details of human lives sanitized in such conceptual terms...but sometimes such an exercise allows us a clarity and understanding that is unavoidable absent when we try to deal with real life situations. But in the process of conceptualizing (there had to be a but), we also run the danger of incorporating inaccurate assumptions. And in this case, it's the assumed notion that 'efficiency' is the factor providing the comparative advantage that i question. Hard for anyone to be against efficiency. More stuff, less work...what's not to like? But is that 'most important feed back mechanism which is price' really measuring efficiency? Or is it merely reflecting exploitation of people, natural resources and communities and the offsetting of costs? How is this for efficiency? SAN PEDRO SULA, HONDURAS — When Wal-Mart Stores Inc. demands a lower price for the shirts and shorts it sells by the millions, the consequences are felt in a remote Chinese industrial town, at a port in Bangladesh and here in Honduras, under the corrugated metal roof of the Cosmos clothing factory. Isabel Reyes, who has worked at the plant for 11 years, pushes fabric through her sewing machine 10 hours a day, struggling to meet the latest quota scrawled on a blackboard. She now sews sleeves onto shirts at the rate of 1,200 garments a day. That's two shirts a minute, one sleeve every 15 seconds. "There is always an acceleration," said Reyes, 37, who can't lift a cooking pot or hold her infant daughter without the anti-inflammatory pills she gulps down every few hours. "The goals are always increasing, but the pay stays the same." Reyes, who earns the equivalent of $35 a week, says her bosses blame the long hours and low wages on big U.S. companies and their demands for ever-cheaper merchandise. Wal-Mart, the biggest company of them all, is the Cosmos factory's main customer. Reyes is skeptical. Why, she asked, would a company in the richest country in the world care about a few pennies on a pair of shorts? The answer: Wal-Mart built its empire on bargains. latimes.com I know some have argued that this isn't exploitation but just a matter of 'paying your dues', the price the 3rd world will need to pay to join us in the super-efficient nirvana the economists keep promising us all 'in the long run'. But it smells like exploitation to me.

To: gpowell who wrote (17171)	2/13/2004 4:19:20 AM
From: Amy J	Read Replies (2) \| Respond to of 306849

gpowell, RE: "We can all see the jobs lost to foreign competition, but it should be just as obvious that the number of jobs and choices have expanded through increased resource use efficiency. The evidence is everywhere" Do you have concrete examples? ( This is asked with curiosity.) Different companies have different reasons for offshoring. Some multinationals do it because to win overseas you must move there to build relationships early in order to win the contracts. You also have to do it, to understand the foreign market's technology and customer requirements in order to win an overseas contract. This is not offshoring, but is an opening of a foreign remote site in order to successfully conduct business in a growing foreign country whose market surpasses the USA. But other firms do it because a particular sector is mature and is better suited overseas. This is offshoring. No different than auto assemblies and textiles. And then there are others that do it because Stanford college students (with no experience) wanted $105k out of the gate during challenging economic times. It's impossible to put all the reasons in the same bucket because each corporation has its own reason for offshoring that's specific to their business and market. The reasons are not the same and are wildly different. On another note, after reading the article about the person sewing 1200 shirt sleeves per day, at what future point do you think a global minimum wage can be created to foster a better lifestyle for international workers? (Yes, I already know creating a global minimum wage would create a huge loss of jobs and will increase prostitution and other seedy exploitive businesses, but at some future point the system will be able to tolerate a global min wage, but at what stage?) When do you think it'll be possible to create a global min wage? 15 years? 25 years? or 50 years? Does creating a global min wage first require parity to be achieved, so the risk to the global economy is minimal and not worse than the original problem? What are the dependencies and risks? When does a person know when the system can handle a global min wage without taking the entire system down? Another question: I understand floating currency of a developing country would create spiraling inflation that could spread to the USA and create global economic damage. But does creating a global min wage create a similar issue? I sort of doubt it. What is the risk? I assume it creates higher unemployment and am wondering what else? Regards, Amy J