Obama wins, saves economy single-handedly while defeating economy-hating Republicans

[Whoha]

Exploiting workers isn't immoral or morally laudable for that matter, no worker is paid exactly and precisely what he is worth to his employer. From this disparity comes a pool of capital that businesses in the past took risks with and invested, which has improved all of our lives. What is immoral is that businesses are now coasting on cheap labor and not investing or taking risks and are instead letting cash pile up.

[Elok]

They are being exploited, IMO, but their employer shouldn't be blamed for it. The employer has to heed market forces to stay in business so they have to offer jobs at something near the market rate.

Oh, I don't really blame them for it as such, I just insist on calling a spade a spade. The morality involved is complex, and it's as much our "fault" for buying the finished goods as it is theirs for the icky labor practices. I could probably dig up some kind of "cruelty-free" manufacturer for any given article of clothing or whatever, but I assume such goods would be considerably more expensive, and getting them would require me to deal with self-righteous hippies of some sort. Besides, I'm lazy.

However, similar practices used to be legal in the western world, and they were eventually made illegal when we came to consider them barbarous. If we heard of twenty-first century Americans working those kinds of hours, in that kind of environment, for that kind of pay, we'd consider it a national disgrace (provided the workers involved were white citizens, and especially if the newspeople managed to find an attractive woman to interview). Maybe it'll improve their economy in the long run, maybe it won't, but I really don't see how the same working conditions are inhumane here and hunky-dory over there.

[Al B. Sure!]

Workers in 3rd world countries are generally better off working in sweatshop conditions than they would be as subsistence farmers. Also, if the history of the West as well as certain Asian countries like Japan, South Korea, and Taiwan are any indication, the introduction of sweatshop factories sets off a capitalistic/industrial revolution with urbanization, increased capital, increased infrastructural development, etc. that will, in the long term, increase the standard of living of the people in these countries.

However, the workers are being exploited in the sense that their labor is not being compensated as it would be in other countries, such as the United States, and that their compensation is not commensurate with the profits made by their employers. It's win-win for everybody but the companies are doing a lot better, and one could argue disproportionately (whatever that means) better, than the workers.

Also, just because they would be worse off as subsistence farmers, does that make it ethical to treat them roughly by Western standards? Just because something is not as bad as the alternative does not make it right or ideal. Too much labor reform, however, may reduce the attractiveness of companies being in these labor markets, which would have a negative effect on these countries.

[Aeson]

First, "exploit" and "exploited" can be ethically or morally neutral terms. There is no doubt that "exploitation" occurs all throughout economies using that definition.

But using the ethical or moral sense of the terms... I think there are clear cases where any reasonable individual will agree that third world workers are and/or have been exploited. The most extreme of these cases are human trafficking/slavery. There is a gradient from there, to paying a "good" wage... better than necessary... compared to the rest of the market. At some point everyone will have their preference as to when it stops being "exploitation" and starts being simply "business".

In any case, I think we can treat 3rd world workers much better than we do ("we" as the collective "developed world"), and that it would be in our ("our" as the collective "developed world") best interests to do so. Having ~ half of the world population poor and uneducated is a lot of missed opportunities, and a lot of unnecessary risk to our safety. I do however see how it's (reasonably) not in any individual business' best interests to take the first step. I'm up to taking on unreasonable tasks though, win or lose. I can't have any real sense of accomplishment just being herded around on easy mode anyways...

So... imma in ur 3rd werld marketz, pwnin ur cheap labor... or something to that effect... poorly funded and without reloading... max difficulty

[Aeson]

And I don't agree with the assertion that sweatshop labor (and pay) is necessarily better for any individual worker than subsistence farming (and harvest). (Though it likely is better for the economy overall, but that isn't sure either.) In some sweatshop labor definitely is a better option for the individual... the extreme example being where subsistence farming is no longer even possible due to overcrowding. In other cases subsistence farming can provide a better life than someone working in a sweatshop can expect. Depends on the amount and quality of land used, the pay in the sweatshop, and various other things like the (highly subjective) valuation of clean air and water, having spare time, and working for yourself.

[Hauldren Collider]

They are being exploited, IMO, but their employer shouldn't be blamed for it. The employer has to heed market forces to stay in business so they have to offer jobs at something near the market rate.

