The search for cheap, production has found some more cheap, easily exploitable labor. The original outsourcing epidemic, which has been such fun for the workers left jobless and the economies left trashed by it, has found the rest of Asia.
Not that the global suits would understand modern industrial production methods if they were inseminated by them. The Gospel Of The Cheap Unit Price is more or less all they know.
Exploitation of poverty is the other basic principle.
Outsourcing’s mother, outworking, was the start of a global revolution which has been maiming workforces in one form or another for decades.
So, with their unit prices going up as China’s inflation hits, the cute n cuddly corporates are slithering in to other Asian countries.
As
The New York Times explains, hyperbolic bull is also still in force:
A long list of concerns about China is feeding the trend: inflation, shortages of workers and energy, a strengthening currency, changing government policies, even the possibility of widespread civil unrest someday. But most important, wages in China are rising close to 25 percent a year in many industries, in dollar terms, and China is no longer such a bargain.
Even as companies seek other places to make their goods, they are stalked by overheated economies: in Vietnam, for example, inflation was 25.2 percent last month.
More than corporate profit margins are at stake. When the cost of making goods in Asia rises, American consumers inevitably feel pain. The Labor Department said Thursday that import prices were 4.6 percent higher in May than a year earlier for goods from China and 6.4 percent higher for goods from southeast Asia.
China’s problems have yet to be addressed by foreign investors as being any business of theirs. Most are fixable, but locusts don’t stick around to replace the crops they eat. If China sneezes, Asia gets pneumonia, but that idea doesn’t seem to have sunk in, either.
The effect in the US neatly avoids mentioning the kind of profit margins corporate investors enjoy in China, which, I assure you, are a bit more than a few per cent.
Most people think that geography is the sort of subject which educated people do have a grip on, however shaky. The resemblance between China and Vietnam is a bit vague, to say the least. The inflation rates are a good indication of how good, and how realistic, this strategy is.
That isn’t stopping manufacturers from moving their operations from those classy Mexican maquiladoras to Asia. The wages are attractive, compared to China, too. Chinese workers earn less than $1 an hour, but Vietnamese workers earn $25 a month, so everything’s fine.
That $1 an hour is likely to increase, too, so they’re in a hurry. The idea is to “balance” Chinese investment costs. There are also great tax benefits in Vietnam. Four years with no tax, for foreign investors, while China is phasing out tax breaks for foreigners.
However totally obsolete human industrial production may be, the Industrial Revolution lives on in this charming migratory flight of the buzzards.
Everywhere the cheap labor idea has operated, since the 1780s, the cheap labor/bigger profit margin has been a measure of human misery and social ruin. Where Big Industry goes, slumification follows.
I’m just listening to a former Saudi oil minister predicting the price of crude could hit $300 a barrel. It’ll be interesting to see how these bean counting bastards cope with that.
