This article by Michael Strong in Ideas In Action is dated August 22, 2006. Still, it provides an example of the blindness attributed to one-factor labor worker economic thinking.
Between 1990 and 2002 more than 174 million people escaped poverty in China, about 1.2 million per month.[1] With an estimated $23 billion in Chinese exports in 2005 (out of a total of $713 billion in manufacturing exports),[2] Wal-Mart might well be single-handedly responsible for bringing about 38,000 people out of poverty in China each month, about 460,000 per year.
There are estimates that 70 percent of Wal-Mart’s products are made in China.[3] One writer vividly suggests that “One way to think of Wal-Mart is as a vast pipeline that gives non-U.S. companies direct access to the American market.” [4] Even without considering the $263 billion in consumer savings that Wal-Mart provides for low-income Americans, or the millions lifted out of poverty by Wal-Mart in other developing nations, it is unlikely that there is any single organization on the planet that alleviates poverty so effectively for so many people.[5] Moreover, insofar as China’s rapid manufacturing growth has been associated with a decline in its status as a global arms dealer, Wal-Mart has also done more than its share in contributing to global peace.[6]
How can this be, given the vast and growing literature documenting Wal-Mart’s faults? We have seen workers in the factories of Wal-Mart’s suppliers complain on tape about being forced to work long hours under terrible conditions. Certainly no one should be forced at any workplace. And yet even articles documenting Wal-Mart’s faults often mention other facts that ought to be considered before coming to too quick a judgment concerning the overall impact of the corporation. In a Washington Post story titled “Chinese Workers Pay for Wal-Mart’s Low Prices,” documenting abuses of workers at Wal-Mart suppliers in China, the authors point out that:
“China is the most populous country, with 1.3 billion people, most still poor enough to willingly move hundreds of miles from home for jobs that would be shunned by anyone with better prospects.”
If we care about alleviating global poverty we need to take this fact seriously. Without Wal-Mart, about half a million of these people each year would be stuck in rural poverty that is, for most of them, far worse than sweatshop labor.
D. Gale Johnson, an economist who studied regional inequality within China, described the enormous disparity between urban and rural workers as “the great injustice.”[7] Urban workers earn about 2.5 times as much as rural workers.[8] Even after counting the higher cost of living in urban areas, urban workers make about twice as much.[9] Not surprisingly, massive numbers of people are moving to the city to work in factories. In 1990, 71 percent of China’s labor force was in agriculture, whereas by 2000 that percentage had dropped to 63 percent: this great migration represents roughly 100 million people leaving rural areas to earn, on average, twice as much as they had on the farm.[10]
Unfortunatly we have 20 million who have lost jobs and are now in poverty (and many millions not being accounted for). So how many Corporations are making a profit in all of this at our expense? –– Robert Bell Nice
Sadly, in the U.S., they don’t give the bulk of their workers benefits, and pay below the poverty level, so as part of the employee sign on process, they help them apply for food stamps and medicaid. I would prefer a bit higher prices at Wallmart, and a realistic minimum wage that truly reflected costs, and not have Wal-mart fobbing off the cost of benefits on the tax payer. –– William Tetzlaff
This is an expression of the trap that one-factor labor worker thinking puts those in who do not acknowledge that the productive power of the United States will continue to exponentially diminished human labor. Over the past century there has been an ever-accelerating shift to productive capital––which reflects tectonic shifts in the technologies of production. Wal-mart has not yet fully transitioned because it relies on “slave labor” in China and on “serf labor” in the United States to minimize the costs of producing and delivering products and services.
While there is a call for increasing the minimum wage in the United States, the REAL call should be to broaden private, individual ownership in companies as they expand, empowering their employees to acquire ownership stakes in the company’s future and pay for their acquisition out of the profit dividend earnings that result. This can be accomplished through the financial mechanism known as the Employee Stock Ownership Plan (ESOP) trust (see http://foreconomicjustice.com/11/economic-justice/ and http://www.cesj.org/homestead/creditvehicles/cha-esop.htm.
When the employees are owners, dependent on their income from the company’s bottom line rather than through ordinary labor wages and benefits, the workers’ economic interests are more invested to see that their company succeeds. In this way, each person in the company is empowered as a labor worker and as a capital worker (owner) and inspired to work together as a team to make better operational decisions to serve and maximize value to their customers.
The working man’s or woman’s creed should be Ownership NOW!
http://www.ideasinactiontv.com/tcs_daily/2006/08/forget-the-world-bank-try-wal-mart.html
