Russell Brand Revolution

[carepov]

I'm not just talking about clothing. A huge proportion of all products we buy are made/grown/harvested by workers in developing countries who make very low wages, wages that Canadians would consider inhumane if any of us made the same wages.

I'm saying, what would happen to our standard of living if ALL products we buy were made/grown/harvested by people making Canadian minimum wage or anywhere close to it? Our standard of living would drop. Our standard of living significantly depends on poor people in developing countries making/growing/harvesting the products we consume for next-to-nothing wages. Again, this is not to mention the natural resources we buy from 3rd world exporters for dirt cheap prices.

Canadian households spent an average of $53,016 on all types of goods and services in 2010.

Shelter: 28.3%

Transportation for 20.7%

Food, 14.0%

Clothing [and accessories]: 6.5%

Health care, 4.1%

Communications, 3.3%.

Other (entertainment, travel, various services, some other stuff): 23.1%

Other than the bolded items, what "huge proportion" of goods would increase in cost?

You are clearly over-estimating Canadian household spending on imported goods and also the amount of imported good from developing countries:

Canada's imports in 2012 were about 30% as large as GDP.

From Which Countries Does the Canada Import Goods?

http://www.investorsfriend.com/Canadian%20GDP%20Canadian%20imports%20and%20exports.htm

All imported goods from "all other countries" account for 0.19 x 0.3 = 5.7 % of Canada's GDP.

[dre]

I'm not just talking about clothing. A huge proportion of all products we buy are made/grown/harvested by workers in developing countries who make very low wages, wages that Canadians would consider inhumane if any of us made the same wages.

I'm saying, what would happen to our standard of living if ALL products we buy were made/grown/harvested by people making Canadian minimum wage or anywhere close to it? Our standard of living would drop. Our standard of living significantly depends on poor people in developing countries making/growing/harvesting the products we consume for next-to-nothing wages. Again, this is not to mention the natural resources we buy from 3rd world exporters for dirt cheap prices.

Its true that if we didnt exploit sweatshop labor a LOT of the things we buy would cost way more. BUT... we would also have higher wages, and more purchasing power, and we wouldnt be facing a crunch trying to purchase things like education and healthcare here at home.

[Moonlight Graham]

Canadian households spent an average of $53,016 on all types of goods and services in 2010.

Shelter: 28.3%

Transportation for 20.7%

Food, 14.0%

Clothing [and accessories]: 6.5%

Health care, 4.1%

Communications, 3.3%.

Other (entertainment, travel, various services, some other stuff): 23.1%

Other than the bolded items, what "huge proportion" of goods would increase in cost?

You are clearly over-estimating Canadian household spending on imported goods and also the amount of imported good from developing countries:

Canada's imports in 2012 were about 30% as large as GDP.

From Which Countries Does the Canada Import Goods?

You're clearly failing to understand how many things are made in developing countries.

- Shelter: many materials made to build homes, and the tools to build them, are made in developing countries.

- Transportation: many if not most of the components in our vehicles are made in developing countries

- Food: coffee, sugar, many fruits etc. grown in developing countries

Even items imported from the US and US companies contain many components made in developing countries. I've made my point, it's easy to understand, I can't be any clearer. I will not continue my argument.

If you don't believe me, pick 10 random things in whatever room you're sitting in right now and look at their tags to see how many of them are made/manufactured/grown in developing countries.

[Moonlight Graham]

Its true that if we didnt exploit sweatshop labor a LOT of the things we buy would cost way more. BUT... we would also have higher wages, and more purchasing power, and we wouldnt be facing a crunch trying to purchase things like education and healthcare here at home.

Please explain what I bolded, I don't quite understand.

[bleeding heart]

Canadian households spent an average of $53,016 on all types of goods and services in 2010.

Shelter: 28.3%

Transportation for 20.7%

Food, 14.0%

Clothing [and accessories]: 6.5%

Health care, 4.1%

Communications, 3.3%.

Other (entertainment, travel, various services, some other stuff): 23.1%

Other than the bolded items, what "huge proportion" of goods would increase in cost?

You are clearly over-estimating Canadian household spending on imported goods and also the amount of imported good from developing countries:

Canada's imports in 2012 were about 30% as large as GDP.

