SE Asian workers strike for justice

SE Asian workers are in revolt against low wages, exploitation and corporate race to the bottom economic development strategies.

First, Chinese workers struck at major transnational corporations like Honda and Foxconn Technology (a major supplier of companies like Apple, Dell and Hewlett-Packard), winning significant wage increases and other improvements.

Now garment workers in Bangladesh, employed by suppliers of WalMart and H & M have risen up, demanding a higher minimum wage and in opposition to attempts to lure garment production to Bangladesh through low wages.

The courage of these workers to stand up for their humanity illustrates what Dr Martin Luther King meant when he said: "The arc of the moral universe is long, But it bends toward justice."

China enacts large stimulus-U.S. needs one!

Sixty-seven thousand (67,000) Chinese factories have closed and tens of thousands of workers have been laid off since the beginning of the year. As a result, the Chinese government announced a $568 billion stimulus program, 7% of GDP, aimed at bolstering its faltering economy.

The United States has lost 1.3 million private sector jobs since January while the ranks of the long-term unemployed have grown at record rates.

Goldman Sachs economists are predicting that the unemployment rate (now 6.5%) will rise to 8.5% by the end of next year and go even higher in early 2010 because "U.S. domestic demand and production are dropping sharply." The cumulative trough-to-peak projected increase of more than 4 percentage points in the jobless rate would be the most since World War II.

Like China, the United States needs a bold stimulus program.

Nobel Prize winning economist, Paul Krugman, is urging U.S. policy makers to think big, suggesting a back-of-the- envelop number of $600 billion. That's a significantly smaller percentage of the U.S. economy than the Chinese plan, but much bigger than the $300 to $400 billion plans currently being discussed in Washington.

Krugman notes that if the stimulus package is larger than needed and the economy overheats, the Fed can easily raise interest rates to head off the threat of inflation. But if the stimulus is too small, there is nothing the Fed can do since interest rates are already at historic lows.

The Bush administration and Congress moved quickly when Wall Street and its highly paid CEOs were teetering on the edge of financial collapse. Now that the middle class is facing a similar catastrophe they are dithering while America is burning.

Krugman's column is linked here.

Does the Yi trade doom Milwaukee?

The Yi Jianlian experiment is over in Milwaukee, just one year in the making.

The seven footer from China, the cornerstone of the Milwaukee Metropolitan Chamber of Commerce's (MMAC) "China policy," has been traded to the New Jersey Nets!

It was only a year ago that MMAC's China Business Council Co-chair, Bob Craft, CEO of a Milwaukee based private equity firm offering residency rights for dollars, said: This is a massive opportunity – people have no clue what will hit us. There is so much work for anyone in this community that has an interest in China. They’re already (Wisconsin’s) third-largest business partner. I don’t know what path it will take, but it will be big.”

John Schmidt, the Milwaukee Journal Sentinel's economics writer was equally effusive:"To a handful of Milwaukee entrepreneurs, Yi's rock-star status back home amounts to a potential gold mine...

Yi's arrival provides a fresh opportunity to make Milwaukee a more globalized city, one that draws international residents, investment and culture. In May, the Department of Homeland Security approved southeastern Wisconsin as a special economic zone that offers coveted U.S. residency rights to qualified foreign investors." I'm going to package the opportunity," said Bob Kraft...."

Amid all of the cheerleading, and growth of business with China, neither the MMAC nor Schmidt ever mentioned that China's sales to the state (imports) were growing much faster than our exports.. The result of this trade imbalance - Wisconsin lost 39,668 jobs, 1.43% of total employment, between 1989 and 2003.

Now that the Bucks have shipped Yi out of town in much the same way that Milwaukee's corporate leaders have shipped thousands of manufacturing jobs to China and other low-wage havens, what will become of the MMAC's China-based development policy?

Are the city's hopes for investment, increased international residents and culture over?

Or was the euphoria over Yi's signing just another example of corporate Milwaukee's promotion of hype over real economic development strategy?

Fear not. The Bucks second round draft choice is the 6-foot-8 forward Luc Richard Mbah a Moute from Yaounde, Cameroon. The 21-year-old Mbah a Moute is a prince. His father is a king! Talk about prestigious international residents!

Maybe Kraft will offer residency to Cameroonian monarchs if they cough up $500,000?

Milwaukee's corporate titans may find the Cameroon an attractive place to invest. Average wages are 45 cents a day, even less than China's. At those wages, Harley won't sell many motorcycles. But then, that's not really what the global labor arbitrage is about.

Milwaukee businesses leaders seem to want a return to the 19th century

Milwaukee businesses leaders seem to want a return to the 19th century

At a recent Public Policy Forum luncheon, some Milwaukee business leaders criticized the city's business climate. Their comments suggest that many corporate leaders remain committed to low wage, low skill economic strategies that have cost Milwaukee thousands of middle class jobs and contributed to the city's growing rates of poverty and inequality ("Business leaders want to warm city's climate," Jan. 11, www.jsonline.com/705904).

