I recently got into a pretty good discussion with some family members about how everything in the US is being made overseas and how it negatively impacts the US economy. One of the things that came up, of course, was how workers overseas are paid significantly less then workers are in the US. My response to this was something along the lines of, “At least they have a job. If they weren’t working, what do you think these people would be doing?” After the discussion, though, I realized that I didn’t know specifics about the Chinese economy and what working conditions are actually like over there; how much people are getting paid in specific industries and what exactly the cost of living and standard of living is. I’m hoping to get a little discussion from people on this topic and also some links or sources in which some of us could benefit from to get an idea of what it is like working in not only China but other Asian countries that are supplying the rest of the world with a lot of products.
China has an emerging and growing middle class. The middle class of the west is vanishing. China makes a lot of things today compared to before. The west hasn’t seen a large growth in the productive workforce in the past while.
This is about the basic understanding that I have. It’s painfully obvious that this is the case when you can simply go to any store and see that most products are being made in Asia. I am more or less concerned with Asia’s standard and cost of living though.
This issue is a “product” of a large issue at play. Right now America is the engine of the world economy. The fuel? Debt. Domestically policy makers have encouraged massive credit creation and the backing of risky loans and securities to entice more and more people to consume. This rapid credit creation also inspired huge amounts of investment into businesses. When a business gets to much investment they start working under capacity and fill the gap with cheaper labor. A point reached where the price of labor that was demanded (almost forced) by companies went below union standards and minimum wage. Their only solution was to move to countries were the workforce had a high demand of employment at little cost.
Right now, China being in the lead, the Asian countries are putting themselves into debt to subsidize their labor to keep costs down in America to bring in more consumption. Even though these workers are paid so little (compared to the average American) they actually live above average in their respective country. Due to the exchange rates and the “basic needs” defined by their enviroment they can live on a lot less. China especially is facing a huge problem though and that is massive unemployment (with the recent economic downturn) and social issues arising. People have felt the benefit and gratification of having a job and they’re loosing it. Social issues are arising in these countries and the people want to enjoy the products they help create, but they can’t afford them since their wages are low. It’s a vicious cycle that is about to break and when it does you can expect revolutions.
The Chinese citizens are trapped in poverty unable to purchase the goods they produce because of currency manipulation. Their economy is extremely unsound and will probably suffer the same fate as America’s. The fact that some jobs are shipped to China is the result of insane regulations and taxation; either way, it doesn’t really affect the U.S economy.
It affects us big time. China is the leader in the manufacturing world of driving down labor costs. They subsidize labor costs. Doing so they have put themselves into massive amounts of debt. Once they go prices will rise since that deflationary pressure isn’t there.
Not trying to defend all aspects of the Chinese economy per se, but that’s an absolute falsity.
Where could one go to get a really good source of information about work conditions and how the Chinese citizens are living, as a whole?
Right now I’m living with a family in one of China’s poorer cities; the father is a factory worker and the daughter had to drop out of school after grade 8 to work (both of her parents are deaf and dumb) so I’d say I have a fairly good grasp of the condition of the average Chinese worker.
Any questions, feel free to ask.
Asia in general will continue to become much wealthier in the future. Asia is where the vast majority of creditor nations are; China, South Korea, Taiwan, Singapore, etc. Many of the countries in Asia also have high savings rates relative to the rest of the world. Unfortunately for the people there many of their governments, especially the Chinese government, continue to funnel huge amounts of reserves into the black hole known as US government debt. Not to mention that, not only China, but many countries in the region have been devaluing their own currencies in an attempt to gain a (temporary) advantage in exports due to the reliance of many of their economies on exports.
Asia in general has moved towards a freeer market (compared to what they had certainly!) and if they continue to move in this direction, the people there will reap huge rewards. If Asian governments cease devaluing their currencies for temporary boosts in exports and buying Treasuries, their purchasing power will rise exponentially and domestic demand will compensate for the loss of export demand that only arises from them loaning the US money to buy their own goods.
Make no mistake about it, living standards in many Asian countries are probably far lower than the US and Europe at the moment, but that will change drastically over the next decade or two.
I’d like to know about India too. Usually China is the main theme, you hear very little about India but shouldn’t they be growing rapidly too?
By the way, there is this huge assembled picture of earth at night where you can see the cities lights worldwide. Is there a similar image of the present state?