From Which Countries Does the Canada Import Goods?

http://www.investorsfriend.com/Canadian%20GDP%20Canadian%20imports%20and%20exports.htm

All imported goods from "all other countries" account for 0.19 x 0.3 = 5.7 % of Canada's GDP.

Well, not exactly. What percentage of the goods imported from the United States are manufactured, grown, or made in other countries? that is, how much are we buying from US the builder, and how much from US the distributor?

Because every bit that falls into the latter category is effectively "from elsewhere," and complicates your response somewhat.

{edit: whoops, I see MG already made this point.)

Edited November 8, 2013 by bleeding heart

[dre]

Please explain what I bolded, I don't quite understand.

Globalism has created two different economies... one is made up of people that are facing huge global competition. Manufacturing workers, computer programmers, call center employees, IT workers etc. The other is made up of domestic workers that are naturally isolated from global competition. healthcare workers, doctors, dentists, educators etc. Competition has put downward pressure on the wages of the former group, but the latter group is still seeing strong wage growth.

Its becoming harder and harder for one group to purchase goods and services from the other.

[TimG]

Its becoming harder and harder for one group to purchase goods and services from the other.

Especially since the money to pay the latter comes from taxes on the former.

[dre]

Especially since the money to pay the latter comes from taxes on the former.

Yes thats a good point, especially for healthcare and education where the government is the payer.

[carepov]

- Shelter: many materials made to build homes, and the tools to build them, are made in developing countries.

I call BS on this claim.

- Transportation: many if not most of the components in our vehicles are made in developing countries

I call BS on this claim too.

If you don't believe me, pick 10 random things in whatever room you're sitting in right now and look at their tags to see how many of them are made/manufactured/grown in developing countries.

Drywall-Canada

Paint-USA

Wood-Canada

Computer-Taiwan?

Cell phone-S.Korea

Cement-Canada

Paper products-Canada

Carpet-USA

Light bulbs - China?

Furniture - Canada

Besides, two thirds of our economy are not "things" they are "services".

I agree that some stuff would cost more if developing world wages were higher - I disagree that this would negatively impact our standard of living.

You said: "Our standard of living is rising on the backs of the world's poor." You've attempted to justify this claim by saying that we have a high standard of living due to cheaper goods produced in developing countries. I challenge you to find any international development report that links "standard of living" to cheap goods. Ask yourself, aren't the same cheap goods available in Canada, Mexico, Romania, Kenya, and Bangladesh? Why then is there such a variation in "standard of living"? (note: I understand if you choose not to continue your argument)

Edited November 8, 2013 by carepov

[carepov]

Well, not exactly. What percentage of the goods imported from the United States are manufactured, grown, or made in other countries? that is, how much are we buying from US the builder, and how much from US the distributor?

Because every bit that falls into the latter category is effectively "from elsewhere," and complicates your response somewhat.

{edit: whoops, I see MG already made this point.)

Even if everything that we imported from the US was itself imported from another country, the amount of goods from developing countries would be insignificant:

http://www.census.gov/foreign-trade/statistics/highlights/top/top1308yr.html

[bleeding heart]

I wasn't really arguing the case. I only thought the relative imports from the US vs others wasn't necessarily quite accurate.

[Michael Hardner]

Therefore, if we paid all workers who made our products what Westerners would consider humane wages (let's say $8 US an hour) and had these workers working within humane working conditions (ie: factories that weren't sh*t-holes), many if not most of the products Canadians and other Westerners buy would cost more therefore we could afford to buy fewer and/or poorer quality products. This means that our standard of living would go down.

Humane working conditions appear to come with better trade, as do wage increases. How else would these things come about ?

[dre]

Humane working conditions appear to come with better trade, as do wage increases. How else would these things come about ?

These things have been improving for hundreds of years, trade is only one factor. What REALLY improves working conditions is political freedom.

And if you are throwing that out there as a reason to trade, then we could greatly optimize that as a result. We could use our patronage to put a lot of pressure on countries like China to provide greater political freedom, better standards and working conditions, and higher wages. In many cases though we do the exact opposite. We try to increase our corporate profits by encouraging even cheaper production, lower wages, and play parts of the global supply chain against the other. If China REALLY undertook reforms to improve the lives of workers, we would immediately leave and set up shop somewhere else.

