ASU2003

So, would a global minimum wage be a good thing? I'm sure that inflation would go up, and the people with the money and power now would hate it...But what would happen if the hourly wage was set at $3 USD (or equivilent) around the world? Is that amount too high or too low?

Would the workers just spend more money and the rich buinessmen that are spending more in salaries right now, make more money because people can buy more products? Then again prices would go up because the labor costs would get rolled in to the sale price.

It would stop the practice of companies jumping from one 3rd orld country to the next when the workers start demanding a little too much money compared to the poor people in the country next to them. And it would make outsourcing seem a little less attractive.

kurty[B]

I don't particularly like outsourcing, but I could see this being a disaster. Leave politics aside, and the fact that no country would agree with other countries on what wages should be, but look at just the standards of living. The prospect of helping people in 3rd World Countries by increasing their minimum wage sounds tempting, but what happens when the businesses that are outsourcing realize this is not profitable, and pull out, leaving the unemployment rate in that country to soar, and starvation to become a more pronounced issue.

ASU2003

I know free trade is good... (for some people), but there are ways to limit what gets sold here based on the policies of the country that it came from.


It is a gamble, but I don't think they will pull out. They have to get the products made, and if there are no other countries with cheap labor, you will probably see the cost rolled into the price. And starvation and self-sustainability are other things that would have to be taken into account.

Then again, just reducing the population increase would go a long way to solving those problems.

skier

I think you are vastly overestimating the average wage of people in third world countries, and the tolerance for a reduction in minimum wage in 1st world nations.

I can't see this happening within the next 500 years. It would require a world government, a lower rich-poor disparity among the billions of people living in the world, and a complete cultural revolution that would allow this scenario to come to pass.

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Dilbert1234567

it'd can't work, the cost of living is to different.

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ironman

HA HA HA HA HA HA HA HA!!!! it would never, ever, absofuckinglutley never happen. Here in Guatemala monthly minimum wage is Q1,600.00 that is roughly over $200.00 a MONTH!!, $3 an hour is more than double that amount, beleive me, that's not going to happen, it would be wrong in so many levels...

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aceventura3

Assuming slavery is illegal every where, there is a minimum wage.

We know that minimum wages makes it harder for unskilled people to get work, why would we want to hurt unskilled workers all over the world with an arbitrary minimum wage?

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shakran

It'd be impossible to enforce unless the UN suddenly got a LOT of power and became the world government with actual authority.

Now, what we COULD do to prevent outsourcing is to sliding-tax the hell out of companies who import goods or services from cheaper countries. For instance if one widget costs $5 to make here, and $1 to make in Elbonia, then the tax on that one widget is $4. Make it so that outsourcing doesn't save any money, and suddenly it'll stop because there will be no point.

Rekna

This would be impossible to enforce, what might be enforceable is a global minimum wage for US companies.

aceventura3

A US company will create a non-US company to operate outside of the US if the global minimum wage was a problem. Often you will find burdonsome regulations simply leads to "creativity".

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Willravel

In a perfect world, there would be one economy that would experience no inflation and steady growth, and minimum wage wouldn't even be necessary. Unfortunately, we don't live in a perfect world. If you can't fight for yourself, you get walked all over. The US walks over a lot of people. The only way to prevent that is top have an altruistic entity more powerful than the US to stand up for the little guy. Such an organization does not exist.

Global minimum wage would serve to stabalize poor countries and destabalize rich countries.

The_Jazz

Great idea. It will never happen in my lifetime.

See above for reinforcement.

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Rekna

Except the US could instigate taxes against such behavior that would make it very expensive for companies to do this.

mixedmedia

I agree, it is a fine altruistic idea, but I don't think it would work for so many reasons. Including all those mentioned above.

If the world were a more homogenous place perhaps...the cost of living varies widely from nation to nation...

And, up-and-coming third world nations depend on us in the west to have disposable incomes with which to buy the inexpensive products they are producing which is what gives them jobs in the first place. Lowering the minimum wage here and raising the minimum wage there would be a double-whammy that no would no doubt cause companies to cutback their workforces.

Everything is so interconnected and dependent on the economic factors that are in play right now remaining stable. Change will have to happen slowly in order not to send the world economy spinning into chaos.