Complaining that CEOs don't get the same red carpet treatment in Milwaukee that they get in China, Oilgear boss Richard Armbrust said: "Get on a plane, go to China, and you get picked up in a limousine with lights flashing."

Armbrust's message mirrored the widely publicized comments of former RedPrairie Corp. CEO John Jazwiec, who attacked Wisconsin as "socialist" and suggested that the state flag included a "hammer and sickle" shortly before he resigned after reporting an unsubstantiated home invasion.

The country whose business climate Armbrust finds so appealing is a dictatorship where child and sweatshop labor are rampant, worker health and safety barely an afterthought, independent unions non-existent.

Chinese-made products, from toys to toothpaste to fish, have been found to be tainted with harmful agents. U.S. toy importers are demanding increased government regulations to ensure consumer safety.

As China has become the world's sweatshop, it has also become one of the biggest contributors to global warming. Milwaukee CEOs may get the red carpet treatment when they visit China, but pollution is so bad in many Chinese cities that its people can barely breathe.

Armbrust's desire to return to the 19th century was echoed by Briggs & Stratton CEO John Shiely, who said it was unlikely Briggs would open a new factory in Milwaukee because "we still have problems with the tone in this town. . . . Other places admire wealth creators. They don't beat them up."

So what strategy does Shiely want to be admired for? For almost 25 years Briggs beat up its employees as it pursued a less-than-admirable business model based on high-volume, low-cost production. Many of its foreign competitors pursued a model of low-volume, high-quality production in premium markets. (Full disclosure: My sister was employed by Briggs during most of these years and was an elected union leader).

Briggs even fought clean air regulations, ignoring the potential for green markets. As a result of Briggs' 25-year-war against its employees, which included outsourcing jobs to the South, China and Mexico while pursuing wage and benefit concessions in Milwaukee, thousands of wealth-producing employees lost their jobs.

Briggs' plant on 124th St. is closed, the one on N. 33rd St. abandoned. And these "leaders" wonder why they aren't given red-carpet treatment in Milwaukee? Are they really this tone-deaf?

The city they are bashing has the nation's eighth-highest poverty rate and seventh-highest child poverty rate. One of three kids lives in poverty. More than 45% of African-American males are unemployed.

Before international competition became a serious threat, Milwaukee's corporate elite began moving production in search of low-cost labor and short-term profits. The interests of others, particularly those who devoted their lives and labor to help these businesses prosper, were ignored.

When global competition heated up, Milwaukee's elite chose to compete on cost rather than on quality and service. Milwaukee's deindustrialization and deunionization are a byproduct of these low-road strategies, which stand in contrast to Germany, another mature industrial economy, where manufacturing and workers are flourishing based on high-wage, high-skill production.

As Milwaukee's CEOs abandoned their workers, they promised to help the city and people left behind. For more than 30 years, since the Greater Milwaukee Committee promoted the Performing Arts Center and the Grand Avenue Mall as catalytic urban redevelopment projects, Milwaukee's corporate leaders have promoted downtown development as a panacea.
When the festive marketplace model failed to deliver, they promoted a publicly subsidized convention center. Later, the GMC launched the Initiative for a Competitive Milwaukee, and then Johnson Controls' Metro Markets came along, promising a market approach to urban revitalization. The former created one high-wage job, the six figure consultancy of Harvard professor Michael Porter. The latter little more than a three-part series in the Journal Sentinel.

Since former Gov. Anthony Earl convened the Wisconsin Strategic Development Commission in the early 1980s in response to Kimberly-Clarke CEO Darwin Smith's threats to leave Wisconsin, demands for lower taxes, deregulation, privatization and subsidies have dominated the agenda. The efforts have resulted in increased poverty, unemployment and growing inequality in Milwaukee.

Milwaukee's CEOs shamefully used this luncheon to press their narrow economic agenda of reducing labor and other production costs. They dream of a "red carpet" world where wages are low and grateful chauffeurs cater to their every whim. For Milwaukee's working people, many of whom can barely afford to fill their gas tanks and heat their homes, much less hop on a plane, this "dream" is increasingly a nightmare world of haves and have-nots.


Michael Rosen is an economics instructor at the Milwaukee Area Technical College.

It's too late to say your sorry for making poisonous toy beads

I thought I was reading the Onion when I saw the headline: "Chinese company says its sorry for making poisonous toy beads"

But this was a headline in a Business Section article in none other than the New York Times!

A statement, issued by the Hong Kong company that manufactured millions of poisonous toy beads in mainland China, JSSY Ltd., read: “Our apologies to all the children who ate the beads by accident and their parents, and overseas consumers. We apologize for all the negative effect caused by this incident to China manufacturers. We apologize for the negative effect on ‘Made in China.'"

Is this an apology or damage control for China Incorporated?

While expressing regret over producing poisonous beads. most of JSSY's apology focuses on the public relations disaster, "the negative effect," that the production of harmful toys could have on Chinese manufacturing companies.

