Kyle Baxter commenting on the recent press calling Apple unethical for employing low cost labor in China:
What we’re seeing in China is what occurred in the Western world during the nineteenth century—a poor country is being transformed into a wealthier, developed country, and that’s what this process looks like. When nations are poor, they compete on the cost of labor, because their workforce is uneducated and unskilled, and that’s what they have.
Conditions are poor during this stage, because reducing cost is the main focus, and because workers have no ability to demand better conditions, because productivity is low and each worker is replaceable. As the economy develops further, worker productivity rises, and wages rise along with it.1 As productivity increases and wages along with it, two things happen: first, workers become relatively more affluent and expect a better standard of living, and second, workers have more leverage over their employer to demand better working conditions.
It’s important to understand this period of economic growth in a nation. It helps us take a look at conventions in the US and understand why they’re outdated: things like unions and overly controlling labor laws.
US workers today live in a nation where they do have the ability to demand better working conditions and fair wages. They don’t need the government to do it for them.
Over time in China wages will naturally rise. Someone will want to compete against Foxconn, and to get the most experienced employees, they will pay them more. Foxconn will have to respond, and over time wages creep up.
Even better, China’s supply of labor will go down over this next generation due to their one child policy. A decrease in supply naturally leads to increased labor costs, which if they play their cards right, should come just as lifestyles are improving and workers begin to be able to demand better conditions.
China will be fine, and we will see this process repeat itself over the next decades as developing nations are tapped for manufacturing.
Manufacturing is not a desired job. It’s mindless and easy to train new low skilled workers, but a society should aspire to something higher. Manufacturing is all a cost game, and one that is not fun to play in.