Monday, February 20, 2012

China or Bust

I'd like to continue with the subject raised in my last post regarding working conditions and wages in China.  There has been a lot of scrutiny in the media on this subject lately, most of it focused on Apple, largely because Apple is so insanely profitable that it's easy to make the case that they could improve wages and working conditions if they really wanted to.

So the question is: should they?

On the one side, we have the Milton Friedman, pure economics school of thought, which believes that the economy should be driven by pure supply and demand, and any attempt to artificially tinker with it will be negative (or catastrophic) to all involved parties.

On the other side, we have people who believe that everybody deserves a living wage, and good working conditions, no matter what.  This group often overlaps with people who are upset about the loss of US manufacturing jobs, and would like the US to become more competitive by bringing foreign workers up to US standards.

Who is right?

On the subject of wages, I have to vote with the school of economics here.  Judging wages in other countries against US standards makes no sense when you consider local costs of living, and economic alternatives.

Let me provide a personal example.  A few years ago, I worked with a group of programmers in India.  I found them to be dedicated, hard-working and competent.  I knew their names, talked with them frequently, and enjoyed their company.  They were paid a small fraction of a US competitive wage.  This money allowed them to live a comfortable life in India.  The savings to my company helped (in small part) to lower the price of its products and increase its margins (which directly benefited US stockholders, which includes a large number of US retirees).

I think about them any time I hear somebody complaining about US programmers losing work to foreign competition.  While I can sympathize with anybody whos lost their job, I cant see a net advantage to the planet by putting three or four of Indian programmers out of work so a single US programmer could be hired in their place.  Looking back on it several years later, I still believe that working with them left all of us better off.

So if wages were all there were to it, I'd be a pure free market advocate.  As much as I would like to improve the economy and employment figures here in the US, I cant justify one country enjoying a high standard of living while people in another country, possessing the same work ethic and skills, starves.  My hope is that we can quickly bring much of the rest of the world up to first world standards, without the US sinking down to third world standards.

But in addition to wages, we also need to consider working conditions.  In their profile on Foxconn (which largely triggered the recent round of media attention), the New York Times highlighted workers being exposed to poisonous chemicals, explosions caused by non-ventilated aluminum dust, and other health hazards.  On this subject, I believe first world standards should prevail.

While I was making this argument on a forum in the Huffington Post, somebody named "S M V" responded as follows: "Exposure to toxic chemicals and other work place hazards ... needs to be compared to the other options available. In 3rd world countries a lot of people stay alive by scavenging through garbage dumps. If they can have a better life sorting through computer waste and the resulting exposure to chemicals would you ban it? If you required 1st world safety levels much of the recycling either would not happen or would be automated."

I think S M V has a point, but it's not one I can subscribe to.  It has the same horrible logic of questioning whether its right for shipwreck survivors to resort to cannibalism and eat their best friends in order to avoid certain starvation.  On paper, considering only raw survival metrics, it's probably inarguable.  But we don't live on paper, and were more than just metrics.  People have names, and are more than the sum of their statistics.  So while I can't come up with a coherent logical argument to defeat S M V's rationale, I can propose some scenarios to consider.

Here's scenario number one: I'm back with my group of Indian programmers, and one of them leaves the group because they're not making enough money.  I imagine I would wish that person well, and hope that they got something positive out of working with me.    Even if they left angry, I'd be more inclined to think the fault lay with that person, rather than myself, because I know they took the job willingly, fully aware of the compensation, and have lost no future opportunities in the process.

I can live with that.

Here's scenario number two: I'm back with my group of Indian programmers, and am told that one won't be working anymore, because he or she has gone blind due to working conditions in the facility.  I don't think I'd sleep well that night, or the night after that.  I knew that person's name.  I'd worked with them for months, or years.  I'd think about the cost pressure I'd personally exerted on their employer, and wonder if I had direct responsibility for the conditions that resulted in this permanent injury.  Even if I knew they had equal or greater likelihood of getting injured even worse doing some other local job, I don't think that would help me sleep better at night.

I don't think I could live with that.

Neither, I suspect, could S M V.

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