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dc_dux

Conservatives dont call it slavery anymore. The politically correct terminlology at the World Trade Organization is "full private stewardry of labor".
To be fair to the WTO, I should add their clarify *important note" that accompanies the press release:

Important Note:
Many visitors from all over the political spectrum have read this release and believed it to mean that the WTO is officially in favor of slavery.

In actual fact, we at the WTO would never, ever wish to suggest that the modern version of the West's free trade with Africa is tantamount to its older form, slavery, or even worse than its other older form, colonialism. That would fly in the face of everything that we stand for.

The catastrophic failure of free-trade policies in Africa may be one partial source of this confusion. The actual, literal slavery that flourishes under the auspices of free trade (in Brazil, Jordan, and elsewhere) may be another.

What will those compassionate conservatives think of next.

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ASU2003

I'm just thinking, what happens if corporations become more powerful than governments (and anti-trust laws were thrown out). They start making laws and rules and enforcing them. They hire mercenary army's to protect their interests of the company. And there is nothing left to innovate. It would be a world collective, where everyone had pretty much the same laws, and it was futile to rebel against them or not be part of society.

It would be great if everyone got along and we could treat Russia like it was Alaska, Mexico like it was Texas and Iraq like it was Georgia. You would need to create a world government and a world currency. Every person would be equal and could travel anywhere.

Yes, it it seems like a fantasy world, but I wouldn't be surprised if that isn't the end goal eventually. Although I understand the problems and headaches it would cause.

dc_dux

The best we could hope for would be bilateral and multilateral trade agreements that establish minimal enforcebable standards (child labor, prevailing wages, workplace safety, environmental quality) for our trading partners that best meet their specific socio-economic circumstances - something both Clinton and Bush failed to do in recent trade agreeements. There is no one-size-fits all approach that is practical.

Along with tarififfs on imports from foreign producers, including US subsidiaries, in developing countries where we have no such agreements, unless similar standards are met by those countries.

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filtherton

FYI dc, gatt.org is a satire site set up by a pair of gentlemen known as the yes men.

dc_dux

LOL....I wondered when someone would catch that

I apologize to the readers if I confused the issue; specifically to ace for trying to bait you with that one.

My last post was of a more serious nature.

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roachboy

a global minimum wage would have the effect of re-regionalizing production.

but the problems of implementation cited earlier are real: the best mechanisms available at the moment are multi-lateral agreements.

this transnationalization of production did not just happen one day--it is the outcome of much of the history of capitalism and the particular types of rationalization that have developed within and around it--and of patterns of financial activity that you can see really taking shape with the internationalization of stock trading in the early 1970s. reversing or altering this tendency will not happen as a result of a single measure.

i support the idea of a global minimum wage because i see it as a way of fracturing production processes that are now highly centralized. but it does not address other important questions----for example the effects of increased automation in manufacturing----it is possible that such a measure would accelerate the automation of production even further, so you'd see more production happening in more places, but that would not translate into a whole raft of jobs for those who lived in these places.

something more radical seems required.

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aceventura3

Large corporations like anti-trust laws. It is usually under the pretense of anti-trust regulations do you have major barriors to potential competing firms entering the market. For example Boeing and Airbus are happy to control the air transportation market. They compete in a gentlemanly manner, but they certainly would not tolerate other major competetors and won't hesitate to use government if needed.

Also, major corporations don't need mercenary armies as long as they have friendly governments (like ours) who will protect their property and property rights.

International law, treaties, European union, NAFTA, etc, etc, already provides a common set of laws under which major corporations can operate across boarders.

We are already living in the world you describe.

"One should never under-estimate the power of creativity"

Ken Lay
Enron

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"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

NCB

You clearly have very little understanding as to how wealth is created.

As far as a GMW, theres no way that you would be able to get that sort of consensus. In fact, you'd have a better chance at "giving peace a chance" or "saving the whales" or having "no blood for oil" before instituting a GMW. Noble idea with little practicality

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Yakk

So we have a few problems.

First, there is a world-wide excess of unskilled labour. The supply of unskilled labour, world-wide, is enough to lower the value of unskilled labour below starvation wages.

You can hire someone at starvation wages or better and train them a simple skill. The value of their skill sometimes makes them worth feeding above starvation wages.

