BIZCHINA> Review & Analysis
|
BIZCHINA> Review & Analysis
|
|
Related
Look who's shedding tears for low-paid labor
(China Daily)
Updated: 2008-06-09 18:03 Needless to say developing countries know the importance of raising people's income and opening up their markets just as well as their rich counterparts do. From Karl Marx (1818-83) to John Keynes (1883-1946), classical economists warned a long time ago that surplus productivity brought by excessive investment and competition will lead to economic crises if the market is left to grow freely. This means increasing domestic demand, raising workers' income and expanding domestic market not only reflect social justice but is necessary for balanced economic development as well. All governments are duty-bound to keep things right. However, developing countries largely depend on export to maintain economic growth under the condition of globalization, which makes it very hard for them to greatly improve labor welfare without consulting the investors, because they do not have the key to developed countries' markets, meaning they do not have the real power to call the shots. A ready example can be found in the familiar story of the Barbie Doll. A Barbie doll sells for up to $9.9 in the United States, whereas the Chinese toy factory making these shapely figures in the Pearl River Delta region of South China earns just $0.35 for each Barbie it ships to America. The rest of the $9.9 goes to the wholesale and retail businesses and owner of the brand. This in a way shows enterprises in developing countries must create their own brands with their own efforts if they want to make more profits and create more room for pay raise for their employees. Even without such development, the income of the working population and social welfare in developing nations will increase with their economic growth. Take China, for example. The newly-implemented Labor Contract Law provides statutory protection for the workforce, while the minimum wage and minimum income have been raised. As the Chinese currency renminbi continues to appreciate against the US dollar, the prices of exports from China are going up, which inevitably drive retail prices up in the developed nations that import them. This and the rising bulk prices of such commodities as oil and grain on the international market in turn offer some people in developed countries the opportunity to bad-mouth developing countries like China with accusations of exporting inflation. People need to bear in mind that globalization, while driving the world economic growth and pumping enormous profits into developed countries, follows the law of decreasing benefits. Developed countries must not assume that developing nations will churn out cheap products forever, because the prices of export goods from developing countries will go up when the cost of production is raised by higher pay for the workers. By the same token, developed countries cannot expect developing nations to buy a lot of the expensive high-tech stuff they produce if the latter's average income is deliberately kept low. The same goes for achieving win-win results in the global economy. If the proponents of forcing developing countries to improve labor income and work conditions only want to use the issue for their own political gains or as a disguise for trade protectionism, they will have to take the blame for sending world economy into recession, including in their own countries'. (For more biz stories, please visit Industries)
|