Edited November 8, 2013 by dre

[Michael Hardner]

I'm not just talking about clothing. A huge proportion of all products we buy are made/grown/harvested by workers in developing countries who make very low wages, wages that Canadians would consider inhumane if any of us made the same wages.

Let's keep in mind, though, that there's also a price disparity to match the wage disparity.

[Michael Hardner]

These things have been improving for hundreds of years, trade is only one factor. What REALLY improves working conditions is political freedom.

The power of the individual includes political and economic power.

And if you are throwing that out there as a reason to trade, then we could greatly optimize that as a result. We could use our patronage to put a lot of pressure on countries like China to provide greater political freedom, better standards and working conditions, and higher wages.

I agree with this absolutely.

If China REALLY undertook reforms to improve the lives of workers, we would immediately leave and set up shop somewhere else.

The idea is to incentivize improvements, though. Creating positive momentum for change is difficult, and doesn't get the attention it needs.

[GostHacked]

Please explain what I bolded, I don't quite understand.

If you move a factory from Canada to China as an example there are a few things going on.

1 - Newly unemployed people are now competing for jobs in the same field, but will make much less. Some will never find another job in that field.

2 - With less money is less purchasing power. Prices go up, wages are going down.

3 - With the less money , you can only afford these products made by cheap, and well, slave labour.

4 - Government cannot tax that company as much because things are moved overseas.

5 - Government cannot make as much money from people for they are paying less tax because of a lower income bracket.

All this drives the wage down here to the point where we can only afford products made by cheap labour overseas. There is NO net benefit to society as a whole, only to the CEOs and shareholders of those companies constantly off shoring and outsourcing. Companies will cut costs where they can. But prices will never come down because of it.

[GostHacked]

I call BS on this claim.

The flooring I helped out at a friends place... made in China.

The hammer I bought recently, made in China.

Most of my tools, made in China.

My PC and electronic gear, made in China.

Some of my other tools came from Taiwan.

I would say 90% of what I currently own has not been made in North America.

In many cases even the label 'Made in Canada' is misleading because part of it might be made or assembled here, but some would be made abroad.

[dre]

I would say 90% of what I currently own has not been made in North America.

I did a quick survey of the things here in my office....

1. Desk - Made in China, assembled by me.

2. Asus i7 laptop - Made in China

3. Seagate NAS storage device - Made in China

4. Klipsch 5.1 pro-media sound - Made in China

5. Clay Coffee cup - Made by local artisan.

6. Filing cabinet - Made in China, assembled by me.

7. Asus 24" lcd - Made in China

8. King Cobra golf clubs - Made in China

9. 1/2 bottom of Glenfiddich - Made in USA

10. Can of Maxxel - Blast away - Made in USA.

There is NO net benefit to society as a whole

This a much harder claim to either make or debunk. Theres no question that globalism has resulted in a glut of dirt cheap non durables. Things like computers which used to be luxury items are now available to almost everyone.... its hard to quantify the value of that. Same thing goes for clothing and textiles.

Overall globalism has created a surplus of "stuff" in North America. People unquestionably have more of this "stuff" than they would have without trade expansion.

The whole cost benefit analysis is complex. You somehow have to weigh the increased availability of cheap desirable goods, with the net loss of productive activity, and the inflation in domestic pricing VS deflation in imports, and the damage to our political system caused by concentration of wealth and political power.

I think that balanced trade between nations that have similar standards of living and wages, and levels of subsidization is fine. Trade between nations with dissimilar standards of living and wages and levels of subsidization can also be find as long theres tarrifs and restrictions to prevent large trade imbalances.

Whats dangerous is either purist free trade or protectionist ideology.

Edited November 9, 2013 by dre

[TimG]

I did a quick survey of the things here in my office....

All likely purchased over several years. What percentage of your yearly income goes to purchasing products made in China? Most of your food does not. Taxes pay for services provide locally. Rent is a locally provided service too.

That is why carepov's numbers make sense.

[carepov]

I would say 90% of what I currently own has not been made in North America.

