Happy New Year. Now, to business.
I had to buy two pairs of shoes in the last few days.
The first pair were sneakers to kick around in to replace my previous pair that lasted less than a year. The sole beneath the heel had worn through and let the water in, despite repeated applications of duct tape. I don’t have much luck with sneakers (possibly because I walk fast and bang my heel down hard) and I’m getting a bit annoyed at having to treat shoes as a disposable purchase. Still, I got a pair of shoes for £10 that will be a bargain if they last a year. The other pair was a pair of £20 trainers to replace my last pair of £20 trainers that I bought in 1999.
So we live in a world where shoes are a disposable purchase and cost no more than they did 12 years ago. Exploitative sweatshops, or a liberating drive toward ever greater efficiency that will be a rising tide to lift all ships? You decide!
I’m not convinced by arguments about poor conditions in “sweatshops”. I certainly wouldn’t want to work in one, but that’s not the point. The point is, would I rather work in a “sweatshop” or one of the other employment opportunities available in the developing world, such as menial/subsistence farming, prostitution, or sorting through rubbish dumps?
A recent study of 18 nations found that typical manufacturing workers saw their real wages go up seven times faster than they would have otherwise during the first three years after the inflow of foreign capital.
At the same time, productivity grew even faster than real wages, said Peter Henry, the Konosuke Matsushita Professor of International Economics at the Stanford Graduate School of Business. “Unit labor costs fall, so firms are actually becoming more profitable even as workers experience an unprecedented increase in wages.”
