#subsistence wages

[jtem]

UBER:  Millions of people who wouldn’t be caught dead driving cab doing the exact same work for a lot less money.

[gravitascivics]

YOU WANT TO MEET MY BOSS?

Congress is currently considering foreign trade rules.  The President is asking for authority to extend free trade relations with a broader array of nations, particularly with those of the Far East.  I will not pretend to understand the ins and outs of such legislation; I dare say most Americans don’t either.  But what Americans do understand are the results of past deals such as NAFTA.  Thanks to a columnist in the Indianapolis area, Esther Cepeda,[1] I can report some of the most current consequences of that legislation in that area of the country.

 When I think of Indiana, I think of corn, not a bad thing.  I also think of friends and in-laws.  But what I should also think of is a former industrial area, especially related to the car industry.  As a matter of fact, my wife’s dad was a retiree of General Motors.  While alive, he was proud of that fact.  He oversaw the development of technical manuals and presentations.  But the Indiana and Mid-West he knew is very different today and the process by which those changes took place is still going on in large measure due to trade agreements such as those being considered in Congress.

 Cepeda reports the following:

·        Goodyear, in Akron, Ohio, is building a $550 million manufacturing plant in Mexico.  With that move, the result is fewer jobs in Ohio and more of them south of the border. There, workers will be paid “a pittance;” that is, on average, $200 a month.

·        Mondelez International, producers of snacks (chips, cookies, and the like) will lay off half its workers from its Chicago production plant, taking advantage of the $46 million cost difference between Chicago and Mexico.

·        Ford Motor Company is planning to move its small car production to Mexico in the near future (2018), again resulting in significant job losses in the US.

 She also points out that this type of moves is beyond blaming unions, as differentials outstrip reasonable cost savings and cross over to what observers might call oppressive. Her point is that the benefits to Mexican workers, in our examples, provide almost subsistence wages to Mexican workers.  Let me quote her about how typical defenders term such developments:

During a visit this past June to Juarez, Mexico, I saw firsthand the marvel of these mega-manufacturing facilities, known as maquiladoras as a lifeline to workers.  They said they offer not only steady work at competitive wages but also health insurance (including onsite medical care), on-site K-12 education, professional development, bonuses and transportation to and from work. …

 [Despite this] [f]or many in Juarez, the cost of living far exceeds their pay.[2]

She then quotes a policy researcher who points out that wage gaps have not closed between Mexican workers and those of the US.  He says that Mexicans are making starvation wages and that such treatment of those workers reflects what he terms class attitudes – that lower class people deserve no better. This is far from the image the US wants to project in foreign lands.

 Two postings ago, I wrote of “minimum dignity.”  Such reported moves by American business interests negate any image our nation might want to broadcast to our workers and the workers of the world:  that we, as a people, holding cultural beliefs and a policy bias, have a concern for minimum dignity.  The political, economic, and cultural elites of our federalist union have long demonstrated they have little concern for such dignity. But we the people, maybe because of our innate understanding that our own long term interests are affected, or maybe because we feel a federalist partnership with our fellow citizens, have pushed and passed legislation that at least addresses the issue such as is the case with minimum wage laws.  We seem to be in the afterglow of the Reagan, neoliberal, libertarian era in which the strength of the natural rights bias for individualism seems to have dominated our public policy choices, but is beginning to be challenged – see the Bernie Sanders phenomenon.  But, there is still quite a bit of strength in that view which dictates such moves as reported above, yet another reason for our schools to change their curricular choices, especially when it comes to social studies and civics.

[1] Cepeda, E. (2015).  Factory moves hurt both U. S., Mexico.  The Indianapolis Star, August 10, p. 13A.

[2] Ibid.  Italics added.