Re: Economic reform policy: Some views and proposals

[Clifford Poirot <cpoirot@xxxxxxxxxxx>]

I am curious what alternatives to sweatshops people propose. Is the
alternative a "sweatshop" vs. no job, or sweatshops vs. some regulated
alternative? How would this be put into practice in a place like China?

-----Original Message-----
From: Henry C.K. Liu [mailto:hliu@xxxxxxxxxxxxxx]
Sent: Thursday, May 01, 2003 12:36 PM
To: pkt@xxxxxxxxxxxxxxxx
Subject: Re: Economic reform policy: Some views and proposals




William F Hummel wrote:> Also I wouldn't be so hard on low-tech "sweat
shops" in nations
> where the average wage is lower than what so-called sweat shops
> offer.  The US had sweat shops and child labor in large numbers
> in the late 19th and early 20th century.  For those in high wage
> nations, it is easy to forget that the move toward higher wages
> and living standards is necessarily evolutionary.  There are many
> examples -- Hongkong, Korea, Taiwan, Malaysia -- where this
> evolution has dramatically changed the economic landscape.  Note
> how much faster their GDP growths rate have been compared to the
> current leading industrial nations.  But it takes time.
>

Since 1997, wages in most of Asia have bern falling as in most of the
Southern Hemisphere.  In Indonesia, wages have fallen 60%.

Also sweatshop manufacturing has been going on for six decades in the
Third World, and in China for 25 years.  That's quite time enough.

As for GDP, it can turn declining economies into statistic boom towns
because it neglects factor income.  China receive $50 billion in FDI
last year which finances about 70% of its exports, and records a trade
surplus of over $100 billion.  That means China received a mere $30
billion for its low wage labor, environmental abuse, not to mention that
the SARS virus began in one of these sweatshop villages.

Henry C.K. Liu