They're not being exploited. Here's why:

Since we are assuming there is no coercion involved (i.e. workers are free to leave the company whenever they like), the workers must be picking the highest paying job available to them, which is a function of how skilled they are. Conversely, the companies are hiring the workers willing to take the lowest pay with the required amount of skill. This is all determined by supply and demand of both the labor and of the goods being produced.

If the company were to start paying its workers more, it would be forced to raise prices. The argument that it could pull from its "corporate profits" is wrong because those profits either get paid out as dividends or get reinvested in the company, and greater dividends means more investors. More investment means the company can expand and hire even more workers.

What this means is that if the company chooses to pay its workers more, two things will happen: They will end up getting workers that are more skilled than they need, which is a waste of human resources as they could be performing more productive tasks. The second thing that will happen is that either the price goes up, the company loses sales and can't hire as many workers or that corporate income takes a hit and the company can't expand which means that they won't be able to hire as many workers. Either way, you have both reduced overall productivity of the workforce and reduced employment.

The final argument is that consumers should be willing to pay higher prices. While this is not only absurdly wishful thinking, it is also equivalent to the company just raising the price. If you raise the price, people can't buy as much stuff from the company. Now we could get into price sensitivity and stuff like that but the equilibrium still changes and price, supply, and demand all shift towards equilibrium.

IN SHORT, higher wages = fewer people getting employed and human resources getting wasted. Long term effect: People are poorer.

NOTE: We are assuming there is no coercion involved. Workers are free to leave the company whenever they like. If this were not the case, it would be indentured servitude or slavery and that obviously immediately qualifies as exploitation.

[Aeson]

Emigration restrictions are coercion on the labor market.

[Hauldren Collider]

Here's an excerpt from my mandatory summer reading on globalization:

Over the years, I have visited garment factories all over the developing world. I have grown familiar with the cavernous halls where hundreds of young women sit at sewing machines, and men at cutting tables, where the fabrics move along production lines and the familiar labels of GAP, Polo, Yves Saint Laurent, Wal-Mart, J. C. Penney, and others are attached as the clothing reaches the final stages of production. There is nothing glamorous about this work. The women often walk two hours each morning in long quiet files to get to work. Arriving at seven or seven-thirty, they may be in their seats for most of the following twelve hours. They work with almost no break at all or perhaps a very short lunch break, with little chance to go to the lavatory. Leering bosses lean over them, posing a threat of sexual harassment. After a long, difficult, tedious day, the young women trudge back home, when they are again sometimes threatened with physical assault.

These sweatshop jobs are the targets of public protest in developed countries; those protests have helped to improve the safety and quality of working conditions. The rich-world protesters, however, should support increased numbers of such jobs, albeit under safer working conditions, by protesting the trade protectionism in their own countries that keeps out garment exports from countries such as Bangladesh. These young women already have a foothold in the modern economy that is a critical, measurable step up from the villages of Malawi (and more relevant for the women, a step up from the villages of Bangladesh where most of them were born).
...
On one visit to Bangladesh, I picked up an English-language morning newspaper, where I found an extensive insert of interviews with young women working in the garment sector. These stories were poignant, fascinating and eye-opening. One by one, they recounted the arduous hours, the lack of labor rights, and the harassment. What was most striking and unexpected about the stories was the repeated affirmation that this work was the greatest opportunity that these women could ever have imagined, and that their employment had changed their lives for the better.

Nearly all the women interviewed had grown up in the countryside, extraordinarily poor, illiterate and unschooled, and vulnerable to chronic hunger and hardship in a domineering, patriarchal society. Had they stayed in the villages, they would have been forced into marriage arranged by their fathers, and by 17 or 18, forced to conceive a child. Their trek to the cities to take jobs has given these young women a chance for personal liberation of unprecedented dimension and opportunity.

from:
The End of Poverty
Jeffrey D. Sachs

[Al B. Sure!]

They're not being exploited. Here's why:

Since we are assuming there is no coercion involved (i.e. workers are free to leave the company whenever they like), the workers must be picking the highest paying job available to them, which is a function of how skilled they are. Conversely, the companies are hiring the workers willing to take the lowest pay with the required amount of skill. This is all determined by supply and demand of both the labor and of the goods being produced.

