One of the reasons I got sorely disillusioned with capitalism is the fact that many capitalists I do know will argue about things like maquiladoras or outsourced factories, saying that they’re great for impoverished people because now they have jobs.
So people n the third world are supposed to be happy putting together your flat screen T.V.s, working menial, repetitive, and sometimes dangerous jobs because it’s better than starving?
Last time I checked, true freedom wasn’t working a laborious job for 30 bucks a week thanks to the generosity of some American capitalist. It was the power and means to seek a full and happy life at any means necessary, and the economic flexibility to find a niche for yourself.
Plus the argument reeks of Western superiority.
Outsourcing factories increases the productivity of labour in the country because it has more capital to work with, increasing the marginal revenue product of labour, and therefore increase the wage rate. Nobody has ever suggested that making TVs in factories constitutes “true freedom” (whatever that’s supposed to mean) except inasmuch as it allows people in those countries to achieve their short and long term goals. Foreign investment is an important stepping stone on the road to prosperity.
If there’s anything that reeks of “Western superiority” it’s people who live comfortable lives condemning the very mechanisms that the world’s poor have of increasing their wellbeing, because those mechanisms don’t adhere to some moronic hippie standard of freedom that only wealthy Westerners can indulge in.
The reason “poor” countries are poor is because they lack the resources, skills, labor force and knowledge (or a combination of those items) that it takes to produce “wealth”. Wealth is the best available goods and services in any particular industry.
Poor countries are poor because they lack two things: #1 they can’t build or produce the top notch goods and services that first world countries can. And #2, they lack the ability to exchange for those goods and services.
What does this mean? It means that if you’re country A and you don’t have any oil, let’s say, but you have computer chip manufacturing, you can exchange and have the best of both worlds. Or if you’re country B and you have oil and computer chips, you’re self-sufficient and can remain a first world country.
3rd world countries need help to either #1 produce these goods and services or #2 find ways to leverage what they can produce to exchange for those goods and services.
Stepping out of an agrarian society (farming) and into an industrial society and eventually into a first world society doesn’t happen overnight. It happens through evolution and education of both a society’s/country’s people and their resources/production methods.
People aren’t going to be born with the ability to code computers or build complex production machines or to be top notch doctors. All of these things take education and effort and input and all of those things take time, money or both (usually both). So that process is slow. It’s hard to leapfrog from one position to the other. It is possible and growth can occur fast, but it can not be instantaneous.
For example, I’m working with a company in the Philippines. the Philippines isn’t the poorest but they aren’t rich, either. They don’t produce their own medical equipment (top notch machines like MRI’s PET/CTs and Gamma Knives) in the Philippines. They don’t know how to, they lack the education and industries to do so. So they have to purchase from other countries like the US or Germany or France. They sometimes buy brand new equipment but usually they buy used, older equipment. Relative to the entire planet, they have decent medical equipment but they don’t have a lot of first world level equipment. However, what they have today is worlds better than what they had a decade or two ago. Today, they are about 5 years behind in cancer medicine, 5 years ago they were a decade behind and 10 years ago they were, more or less, ignorant of cancer technology. They are currently limited by one thing, currency exchange rates. The goods and services that they can produce are still limited in quality and quantity so it’s harder for them to buy better equipment than it is for a place like, say, Chicago, USA.
But they slowly invest the income that they do make from their goods/services and they invest that in resources, infrastructure and in education and they now have Filipinos who are capable of installing, repairing and running the equipment, where as before, they had to bring in foreigners to do all of that work and pay a premium for that labor.
in another decade or so, they’ll perhaps have the ability to manufacture that equipment within their own country and they will no longer need to trade for it. When they achieve this, they will be closer to being on par with the rest of the planet.
This is just one sector of one industry, but this is how all emergent markets grow and come to par with the leaders of the world. They need the education, the application of such knowledge and the resources in order to do so and all of those things come with growth, which takes time.
If you don’t believe me, look at China. What was just a few short decades ago an agrarian land of poor farmers is steadily putting more people into the “middle class” than any other country, and that transformation happens through the industrialization and education of the country. No way around that.
I’ve been seeing a lot of uneducated bullshit about minimum wage laws and especially comparing Costco to WalMart and what the shady CEO of Costco said in endorsing a minimum wage increase. No,…
Yes I hate ppl. Bottom line is Wal-Mart can more than AFFORD to pay its employees more they just CHOOSE not to. There isn’t some magic economic reason why costco can do it, they just have an ideology of people over profits. If walmart gave every one of its minimum wage employees a $2 raise they might only take home *gasp* 18.7 billion dollars instead of that 19 they need just to stay alive *eye roll*. High turnover costs walmart far more than it makes them. As far as why it should be mandated by government well that’s because we have history books full of stories about how business choose to treat their employees when there is no minimum wage.
From the figures I’ve seen, Costco makes more revenue per employee and more profits per employee than WalMart. Why don’t you advocate for Costco to give them a raise? You won’t because you’re ignorant, confused and brainwashed.
WalMart can give employees a raise, but they aren’t obligated to do so, just like Costco isn’t obligated to do so. Or the employees can guy a large chunk of WalMart shares and vote at shareholder meetings to alter the company charter so that employees receive a percentage of all profits. Or they can negotiate higher wages. Or they can quit and find another job because they aren’t slaves.
