Now this is interesting. I attempted to post a comment to one of Bruce Nussbaum’s entries on BusinessWeek and have found that I’ve been “blackholed” (besides the obvious astronomical reference, I can’t help but think of this as a combination of “blacklisted” and “cornholed”). This could of course just be caused by the fallout from all the splog issuing forth onto the net (I’ve sure wasted my time dealing with it), but then again I don’t always agree with his comments so perhaps I really have been… blackholed (I kinda like that noun-to-verb construction).
Oh well, who knows. It’s just as easy to point to his entry, add a trackback (if it takes; trackback spam is a b*tch too) and post my comment here. So here’s a link to what I consider his time-late observation and here’s the comment I tried but wasn’t permitted to post:
This seems a little late, to be honest. A full year ago I found that I was underbidding some design firms in Asia. And around the same time my contacts in China were discussing the issues related to changes in the labor situation.
I believe it’s also been widely reported that the rise of an affluent middle class in Chinese cities has been driving up the cost of agricultural products – with the consequent effect being that the spring from which cheap labor has been gushing is slowing to a reasonable stream. Why leave the farm for some dangerous industrial job far from home when produce is now fetching higher prices at market? Someone has to feed all those people. Is it any surprise that other, recent reports have shown rural farmers gaining the edge in conflicts with the government?
What goes round, comes round.
That works.
I wonder how many other companies are trying to figure out how to deal with these kinds of unexpected, opportunistic invasions of their blog space. As irritating as it is, blog spam is a pretty creative (if selfish) invention. Reminds me of my previous posts where I warn people about how unruly a 3D internet will be. I think blog spam is a long, long way from being the worst we’ll see.
{Edit: I noticed a comment referring to this part of Nussbaum’s blog entry:
And if geography doesn’t matter, why should wages be differentiated on the basis of geography for the same work? Hmm…. That’s a big thought.
I agree with “Sledgehammer”. The reason for wage differentiation seems pretty obvious to me and I’ve mentioned it before (either on this blog or perhaps on the SL Salon): you can’t simply pay an industrial laborer in the third world the same wages as those in the U.S. because it’s likely that this rate will exceed the wages of local professionals… like doctors. Until their entire system is raised to the same standard as the developed world, it’s not likely to be in the long-term interests of that society to encourage the pursuit of the lowest-rung occupations (which would likely be the first to benefit from the developed world’s loving attention). Like most things in life, balance is an important consideration.}
Sorry to be late in getting back to this discussion. Wage
differntiation used to be big in the US. It still is in certain
industries. But wage gaps have generally closed in recent
years, thanks to the mobility of capital and people. We are
now seeing that on a global basis. That’s why wages are
rising sharply in India and China among white collar workers
and even blue collars. They will continue to narrow. Not
close, but narrow. I don’t think they will ever totally close
because there is a cost to distance, the cost of managing
people over time. So India software writer salaries may always
be a bit less than US or Europe counterparts. Or not. We’ll
see. The good news is that living standards are rising in
Asia fast–faster than what anyone anticipated.
As I’m sure you’re aware, wage gaps being reduced inside a country isn’t quite the same as reducing gaps globally. Your blog commentary seems to focus on jobs which benefit from increased globalization. But one problem that arises is that for some occupations – most notably that of local physicians in countries with little or no socialized medical services – compensation is effectively reactionary (i.e. doctors don’t immediately benefit when chip manufacturers suddenly decide to build facilities in their neck of the woods). While it’s true that more Westerners are heading overseas for medical services, by and large I can’t imagine that competes with a corporation setting up a plant and hiring factory labor by the thousands. Consequently, if the calls from some activists were to be mindlessly heeded and blue collar wages overseas raised to reflect those in the U.S. or Europe, that society would suddenly have a dramatic imbalance in their wage system. A CNC-operator might suddenly earn wages comparable to a developed-world counterpart, which might be ten times the wage of a local physician. At some point the physician will of course raise his/her fees, but there will undoubtedly be some lag (and some laborers who can’t afford the higher fees because they’ve been left behind, thus forcing physicians into making some difficult business and ethical decisions). And what job is going to suddenly be all the rage in that society? I’d venture the relatively unskilled but artificially high-paying factory job (similar to how so many Indians decided working the phones was better than getting a degree). Which occupations need to be encouraged? Doctors. Teachers. Engineers. Civil workers helping to build infrastructure. The kinds of jobs that help build a stable political and economic system that can endure over the long term.
Even without responding to social activists, increased wages resulting from external market pressures is still a problem I’d venture. Wage imbalances in some countries could cause problems we simply don’t understand in the West. Do we really want to destabilize some of these countries? I hope not. Even for the sake of improving the employment market for Westerners.
Wages are undoubtedly rising and that will likely continue. And that’s great afaic. But there are more issues than just raising the wages of third world employees working for multinationals – sometimes seemingly done only to make Westerner’s feel better about the stuff they buy. We would do well to remember that simply being there affects their society and their culture. I don’t know of many companies that consider themselves ambassadors of goodwill before they consider themselves beholden to shareholders. It’s even more foreign for me to think of multinationals as champions of long-term prosperity.