Tuesday, April 04, 2006

Chinese factory worker wages getting too high, Goldman Sachs bullish on other countries's sweatshops...

Two years ago, when i was with the National Labor Committee, I saw things that were unbelievable to me. Factory conditions in sweatshops; living conditions for workers that would horrify you; the difference in the maquila between a union factory and a non union factory was so stark.

One of the scariest things, though, was just how quickly free trade eats through economies. Mexican workers were being paid too much, so in the same way factories were ripped wholesale out of the US, the same started happening to Mexico. And the boss, ever mindful of his array of tools to keep workers in line, would spread the racism that has been used to keep working people and slaves at each others throats since day one. Factory supervisors would tell their Mexican or Honduran workers, "if you make trouble, if you form a union, we can get hundreds of Chinese people to do this work for cheaper." The idea that these people, busting their asses for pennies a day, were disposable. The notion that these CEOs were so hung up on profits, that not only would they throw their neighbors under the bus, but they would leave investments of hundreds of thousands of dollars in the form of newly constructed factories empty once wages and benefits got "too high". They'll create a permanent underclass of people, and when they get too expensive, they'll feed on another area.

Well, apparently, this is starting to happen in China, of all places. Or at least, that's what an article in the Judy Miller/Wiretap Hiding/Sudan advertising/Red Sox owning times is reporting:

The shortage of workers is pushing up wages and swelling the ranks of the country's middle class, and it could make Chinese-made products less of a bargain worldwide. International manufacturers are already talking about moving factories to lower-cost countries like Vietnam.


Li & Fung, one of the world's biggest trading companies, said recently that labor shortages and rising manufacturing costs in China were already forcing it to step up its diversification efforts and look for supplies from factories in other parts of Asia.

"I look at China a lot differently than I did three years ago," said Bruce Rockowitz, president of Li & Fung in Hong Kong, citing the rising costs of doing business in China. "China is no longer the lowest-cost producer. There's an evolution going on. People are now going to Vietnam, and India and Bangladesh."


"Many companies are already moving to Wuhan, Chongqing and Hunan," Ms. Hong said, ticking off the names of inland Chinese cities. "But Vietnam and Bangladesh are also benefiting. We're bullish on Vietnam."

The full article here. Sigh. Capitalism going bonkers. Marx and Engels sure are giving Nostradamus a collosal beatdown in the accuracy department, no?


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