But the reality is that WalMart is free to pay employees whatever it wants and employees are free to accept it or to find another job. If you took your idea of legislating or mandating WalMart to act in a certain way, that same logic can be applied in reverse. WalMart can have laws passed that requires people to work for them right after college for the minimum wage. Because that’s the world you enter into when you start forcing people via government mandate. If you think this would never happen, we essentially do the same thing with car and health insurance right now.
What if the government mandated that you now have to pay more money for everything just so that extra money went directly to fund employee paycheck. Say we made it a 10% added tax on everything that you bought. How would you feel about that? If you agree with it, why don’t you start tipping every single employee a share of 10% of whatever you just spent at their place of employment?
If WalMart could make more money by reducing turnover and paying higher wages, they would have done it by now. But they can’t. Trust me, the largest company on the planet is collectively smarter than you, I or Obama combined. They have thousands of highly educated, highly motivated and very, very well paid corporate guys working in finance, BizDev, and economics. If they could forecast higher profits via higher wages, they would have switched a long time ago.
The problem with the idea that higher wages creates less turnover is that the dummies that advocate such ideas forget that it’s not just the higher wages, it’s the relatively higher wages. That means that if everyone was paying the same as Costco, then Costco’s turnover rate would increase because the alternatives for employment would all of a sudden be greater and more appealing. But Costco enjoys low turnover because their wages are relatively higher. If employees could make roughly the same money or more doing less labor intensive work than what they do at Costco, they’d leave Costco. But Costco has to pay higher wages, some on par with corporate jobs which are considerably higher in skill requirements because if they didn’t employees would leave.
If the minimum wage was increased to $17/hour to meet Costco levels (or is it $21/hour) then WalMart might still have high turnover because all of the alternative employment would still be relatively equal in pay. There would be no wage penalty for leaving WalMart.
Which brings me to my last point, Costco doesn’t advocate that the minimum wage be set at the same wage rate that they pay. Why? Because of what I explained earlier. Then they’d have an increase in turnover and would have to ultimately spend more money or lose profits or pay more to employees. That’s why Costco advocates for a raise in minimum wage, to punish competitors, but cap that raise so that they don’t punish themselves.
I’ve been seeing a lot of uneducated bullshit about minimum wage laws and especially comparing Costco to WalMart and what the shady CEO of Costco said in endorsing a minimum wage increase. No, Costco’s higher wages…
And all of that applies to the wage difference between costco and Sam’s club (owned by Wal-Mart) because???
Because of the sames reasons. Different product offering. Costco carries better quality goods which carry a higher price and have higher margins.
Sam’s Club targets just above WalMart shoppers and just below Costco shoppers. Sam’s Club also tries to target small business owners. In fact, their slogan used to be ”We Are In Business For Small Business”. They dropped that slogan as they tried to capture more of the middle class consumer segment, but they still cater to small businesses.
Hate to go anecdotal on you, but my dad owns gas stations and he never shops at Costco for the stores because they are significantly more expensive, especially for cigarettes, sodas and snacks.
With all of that said, good for Costco for paying employees more, having low labor turnover and so on. But WalMart and Sam’s Club offer a different service for a different demographic of people. We should be happy that we live in such a wonderful world that we have such abundant choices.
Let’s just pretend that it was better for your business to pay employees more money, that doesn’t mean we should mandate it and govern it by federal law. It should still be a choice. If a business chooses to pay less, that’s on them and that’s between them and their employees, who work for them on their own accord.
There are obviously great benefits (and great demand) for selling high quality goods in bulk (Costco) and low quality goods in bulk (Sam’s Club) as well as low quality goods at low prices (Wal Mart). Each of these different business models benefits different demographics. Why would you want to make it so that some of these business models can no longer legally exist? Do you hate people?
I’ve been seeing a lot of uneducated bullshit about minimum wage laws and especially comparing Costco to WalMart and what the shady CEO of Costco said in endorsing a minimum wage increase. No, Costco’s higher wages don’t lead to the company profiting more. And no, Costco didn’t profit more than…
Did you really say that costco caters to a different area of the market than stores like Wal-Mart and then turn around and call them competitors? If they’re not catering to the same areas of the same market how exactly are they competing? Are you implying that companies like say in n out burger and gap also cater to different markets than their “competition”?
Yes I did and yes it makes sense. Put on your learning shoes, you’re about to get learn’d.
WalMart and Costco are in the same industry. They compete within the same market. There is some overlap in customers. But for the most part, they are only indirect competitors.
There are direct and indirect competitors. Direct competitors sell the same product and indirect competitors cater to the same product but usually carry alternative products. You can be a competitor with someone without catering to the same exact market segment.
For example: McDonalds and Islands are indirect competitors. In a vacuum, if McDonalds stopped existing, Islands would gain a part of the business which McDonalds left behind and vice versa. But McDonalds isn’t in direct competition with Islands. They have partially similar products, sure, but it’s not the same product and the segment of the market that they target are different. Most people aren’t debating between a $3 dollar meal at McDonalds or a $15 sit-down meal at Islands.
However, if you can force your market competitors to have to increase prices, you now price them out of their own segments and you force them to shift into more direct competition with you. For example: If WalMart has to pay more for labor, they will either dump some labor or increase prices. If they dump labor, quality of service and/or goods might go down and people might start evaluating alternatives and substitutes. Or if they increase their wage costs, they will then either increase prices to keep margins static or they will lose margins to keep demands static. Either way, it’s not good for the business and might cause them to lose money, go broke or have to shift out of their business model and into a different one.
I could go on, but I don’t care and it’s time to go home so do yourself a favor and go read stuff and things.