Eric's Beijing Diary

Yesterday Snow (holding the oranges behind her sister's head) took me to a sweater factory in a neighboring town. Her sister and her sister-in-law both work there. The factory is located in a small village in the countryside. I asked the manager why the factory was located here instead of in the Pearl River Delta, which is so well known for its factories. He told me that it was easier to locate closer to where people in the countryside lived, because they would be more willing to leave their farms to work in the factory if it was nearby. Makes sense, really. In a way, it is a repeat of what happened at the time of the return of Hong Kong to China. Prior to 1997, many in Hong Kong were worried about how the transfer of power would affect life in Hong Kong. But in fact, the transition was a boon to the manufacturing industry, because the cost of manufacturing in Hong Kong itself had slowly risen over the years, mainly because the slow, steady increase in the cost of labor. Companies who decided to stay and sweat out the transition actually benefited tremendously from the fact that they could now build their factories in Mainland China and save a lot of money on labor. But now, of course, after all these years, the wages in and around Guangzhou itself have also risen, and manufacturers are tending to move even further out away from the main industrial center, where the cost of labor is lower.

Learning the trade.
It is hard to describe the innate refinement of these quiet peasant women. Some things have to be experienced. They were a little shy at first, but actually quite friendly. All of them come from farm families. When Snow introduced me to her sister, I was a bit curious. You know, in China, people use the word "sister" to refer both to their sister and to their cousin. So to clarify this, I asked Snow if she and her "sister" had the same parents. Snow told me the story. She said, "When I was born, my parents wanted a son. But I am not a boy; I am just a girl." She then told me how this kind peasant family had taken her in. Her sister was eight years old when Snow entered her family.

The tremendous demand for low cost goods is putting many, many people to work throughout this country. There is a backlash, of course. Many people in the United States decry the loss of jobs to China. It is understandable that they would be upset, but their anger is misplaced. Whatever else you can say about the mass migration of manufacturing to Asia, it is not China's fault. The simple fact is that the cost of labor in the United States is just too high. The unions, which once had a purpose, overplayed their hand.

The recent protest against Walmart notwithstanding, Americans will continue to purchase lower cost goods from Asia, because they need the significant savings that it gives them in their cost of living. And speaking of protest, it is well to point out, I think, that the protest against Walmart was not financed by nickels and dimes from working people. It was funded by the big labor unions, because they see companies like Walmart as a threat to their power. During the current election, the AFL-CIO announced a budget of 53 million dollars to keep the Republican candidate from being elected. Where in the world did the labor unions get that kind of money? That's a rhetorical question; I know the answer. They got it because of states that have laws that force you to pay dues even if you are not a member of the union. When I was a schoolteacher in Oregon, I had to pay union dues every month. During my college days, when I worked in the cannery, I had 30 days to join the union or lose my job. North Dakota and Arizona are both "right to work" states, and I chose to exercise that right, thank-you. But my point is that the labor unions managed to pass laws in many states that gave them far too much power.

Certainly there are differences of opinion about this. I remember once when I was in the trucking industry, I was sitting in a truck stop watching a movie about Jimmy Hoffa (can't remember the name of it). We were talking about the movie a bit, and one guy said, "Every truck driver in America owes that man a debt of gratitude." I was a non-union truck driver, but I had to admit that he had a point. There was a time in America when unions were necessary. But they went too far.

In my opinion, the biggest mistake the American labor unions made was that they consolidated power by encouraging an adversarial relationship between management and labor. In the sixties and seventies, union workers managed to force greater and greater wage increases, particularly in the auto industry, because companies could compensate by raising prices. Unions cultivated loyalty to themselves. Workers got together for union picnics (not company picnics), and they sang their anthem: "The union is behind us, we shall not be moved..." But then the Japanese came in. The Toyota Corolla came to town during the Saudi oil embargo and sold like hotcakes. That started the trend. After China opened up, more and more companies moved their manufacturing to China. Before these companies moved to China, their employees had shown no sense of loyalty to them, so when the crunch came, the companies had no qualms about leaving them to their unions and going to Asia. The unions had forced higher and higher labor costs, and the companies finally got fed up with it. So the jobs left. And they are not coming back.

Certainly I have sympathy for those workers who have lost their jobs in this process. But they don't have to stay unemployed. They just need to become a little more global in their outlook. I remember once when I was living in North Dakota, I was talking to a guy who had a small business. At that time, Japan was the great nemesis. He said, "What are you going to do, if your kids grow up and all the jobs have moved to Japan?" Obviously, this guy didn't know me very well. I said, "I'd tell them to go to Japan and get a job." A couple days later, I saw the same guy driving in his car. Know what he was driving? A Datsun 240Z. Interesting. But I shouldn't judge him. Maybe he bought it the day after I talked to him.

But let's get to the bottom line. In long run, free trade is good for everyone. It is good for companies, because they are able to stay profitable by finding the lowest cost of production. But it helps workers too, because it levels the playing field, and provides more jobs for more people.

I don't say that China doesn't have problems. This is a developing country, and it is going to take some time to find the balance. For example, the workers at the small factory I visited have one day off a month. They work seven days a week except the first of every month. That's not good. Every working person should have one day a week to go to church or be with their families. But this little factory was not a "sweatshop" by any means. These ladies were glad to have the opportunity to make a little extra money. And no one was forcing them to stay. At any time, they can quit and go back to the farm if they want to. I asked Snow if any of them would go to university. She said their families didn't think they needed to go to university, because they would get married. That, of course, is old thinking, because more and more women are working even after they get married. In fact, Snow's sister is married and has a daughter. She is a very bright lady, but has an elementary education. Her daughter is being cared for by her inlaws. So you could say that the factory is taking her from her child. But will refusing to shop at Walmart make her life better? I need someone to explain to me how that works. Here, then, is the bottom line: Every time you shop at places like Walmart, you are taking money from the coffers of the union fat cats, and sending it to the poor working people of Asia. What is wrong with that?

Labels: Work