If the company were to start paying its workers more, it would be forced to raise prices. The argument that it could pull from its "corporate profits" is wrong because those profits either get paid out as dividends or get reinvested in the company, and greater dividends means more investors. More investment means the company can expand and hire even more workers.

What this means is that if the company chooses to pay its workers more, two things will happen: They will end up getting workers that are more skilled than they need, which is a waste of human resources as they could be performing more productive tasks. The second thing that will happen is that either the price goes up, the company loses sales and can't hire as many workers or that corporate income takes a hit and the company can't expand which means that they won't be able to hire as many workers. Either way, you have both reduced overall productivity of the workforce and reduced employment.

The final argument is that consumers should be willing to pay higher prices. While this is not only absurdly wishful thinking, it is also equivalent to the company just raising the price. If you raise the price, people can't buy as much stuff from the company. Now we could get into price sensitivity and stuff like that but the equilibrium still changes and price, supply, and demand all shift towards equilibrium.

IN SHORT, higher wages = fewer people getting employed and human resources getting wasted. Long term effect: People are poorer.

NOTE: We are assuming there is no coercion involved. Workers are free to leave the company whenever they like. If this were not the case, it would be indentured servitude or slavery and that obviously immediately qualifies as exploitation.

HC, most of the argument with regards to exploitation does not come from economics but from an arbitrarily Western idea of social justice. While I'm sure the majority of those who feel these workers are being exploited did not think of what you posted, your response still wouldn't assuage their concerns. This is just a case of different value systems and ideas about ends justifying the means.

[Al B. Sure!]

Jeffrey D. Sachs

Isn't Sachs all about foreign aide being the means to 'break' his 'poverty trap' and perhaps resulting in keeping the 3rd World mired in aide-dependency?

[Hauldren Collider]

We live in a world of limited resources. By trying to help those people more, you are refusing to help other people entirely, and in the long term making everyone poorer.

They say the road to hell is paved with good intentions. I don't believe in an afterlife, but this half-baked "solution" actually adds to the problem. It makes things worse.

[giblets]

They're not being exploited. Here's why:

Since we are assuming there is no coercion involved (i.e. workers are free to leave the company whenever they like), the workers must be picking the highest paying job available to them, which is a function of how skilled they are. Conversely, the companies are hiring the workers willing to take the lowest pay with the required amount of skill. This is all determined by supply and demand of both the labor and of the goods being produced.

They live in a world that has neglected to give them the same opportunities other people have, therefore they can either accept terrible working conditions with terrible pay or else they'll starve or be absolutely destitute. That sounds like exploitation to me.

[Hauldren Collider]

They live in a world that has neglected to give them the same opportunities other people have, therefore they can either accept terrible working conditions with terrible pay or else they'll starve or be absolutely destitute. That sounds like exploitation to me.

*facepalm*

What I just explained was that the third option, paying them more, makes things worse.

We live in a world with limited resources.

It seems the implications of this have to be spelled out: This means that if you allocate resources somewhere, you are then unable to allocate resources somewhere else. To give something to someone you have to take it away from someone.

[Hauldren Collider]

Here's another thing that happens when you require companies to give workers higher pay: They will move operations (or at least expand operations) to countries whose workers are more valuable. These workers are able to get better jobs anyway. You're cutting off the less skilled people from jobs entirely by essentially setting a minimum skill level for employment.

If you require that workers in India get paid US wages, companies will just operate in the USA because US workers are more valuable than Indian workers, WHICH IS WHY THEY GET PAID MORE. So now we're making it so uneducated people can't find work, production plummets, and everyone is poorer. BRILLIANT!

The best way to improve these worker's lives is to get rid of our ridiculous system of subsidies and tariffs. Farm subsidies make foreign farmers unable to compete with US prices, for example. And tariffs/taxes on companies that move jobs overseas***** mean that these poorer countries can't get jobs and it raises prices for US customers too! All so we can support self-centered union workers who insist that people who buy non-American goods are just being greedy. What the ****.

*SOUND FAMILIAR? THANK YOU OBAMA!

[giblets]

Well yeah, if resources weren't limited there would be no reason to exploit people.

I've already recognized that companies are not responsible for the terrible situation some people are in and can't do much about it. I'm not sure why you continue to rant about how companies can't pay them more when no one here is suggesting that individual companies should be expected to.