Tuesday, December 13, 2005

Robert Reich on Rich-Rich Gap:

CommonDreams, the progressive news feed, offers an interesting article by Robert Reich, the Sec. of Labor under the Clinton Administration, and now a professor at Berkeley. Reich discusses the growing wealth gap in the world economy, a point ignored by the free trade crowd (the pro-and anti-WTO arguments seem to be debates between those who think economic power ought not to be discussed, and those who think it should only be critiqued) but much pondered by those of us with both love for our fellow men and some training in economics. More importantly, he points out some of the causes for the unrest in China may lie in surprising directions (emphasis mine):

Meanwhile, the ranks of production workers have fallen, from about a third of advanced-economy work forces 15 years ago to one quarter. Analysts at Alliance Capital Management in New York, in a study of 20 major economies, found that between 1995 and 2002 more than 22 million factory jobs vanished. The United States wasn't even the biggest loser. America lost about 11 percent of its manufacturing jobs, while Japan lost 16 percent and Brazil lost 20 percent. The biggest surprise: China, which is fast becoming the manufacturing capital of the world, lost 15 percent of its manufacturing jobs.

What's going on? In two words: higher productivity. Factories are becoming more efficient, with new equipment and technology, and in nations like China, market reforms are replacing old state-run plans with modern ones. As a result, even as China produces more manufactured goods than ever before, millions of its factory workers have been laid off.


Freedom Slopes said...

With the number of easily exploitable global labour pools and an increased dispersal of efficient production techniques should we really be surprised that globally wages are being driven down for a large number of workers at the medium to bottom end of the labour chain? Companies can hope skip and jump the globe over exploiting captive labour pools with great benefit to their profit margins as countries try to undercut each other in the search for needed foreign investment. When will things reach a balance? I don't think anytime soon. Ask any European who is being asked to work longer hours for less money and lowered benefits. I am sure he doesn't know either.

Michael Turton said...

I can't see an end either.