Should developed nations refuse to take exports from LDCs that have weak labour laws?

[Zkribbler]

Instead of an absolute ban or boycott--which could lead to smuggling--I think a better remedy would be to deny them Most-Favored-Nation status or to otherwise put them at a severe trading advantage.

Shi --- Your analysis overlooks a third option, the slave-driving owners who are suddenly looking at sales of $0 concluding that they'd better start paying their workers a decent wage.

This is by far the best way to turn foreign peons into a vibrant middle class with enough disposable income to buy American goods.

[Vandal-1]

No don't take the jobs!!! but by incriments place duties at a % drectly proportioinate to the need for corporate re investment in the manufacturing country acting like a penalty for sweatshop entrepenuers.leave them in a position to profit but make it more profiable to re invest.

[Shi Huangdi]

Zkribbler: First off, if they are going to be paying decent wages anyway, then there is less incentive to produce things in the underdeveloped countries like they are now. They may move operations to areas with more skilled work and more capital.

Furthermore, by increasing the cost of labor, it's basic economic that less labor will be demanded. These third world countries are experiencing extreme population growth, more than is reasonably sustainable- I think at current rates Vietnam for instance is going to outpace Russia in terms of population. In order to have jobs for the population so people aren't starving, the cost of labor will have to be kept down.

[Zkribbler]

Au contraire, the cost of labor must be kept high in order to create a consumer class in order to increase the demand for goods. The current neo-feudal system which we see in so many third-world countries only perpetuates misery.

Right now, Belgium buys more stuff from the U.S. than does China. Why? Belgium has a bigger middle class.

[Kidlicious]

Zkribbler is right. The biggest constraint to global economic growth is lack of demand and over supply. Unfortunately greed is a permanent component of capitalism. Greed will continue to lead to supply-side policies. It works like this

[Al B. Sure!]

I read an article in the Economist a few years back that argued that refusing exports may cause more harm than good -- rather than having foreign workers get 15 cents a day (or whatever they get), they'll get 0 cents a day. It also argued that the purpose to creating a minimum wage was to develop a middle class, but that this is only effective in moderately developed economies -- the first priority is to expand the economy enough to be able to support a middle class, not to create a middle class and just hope that the economy responds appropriately.

:thumbsup:


but there is also the problem in many countries of over-education. Many latin american countries produce plenty of college educated people but there are no jobs for their skills as all the jobs are sweat-shop style. how can this problem be fixed?

[Kidlicious]

Originally posted by Albert Speer


:thumbsup:


but there is also the problem in many countries of over-education. Many latin american countries produce plenty of college educated people but there are no jobs for their skills as all the jobs are sweat-shop style. how can this problem be fixed?

The biggest lie is that if we just train everyone to program computers that everyone would make 100K a year. Sorry, too bad it's not that easy.

[Urban Ranger]

Originally posted by Shi Huangdi
Right. So you want to take away the choice of low pay and poor conditions, leaving them with essentially starvation? Nice.

You forgot that this happens because of the WB or the IMF forcing these countries to open their markets as conditions for loans. The consequence of this is the food market becomes dominated by cheap foreign imports, driving the farmers out of businesses. Ironically, when the local food market collapes, the government is forced to pay for imported food with the loans, thus impoverishing a large group of people without being able to improve the country's infrastructure.

[Shi Huangdi]

"Au contraire, the cost of labor must be kept high in order to create a consumer class in order to increase the demand for goods."

First off, demand can be generated for these countries from overseas, and it is as it is often US companies. Domestic Demand can only increase if more money is brought into their countries overall, which will be less likely to happen if the incentives to invest in those countries increase. Moreover, even if wage rates did sucsesfully increase for some people in those countries creating a demand for consumer goods, that demand could likely end up being filled by industrialized nations rather than domestically. Furthermore, many families in LDCs rely on child labor to survive, and children ususally do not make skilled laborers, rather they are suited towards unskilled labor. Deprived of income from child labor, some families will be even more seriously impoverished.

IMHO what needs to happen here the birth rate in these countries needs to be reigned in. I know some parents will still continue to have large families, but it'd still help to get the birth rate down in the third world from it's very high level. If the population growth rate could decrease, there would be less need for an ever increasing supply of sweatshop jobs, and less massive families which can only be sustained through child labor. Not having as large a population will naturally increase labor's bargaining position. To this end the best thing we can do is to help provide the local populations with birth control.

"You forgot that this happens because of the WB or the IMF forcing these countries to open their markets as conditions for loans."

Neither of those institutions can force a soverign nation to do anything, any assistance by them is voluntary. It is their own fault if they enter into bad deals.

[Kidlicious]

Originally posted by Shi Huangdi
Domestic Demand can only increase if more money is brought into their countries overall, which will be less likely to happen if the incentives to invest in those countries increase.

We could all work for free. How would that be? Plenty of incentive for Nike to make more shoes. Think it would bring in a new era of prosperity?

[Zkribbler]

Originally posted by Shi Huangdi
First off, demand can be generated for these countries from overseas, and it is as it is often US companies. Domestic Demand can only increase if more money is brought into their countries overall, which will be less likely to happen if the incentives to invest in those countries increase. Moreover, even if wage rates did sucsesfully increase for some people in those countries creating a demand for consumer goods, that demand could likely end up being filled by industrialized nations rather than domestically. Furthermore, many families in LDCs rely on child labor to survive, and children ususally do not make skilled laborers, rather they are suited towards unskilled labor. Deprived of income from child labor, some families will be even more seriously impoverished.

I can't agree that starvation wages and child labor lead to prosperity.

It's not too much to tell these countries that, if they want to sell their goods to the West, they have to comply with verfy minimal standards for pay and agree not to use child or slave labor.

[Lawrence of Arabia]

Some of you guys need to get a clue and take economics.

[Imran Siddiqui]

I can't agree that starvation wages and child labor lead to prosperity.

South Korea? Japan after WW2? Come on, it has happened in the past!

You stop importing these goods and suddenly, MNCs move to other countries... because if they can't pay the low wages to unskilled workers, better to get workers that have greater productivity and are more skilled. The 3rd World totally loses out then.

[Kidlicious]

Originally posted by Imran Siddiqui

I can't agree that starvation wages and child labor lead to prosperity.

South Korea? Japan after WW2? Come on, it has happened in the past!

I picked my nose in 1997 and our economy did well that year. Do the 2 have anything to do with each other?

Originally posted by Imran Siddiqui
You stop importing these goods and suddenly, MNCs move to other countries... because if they can't pay the low wages to unskilled workers, better to get workers that have greater productivity and are more skilled. The 3rd World totally loses out then.

We will always get the goods here, because this is where the demand is. MNCs aren't going to just stop supplying the US because their labor costs are higher.

[Imran Siddiqui]

I picked my nose in 1997 and our economy did well that year. Do the 2 have anything to do with each other?

Sorry, that isn't the same thing at all, and you know it! The 'slave wages' and 'sweatshops' were instrumental in South Korea and Japan's growth. It created a middle class of people, who, when powerful enough (and skilled) were able to create their own businesses and corporations. Take out the sweatshops, and I'm not sure I have a Sony TV.

We will always get the goods here, because this is where the demand is.

What does that have to do with anything? The goods being made somewhere else doesn't mean it's gonna change where it goes.