As all the news seems to be about the government shutdown and the looming disaster of not raising the debt ceiling, it was great to read a story by Daily Kos’s Laura Clawson about manufacturing jobs being moved from China to the U.S.
Neutex Advanced Energy Group, an LED light bulb manufacturer, agreed to bring jobs back to the U.S. Better still, they reached a deal with the IBEW to make those job union. It may only be a small step forward, but when nothing in Washington is moving forward (Thanks, Republicans), it’s good to hear some good news.
I love baseball, and this weekend I attended minor league games in Indianapolis, Nashville, and Louisville. While in Louisville, I took a tour of the Louisville Slugger Museum, which features a working factory that makes bats for big leaguers and recreational players. During the tour, we learned that from the 1880s to the 1970s, bats were made by hand. They were the work of craftsmen who used their hands and eyes. A good bat maker could carve a bat in 20-30 minutes. By the late 1970s an automated process was devised with a new lathe that could carve a bat in 30 seconds. Great for the company, not so good for the men who worked the lathes.
This story underscores the impact of automation on work. One of the lathes at Louisville Slugger could cut more in an hour than a man could do in a day. No sane business would continue to work in an inefficient manner. Layoffs were necessary. Similar advances have led to millions of layoffs in manufacturing, assembly, and supply chain. Better technology means fewer jobs. No company can stick with people when machines can do as good or better a job at a much lower cost. We all love innovation, but we have to look realistically at its aftereffects. Faster, cheaper, and more efficient usually means people will lose their jobs. The challenge is to generate new jobs in a world where machines, software, and automation are improving all the time. What will we do if a time comes when we have more people than jobs?
It’s not unusual to hear stories about worker exploitation in China. More and more, it’s also not unusual for Chinese workers to resist. Recently, workers in a plant outside of Beijing held an American plant owner hostage for 6 days to protest low wages and layoffs. The dispute ended when the plant owner agreed to the workers terms, which he is now claiming to be the result of an act of coercion.
There are two reasons being given for this situation. Employees say they were owed wages. Local news claims that the owner was trying to outsource jobs to India. Both explanations show what hardships Chinese workers face. China’s own population means that it will almost always have a surplus population for employers to exploit. Add India’s billion plus to China’s billion plus, and we have an ugly situation for some of the world’s poorest working people.
What will they do? Will kidnappings of bosses increase, or will actions grow even more radical? The great American poet Langston Hughes captured this situation and mood in his description of a “Dream Deferred": “Does it dry up/like a raisin in the sun. . . . Or does it explode?”
Don’t get too excited. It’s in China. According to the Financial Times, low wage workers in Beijing will get a 21% wage increase. Across the country increases will range between 12% and 21%. Overall inflation in the country is up 5% with food costs increased by nearly 12%. The increases in minimum wages are meant to help those who have the least, a concept more and more foreign to American society.
A Chinese economic expert says that the government is seeking to keep tensions from rising between the rich, who are living very well, and the poor, who have not benefited from the country’s booming economy. The government estimates that 3 million people will be aided by this policy.
Moral of the story? It might not be as simple – or as good – as it sounds. While I want what is good for working people anywhere on the globe, this kind of increase might also foreshadow inflation problems in China. In the long run, no minimum wage laws can keep pace with inflation. In fact, it could make the problem worse. China’s policy of cheap money may be catching up with it, and those who have the least will suffer most.
Whenever we read or hear about China, it usually involves the words economy and booming. However, as the New York Times reports, new college graduates in China, like their counterparts in the U.S., are struggling to find jobs. The government supported higher education and increased graduates from 830,000 in 1998 to more than 6 million last year. There’s one big problem: Most of the new jobs in China’s factory-based economy don’t require a college education.
To make matters even worse, the increased number of college graduate means more people are competing for professional jobs, which has driven down salarys for those positions. College graduates are sometimes working for lower wages than factory laborers. Several academics quoted in the article point to these conditions as a source of potential instability.
This news is little comfort to young Americans (or Americans of any age) who do not have jobs. I believe the value of this story is to look below the surface of our media’s often too simple claims. China’s booming economy is based on the exploitation of labor and a totalitarian political system. This system seems doomed to collapse as Chinese workers become more educated and their expectations for a better life increase. How China deals with this problem will be one of the most important forces shaping the 21st century.