The interesting part is, most of the value of their labour is actually captured by regional stability and lack of government regulation, plus sufficient infrastructure to cheaply bootstrap an industrial farm. Regions that are both stable and have governments willing to kowtow to corperations are what the corps. look for and what makes paying the wages worthwhile. People they can get anywhere.

Now, there are interesting demographic shifts going on. Rich people who have old age security tend to have fewer children, so areas that get rich tend to have their population go all pear shaped. This means the supply of labour in these rich areas shrinks -- hence the current immigration issues in the west and the wealthier areas of the middle east/asia.

The end of the cold war caused both Russia and the USA to pull money out of funding random puppet dictators. This seems to be causing a downswing in warfare, and an upswing in the wealth of lots of areas. Africa, while still a basketcase, is starting to bootstrap itself up. More and more semi-Democracies (nearly every state in the world pretends to be a democracy) are actually starting to see power flow based on voting.

If stability spreads, corps. will continue to look for stable areas with infrastructure (or enough to build more), cheap labour, and governments who are amienable.

The real costs are probably the materials and the infrastructure, more than the labour. Some corps. will pay crap for labour, and some will pay more -- but the supply of the cheap labour won't determine the price for a long while. They'll pay based off of the economics of slavery, much like Henry Ford did.

When you pay a worker more, they are more likely to stay around after they have gathered their skills. They are less likely to get sick. And, if you sell luxury goods the worker might want, you can usually recoup most of the costs. Starving a worker, unless skill is utterly useless in the job, is stupid.

Each time a company does this, they build up the local infrastructure. New power, sewer, transportation lines are built. The local economy gets a small infusion of hard currency, which (ideally) is spent by other locals on both importing luxuries and buying the means of production and making money.

Now, remember that the industrial West has been averaging 3% or so real growth for the last 200 to 300 years. 3% over 200 years grows the economy by a factor of 370 -- so don't expect an overnight miracle.

Even if the area has economic growth at 10% per year, it would take 62 years to catch up to the West today assuming they start out where the west was 200 years ago, by which point the West would be 6 times wealthier than it is today. It would take 87 years to catch up completely with the West.

See all those roads, buildings, wires, railroads, ports? Institutions (universities, government bureaus, traditions, companies)? Factories? Habits of peace and prosperity? Canals, education, social safety nets? Having a parent who can catch you if you fall? Geographical building tricks, corner mechanics shops, accountants who understand taxes? Maps that cover the location of mineral wealth, surveys of land, sewer sytems? Playhouses, dramatic traditions, habits of bringing up kids?

All of these things are real infrastructure. The West has been building it, at 3% per year, for 200 years. Most pieces of it stop being useful after 20 to 50 years -- but meanwhile, the next generation is leveraging that wealth to build for the next 20 to 50 to 100 years.

In Stratford, Ontario they are doing a 100 year infrastructure project. They are rebuilding the sewer system to survive 100 years of projected growth. They can do this, because people aren't starving, and they have the excess wealth to make such a project be a minor inconvinience.

Because they can afford to do this, sewer service for the next 100 years will be cheap, reliable and there. This means that a new house or factory or other economic building doesn't have to hire people to carry away the human wastes, fewer people die of sickness, and a million other small differences.

...

Now, lowering the wage in the west to the same level as developing nations would be extremely dangerous to the wealthy and powerful here. The gradiant of wealth correlates pretty damn strongly to the rate of crime, economic instability, and revolution. As a rich person, you want to live near people who are only a bit less rich than you.

A massive boost in the minimium wage elsewhere would cause acute starvation in many areas, and would be unenforceable.

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host

I understand....NCB, and I'll explain it to you. Instead of investing in productive ventures, the rich become richer by buying the representation in government of rest of us. They buy our political clout, and they turn it against us.

Then, if reform does come, and restoration of political balance is attempted, the monied interests that caused the economic and social injustice in the first place, feign concern for the future of the masses who they sold out and grew rich, as they f*cked them over, "for their own good....to attract (slave wage) jobs" for at least 30 years:

Yakk

Yes, that is far too fast an increase in the minimium wage.

The economic shocks can probably be recovered from. But I'd fully expect there to be a significant short-term spike in poverty caused by such a rapid increase.

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