Carter Keithley, the president of the Toy Industry Association in the United States, confirmed this when he said at a toy industry conference two weeks ago in Guangzhou that the bead recall had made it harder for American toy vendors to promise consumers that China was stepping up its vigilance.

“This latest incident has made it extremely awkward for us to continue that defense,” he said.

As is usually the case, the company's incentive for using beads made of poisonous chemicals was a higher rate of profit.

Mr. Liao, chairman and owner of JSSY, said that his company had chosen a glue ingredient for the beads that cost half as much as the glue ingredient that the beads’ main distributor, Moose Enterprise of Australia, thought JSSY was using.

Liang Shuhe, a deputy director general of China’s ministry of commerce, seemed to be excusing Chinese companies that have been found to use unsafe material in producing a range of toys from beads to Mattel products to the Thomas the Train Engine when he said: "Chinese toy makers faced narrowing profit margins — a result of rising wages and the appreciation of the yuan against the dollar — but should still meet safety standards."

Hand ringing and apologies don't alter the fact that toy manufacturing has relocated to China because it is cheaper-wages are lower and labor and environmental protections are virtually non-existent.

If manufacturers award contracts solely on price, they are creating perverse incentives that lead to abusive labor practices, the use of cheap, unsafe chemicals and materials, and environmental degradation.

The United States has only one full-time employee to test imported toys despite recalls in the last two months of more than 13 million Chinese made toys with lead levels that sometimes reached 200 times the safety limit. Remarkably, the Bush administration is actively opposing efforts to increase the number of inspectors and strengthen the Consumer Protection Agency's enforcement tools.

In ECON 101 we learned that the consumer is sovereign! But unsafe toys are not a rational consumer choice!

Poisonous beads and lead painted toys are the byproduct of an unregulated international economy designed by transnational corporations and their free trade accomplices that places a premium on low cost production and devalues quality. Unfortunately, dangerous toys are lining the shelves of your local big box retailer this holiday season.

The on-line title of the Times article has been sanitized to read:" Producer of Poisonous Toy Beads Issues Apology." Hmmmmmmmmmmmmm!

That begs the real question many consumers are asking this holiday season: can we be sure that the toys we buy for our kids and grand kids won't kill them?

Otherwise as the Kinks' song goes: "It's too late to say your sorry!"

Forget the omeg-3 fatty acids, imported fish may be dangerous to your health

For years healthcare professionals have urged us to eat more seafood.

Seafood is a good source of high-quality protein, low in saturated fat, and rich in many vitamins and minerals. It is the source of most of the omega-3 fatty acids, EPA and DHA, found in the American diet, credited with helping reduce the risk of heart disease. It is also thought that infants whose mothers consume EPA and DHA during pregnancy may gain benefits such as longer gestation and better vision and brain development. But the New York Times recently reported that more and more of the fish we eat is dangerous because it is contaminated with dangerous chemicals and bacteria.

Most of us don't realize that 80% of the seafood we consume is imported. And more and more of it is from China whose seafood imports have soared from about $550 million in 2001 to $1.9 billion last year.

According to the Times much of the fish we import from China is produced on fish farms infested with fish excrement and bacteria or caught in highly polluted waters in China's heavily industrialized coastal regions.

While twenty-two percent of our imported fish comes from China, 60 percent of the seafood shipments that were refused entry by American regulators came from China.

Now the Food and Drug Administration has announced it will restrict a number of Chinese seafood companies from selling certain types of seafood in the United States because regulators keep finding Chinese imports contaminated with carcinogens and excessive antibiotic residues.

The list of contaminated fish from China is alarming. In May alone, regulators tagged “filthy frozen scallops”; catfish, eel and shrimp laced with banned chemicals; unsafe additives; pesticides; and cancer-causing agents.

This is the dark side of globalization.

Free market zealots continue to dogmatically cling to David Ricardo's 18th century theory of comparative advantage despite a preponderance of evidence that global "free trade" has cost millions of American jobs (2 million to China alone); undermined hourly wages even as productivity has soared; contributed to the growth of sweatshops, child labor, and a growth in international poverty. Nobel prize winning economist and former World Bank VP, Joseph Stiglitz, notes: "A growing divide between the have and have nots has left increasing numbers in the third world in dire poverty, living on less than a dollar a day. ..the actual number of people living in poverty has actually increased by almost 100 million...at the same time that total world income actually increased by an average of 2.5 percent annually; and now we are learning that global products from fish to toys to toothpaste fail to meet minimum health and safety standards.

The global economy is designed to serve the interests of financial elites and global corporations who scour the global in search of high rates of profit and low cost production. Those who have questioned the globalization's failure to establish even minimal labor, health and safety and environmental standards, cornerstones of every modern national economy, have been attacked as protectionists or worse. Now the chickens, or in this case contaminated fish, are coming home to roost!

For more about Chinese seafood imports read the NY Times article.