To create a level playing field with China: allow slave wages in U.S. or impose tarrifs

by Ben Hoffman

China has been manipulating their currency to undercut U.S. products. They allow slave wages for workers, which is why many U.S. manufacturers have moved their manufacturing jobs there. They have lax environmental regulations that allow the dumping of toxic materials into landfills, rivers, and into the air.

So what do we do to create a level playing field? We could continue the decline of our standards and become a third-world nation. Or we can aspire to American exceptionalism and set standards for excellence rather than a race to the bottom.

The House of Representatives recently passed a bill that will impose tariffs on goods from China (HR2378). Here is a summary:

Currency Reform for Fair Trade Act – Amends the Tariff Act of 1930 to require the administering authority to: (1) determine, based on certain requirements, whether the exchange rate of the currency of an exporting country is fundamentally and actionably undervalued or overvalued (misaligned) against the U.S. dollar for an 18-month period; and (2) take certain actions under a countervailing duty or antidumping duty proceeding to offset such misalignment in cases of an affirmative determination.

Subjects the misalignment to the U.S. dollar of the currency of nonmarket economy countries also to the countervailing and antidumping duty provisions of the Act.

Source

Naturally, this bill will die in the Senate. If, by some miracle, it becomes law, the result will be the return of many manufacturing jobs to the U.S. Sure, we might pay a little more for electronics, appliances… well, pretty much everything, since nearly everything is made in China any more, but our country will be better off.

The problem we have is that right-wingers have no desire to make our country better. They only do what they are told.

23 Responses to “To create a level playing field with China: allow slave wages in U.S. or impose tarrifs”

  1. That is funny – I have been having this exact conversation will Alan over on my blog. Which do we want? Sweatshops in the US? Or, US jobs lost to countries that have sweatshop working conditions?

    So far, Alan hasn’t responded with which of the two he would rather have. I know he is often over here, so maybe he will respond now…

    😉

  2. This is kinda dumb, Ben.

    “Allow slave wages”?

    I mean, really?

    We don’t have slaves in this country. Ever person who sets foot on this soil is a free man.

    And they are free to work for cheap.

    The problem is, our government won’t even give them that option.

    • We don’t have slaves in this country. Ever person who sets foot on this soil is a free man.

      That is a bit naive, Natassia. We aren’t nearly as free as we like to think. I am not talking about the obvious things that are against the law. I am talking about perfectly legal thing that many people simply cannot do.

      Freedom of choice requires freedom of opportunity. You can’t very well choose something if that option isn’t available to you, can you? Yet, with the systemic inequalities in our education system we don’t really have freedom of opportunity, do we? People born in certain neighborhoods will never have the freedom to pursue certain lines of employment because the education required is unavailable to them – all because of an accident of birth.

      • You’re right.

        We’re not free to work for less than minimum wage.

      • We’re not free to work for less than minimum wage.

        Of course you are – you could be an illegal alien doing migrant labor. Then you would have absolutely no rights – but you would be keeping the price of my tomatoes down….

      • [We’re not free to work for less than minimum wage.]

        Sure you are. Become a contractor. You can work for a dollar a day if you want.

      • Illegal aliens make the CHOICE to illegally cross the border or illegally overstay their visas.

        They are rightful citizens of another country.

        I’m not going to fall for that “they have no rights” crap.

  3. Ben, I’m sure you’re not a Thomas Sowell fan, but I just love the old guy.

    Anyway, talking about the “lack of opportunity” based on someone’s unfortunate circumstances from birth…

    Sowell wrote this over five years ago in response to the riots in France:

    … in the late 1940s, the unemployment rate among young black men was not only far lower than it is today but was not very different from unemployment rates among young whites the same ages. Every census from 1890 through 1930 showed labor force participation rates for blacks to be as high as, or higher than, labor force participation rates among whites…

    Prior to the decade of the 1930s, the wages of inexperienced and unskilled labor were determined by supply and demand. There was no federal minimum wage law and labor unions did not usually organize inexperienced and unskilled workers. That is why such workers were able to find jobs, just like everyone else, even when these were black workers in an era of open discrimination.

    The first federal minimum wage law, the Davis-Bacon Act of 1931, was passed in part explicitly to prevent black construction workers from “taking jobs” from white construction workers by working for lower wages. It was not meant to protect black workers from “exploitation” but to protect white workers from competition.

    Wow, who knew?

    Often the higher-paid workers are older, more experienced, more skilled or more unionized. But many goods and services can be produced with either many lower skilled workers or fewer higher skilled workers, as well as with more capital and less labor or vice-versa. Employers’ choices depend on the relative costs.

    The net economic effect of minimum wage laws is to make less skilled, less experienced, or otherwise less desired workers more expensive — thereby pricing many of them out of jobs. Large disparities in unemployment rates between the young and the mature, the skilled and the unskilled, and between different racial groups have been common consequences of minimum wage laws.

    You can read the whole thing here.

    • Try doing a critical analysis of that article and see what you come up with, rather than just accepting that as fact. Go on… I dare you. 🙂

      • My analysis is colored by my worldview. I believe that people typically behave in a rational manner (not good but simply rational.)