Do you own a house?

-Heavy equipment (excavator, cement mixer)- made in NA

-Concrete for foundations - made in NA

-Wood for framing - made in NA

-Bricks - made in NA

-Shingles or other roofing material- made in NA

-Rebar and steel - ??

-Drywall - made in NA

-Paint - made in NA

-Insulation - made in NA

-Copper pipes - made in NA

-Furnace/AC - made in NA

-Hot water tank - made in NA

-Ducting - made in NA

-Windows - made in NA

-Kitchen cabinets and countertop - made in NA

-Carpet - made in NA

-Doors - Made in NA

-Hardwood floors - made in NA

-Bathtubs - made in NA

-Sinks, toilets - made in China

-Electical panel and breakers - made in NA

-Wiring - ?

-Appliances - ?

-Plumbing fixtures-made in China

-Lighting - made in China

-Screws and hardware - made in China

Do you own a car? - Made in NA/EU/Japan (yes including most parts)

While this is a fun game, (kind like I spy with my little eye - some thing that was made in Canada), think about the big picture:

-The value of all goods and services produced in Canada is our GDP.

-Imports are 30% of GDP

-62 % of imports are from the US

-19 % of imports are from all developing countries combined including China

And no, the USA is not a "distibutor of Chinese imports": US imports are 16% of their GDP and 19 % of US imports are from China.

[carepov]

These things have been improving for hundreds of years, trade is only one factor. What REALLY improves working conditions is political freedom.

Yes. As per Amartya Sen:

http://en.wikipedia.org/wiki/Development_as_Freedom

And if you are throwing that out there as a reason to trade, then we could greatly optimize that as a result. We could use our patronage to put a lot of pressure on countries like China to provide greater political freedom, better standards and working conditions, and higher wages. In many cases though we do the exact opposite. We try to increase our corporate profits by encouraging even cheaper production, lower wages, and play parts of the global supply chain against the other. If China REALLY undertook reforms to improve the lives of workers, we would immediately leave and set up shop somewhere else.

Here you loose me. Life is very much improving in China. It would be difficult in fact to think of an example of a more dramatic increase in the stanadard of living of any country than that of China in the last 30-40 years.

[eyeball]

The whole cost benefit analysis is complex. You somehow have to weigh the increased availability of cheap desirable goods, with the net loss of productive activity, and the inflation in domestic pricing VS deflation in imports, and the damage to our political system caused by concentration of wealth and political power.

And then there is the draw down of natural capital and damage to our environment to factor in.

I'd say the standards of living start with the quality of the living conditions, many of which are becoming deplorable in some of the most 'productive' countries.

[Michael Hardner]

If you move a factory from Canada to China as an example there are a few things going on.

1 - Newly unemployed people are now competing for jobs in the same field, but will make much less. Some will never find another job in that field.

2 - With less money is less purchasing power. Prices go up, wages are going down.

Huh ? Prices go up how ?

3 - With the less money , you can only afford these products made by cheap, and well, slave labour.

4 - Government cannot tax that company as much because things are moved overseas.

5 - Government cannot make as much money from people for they are paying less tax because of a lower income bracket.

It's all zero sum, what you're saying.

The fact is that there are more customers for goods overseas, and fewer barriers to trade in another industry - so employment shifts to that industry. Furthermore, consumers in both countries benefit from a reduction in prices - and e

All this drives the wage down here to the point where we can only afford products made by cheap labour overseas. There is NO net benefit to society as a whole, only to the CEOs and shareholders of those companies constantly off shoring and outsourcing. Companies will cut costs where they can. But prices will never come down because of it.

[Michael Hardner]

And then there is the draw down of natural capital and damage to our environment to factor in.

I'd say the standards of living start with the quality of the living conditions, many of which are becoming deplorable in some of the most 'productive' countries.

I think the paradox is: when people are wealthier, they consume more which impacts the environment.

But is the argument here shouldn't be to keep people poor, so that the environment isn't impacted. The balance in between prosperity and consumption is what we need to find in ourselves, and in our own culture.

[GostHacked]

Huh ? Prices go up how ?

I am surprised that this is a question.

It's all zero sum, what you're saying.

Not at all, it's a net loss.