collected snippets of immediate importance...


Monday, August 10, 2009

Of course this is nonsense. The overwhelming majority of Americans, along with the overwhelming majority of Haitians and Hondurans, would be absolutely delighted if Haitian and Honduran workers producing clothes for the U.S. market would be paid more. Labor costs are a small fraction of the prices that consumers face. Wages are so low because that yields even more profits for those who already have more money than they can ever spend; the low wage floor is being determined by government policy in Washington, Haiti, Honduras, and elsewhere, not by the desires of consumers. No magic formula of economics determines the minimum wage that can be sustained in Haiti and Honduras. At the margin - whether the minimum wage shall be $3 a day or $5 a day in the export sector in Haiti - it is determined politically. If you say that the leverage of the U.S. consumer market should be used to support higher wages for poor workers in poor countries, rather than the opposite, you're likely to be told that this is not allowed. This leverage has been allocated to something else. The power of the U.S. market can only be used for things like forcing developing countries to enforce the patents, trademarks, and copyrights of U.S. pharmaceutical companies, software companies, and Hollywood.

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