        People will typically take the path of least resistance.

        Imagine what would happen if the federal government abolished the minimum wage today and capped unemployment payments at 3 months.

        How would businesses react? How would the unemployed react?

      • Natasia says: My analysis is colored by my worldview. I believe that people typically behave in a rational manner (not good but simply rational.)

        This is something I can speak to with some expertise without any taint from a political worldview. It sounds nice to believe that people will behave in a rational matter, but years of empirical research simply shows that is not the case.

        For example, we irrationally value small short-term advantages over larger long-term advantages. In experiment after experiment people are shown to choose “smaller sooner” rewards over “larger later” rewards, even when the delayed reward is clearly and objectively the better choice.

        That is just one example – there are dozens of others I could cite….

      • [My analysis is colored by my worldview. I believe that people typically behave in a rational manner (not good but simply rational.)]

        Really? There are a lot of people who believe that some guy about two thousand years ago was born to a virgin mother, was resurrected three days after he died, and they believe that by believing in that, they’ll go to some magical place when they die. There’s nothing rational about that.

        [Imagine what would happen if the federal government abolished the minimum wage today and capped unemployment payments at 3 months.]

        I don’t have to imagine. This is what happens:

        “Life is meaningless,” said Ah Wei, his fingernails stained black with the dust from the hundreds of mobile phones he has burnished over the course of a 12-hour overnight shift. “Everyday, I repeat the same thing I did yesterday. We get yelled at all the time. It’s very tough around here.”

        Conversation on the production line is forbidden, bathroom breaks are kept to 10 minutes every two hours and constant noise from the factory washes past his ear plugs, damaging his hearing, Ah Wei said. The company has rejected three requests for a transfer and his monthly salary of 900 yuan ($132) is too meager to send home to his family, said the 21-year-old, who asked that his real name not be used because he is afraid of his managers.

        At least 10 employees at Taipei-based Foxconn have taken their lives this year, half of them in May, according to the company, also known as Hon Hai Group. The deaths have forced billionaire founder Gou to open his factories to outside scrutiny and apologize for not being able to stop the suicides. Gou built his company into the world’s largest contract electronics manufacturer and now clients from Apple Inc. to Hewlett-Packard Co. are probing the company’s working conditions.

        Source

        Also, that wasn’t much of a critical analysis. 😛

      • hippie,

        How is it irrational to focus more on the short-term than the long-term?

        It all depends on what someone’s value system is and what they consider to be a priority.

  4. Ben, I didn’t give my analysis. I was simply pointing out that any analysis I would have given would be colored by my worldview. That’s all.

    Taipei is not America. In America, people can migrate and seek out better climates, land, jobs, opportunities, entrepreneurship etc.

    Also, that’s not what would happen if there was an abolition of the minimum wage.

    If all businesses were like that, they’d go out of business for lack of employees to do the work.

    • Americans are no different. Look at all the abuse of the coal miners before mining regulations and even now, with mining companies skirting regulations. Look at the egg contamination. Look at the oil rig disaster.

      No, we’re better off with a minimum wage and regulations. America is better than these third world countries that allow abusive conditions and slave wages.

      • I think you are equating safety regulations with a minimum wage. This is wrong.

        Abolishing the minimum wage would have no affect on safety requirements. We’d still have OSHA, you know.

        Taiwan is a tiny island with a population density five times greater than mainland China, dude.

        “Slave wages” is an oxymoron. If you’re a slave, you don’t get wages.

      • “Slave wages” is an oxymoron. If you’re a slave, you don’t get wages.

        Oxymoron without the “oxy” is the appropriate term here. Look up “slave wages” or “wage slave.”

        Natassia, you have no intellectual curiosity. Do you even work for a living?

      • My first job as an adult, I made $6 an hour working 6 days a week.

        Would that qualify as “slave wages”?

        I certainly wasn’t a slave there. I didn’t have to work there. I could have worked elsewhere.

        That’s why I don’t buy this crap you’re trying to sell.

      • I repeat… Do you even work for a living?

  5. We are all slaves really. If you look at the economic system it is set up for failure. It is meant for a small elite group the wealthy to keep and become wealthier at the cost of peoples freedom and the planet which we live. Dont believe me check out this video. about 2 hours long and the first 5 min a couple important facts but more special effects into but after that it gets deep. Really deep into understanding poverty, racism and all types of things that are created through the views of television. Television is tell lies to your vision because it makes you believe things to be true and pin point us all against each other from religion to race and classification of a wealth status. http://vimeo.com/13770061 it should lead you to zeitgeist:addendum 2008 by peter joseph there is another important study and that is of the belief in God from the egytian jesus so to say to the jesus we know today and how the same story has been passed down through generations and different eras and yet since the finacial corporation we have in place now does not give freedom of worship but plays the same game of monopolizing capital for advancement. Watch the other first as it is more important to the economic structure of struggle we are prone to. However this one hear is an eye opener to the beginning of study of what religion and God may or may not be about along with some other important things. They are both two hours so choose the first listed in this message but then watch this one Zeitgeist: The Movie – 2007 by Peter Joseph or use this http://vimeo.com/13726978

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