Fwd: Re: [saymaListserv] Fwd: Globalization and the Poor: Do Quakers have a realistic view of world poverty?

Janet Minshall jhminshall at comcast.net
Sat Apr 2 19:19:57 JEST 2005


Hi Again Bill Reynolds, I will answer your question about 
documentation of my commments in my 3/28 message concerning 
globalization and outsourcing and how the companies which go abroad 
"most usually pay significantly better wages, provide better benefits 
and combat sexual, class and cultural/tribal/caste discrimination 
more effectively than do local employers in the countries where they 
send their work".

First I have to tell you that I have read examples which illustrate 
this cause/effect relationship for many, many years. I don't have 
access to a good academic economics library to go back and find the 
chain of articles that lead me to my conclusions but it exists. 
However, my primary interest is in reading and writing popular 
political economics and so I am familiar with the location of current 
detailed commentary from that area which is relevant to your 
question.  All of the academics who write for a popular audience 
about the economic areas that most grab my attention, my head and my 
heart, do also provide the necessary footnotes so I am able to 
respond to your question with references which have extensive 
footnotes.

The examples which you seek are actually in the two books I 
referenced in that last message - In Defense of Globalization by 
Jagdish Bhagwati and Why Globalization Works, by Martin Wolf.  Of the 
two, Bhagwati's book is more responsive in many ways to the concerns 
of anti-globalizers than is Wolf's. In general, he gives details from 
a longer perspective in economic history, which may be the result of 
his being older.  In Chapter 1, pg. 10, "Anti-globalization, Why?" 
Bhagwati begins telling the history of the current anti-globalization 
movement from his perspective.  Read it.  It is short and to the 
point and provides continuity between anticapitalism as a Socialist 
focus before the wars to antiglobalization as a wider focus after the 
wars.  Both Bhagwati and Wolf get carried away from their reader's 
interests at times by pedantic concerns or repetitiveness, but they 
are both worth reading.

Bhagwati starts his comments relevant to your question with the first 
intensive efforts at globalization and outsourcing after WWII -- in 
Japan.  All of us over 65 recall that after WWII, suddenly we in the 
US began to be inundated in the stores with articles made in Japan. 
That was the result of the efforts made by the US and its allies to 
bring their two major foes during the war, Japan and Germany, back to 
economic and political equilibrium to minimize the possibility of 
further wars. Indeed, from WWII on, increasingly, economics became 
the focus of the same competitiveness and passion as armed conflict 
and the coveting of another's land and military had been up to that 
time.  As a result of Marshall Plan type economic development, Europe 
became the major market for Germany and the US became the major 
market for Japan.

Bhagwati cites the importance of the exchange of management personnel 
and the exchange of students to and from Japan as being one of the 
most effective steps in post WWII globalization efforts. In his 
Chapter 7, pg.73-74-75, "Women: Harmed or Helped?" Bhagwati uses that 
exchange as an example of the beginning of the emancipation of women 
in Japan.  Japanese male executives were first sent to the US with 
their wives and children.  Wives saw how women lived, worked and went 
to college in the US and began slowly pressuring for similar 
opportunities in Japan, as did the wives of college and graduate 
students after they returned home. (Remember that now, in 2005, many, 
many more countries where multinationals are operating are sending 
their foreign executive personnel with their families to live and 
work in the US for awhile, and 60% of the students in US graduate 
schools are foreign students who often bring their wives and children 
along, just as the Japanese did).

Similarly, Japanese men learned back then during their time in the 
US, and continue to learn more significantly over time that the old 
habits of paying women lower wages for the same work that men did was 
no longer acceptable.  They have learned that "prejudice has its 
price: any firm that indulges in it is going to be at a competitive 
disadvantage to firms that hire without this prejudice....Now if 
there is a closed economy and all domestic firms share this prejudice 
(and pay women a lower wage) all firms will be equally handicapped. 
But when we introduce foreign competition, the foreign firms that do 
not share this prejudice will be able to gain in competitiveness 
against domestic firms....Liberalized trade which enables foreign 
firms to compete with domestic firms in open markets, therefore, puts 
pressure on domestic firms to shed their prejudice. The gender wage 
gap will then be reduced in industries that must compete with imports 
produced by unprejudiced firms elsewhere."

This same principle applies even more widely now, both in regard to 
multinationals who move production abroad to take advantage of a 
lower wage structure and to the process of outsourcing to cheaper 
labor markets. Multinationals and outsourcers have easy access to 
traditional domestic labor forces as long as they they pay somewhat 
higher wages and provide equal wages for equal work. In the rest of 
the globalizing world both women and minorities in countries whose 
producers have traditionally paid lower wages on the basis of sexual, 
class, caste or color prejudices are experiencing a progressively 
rising wage scale and a higher standard of living.  If a woman or 
minority worker's current domestic employer won't pay them adequately 
they can go to the other side of town, or even move to the outskirts 
of a nearby city, and work for a higher wage for a multinational or a 
domestic company with an outsourcing contract.  To counter the loss 
of trained laborers in this manner, domestic producers must adjust 
their wages and their discriminatory hiring and benefits policies to 
retain their workers. This opening up of foreign labor markets 
ultimately produces the impressive statistics I cited in my first 
message about the significant and continuing reduction of world 
poverty in those countries which are in process of globalizing. 
Janet Minshall




Date: Wed, 30 Mar 2005 12:11:45 -0500
To: CIsland at aol.com
From: Janet  Minshall <jhminshall at comcast.net>
Subject: Re: [saymaListserv] Fwd: Globalization and the Poor: Do 
Quakers have a realis...
Cc:
Bcc:
X-Attachments:

Hi Bill Reynolds, Thanks for your question.  I'm in the midst of a 
medical emergency right now but will respond as soon as I'm able. 
Janet




Bill Reynolds wrote on 3-29-05:

In a message dated 3/28/2005 9:19:47 A.M. Eastern Standard Time, 
jhminshall at comcast.net writes:

Our companies which outsource most usually pay significantly better 
wages, provide better benefits and combat sexual, class and 
cultural/tribal/caste discrimination more effectively than local 
employers in the countries where they send their work.

Janet,

I would like to see two or three specific examples of companies 
outsourcing as you describe here with some concrete detailed examples 
of how they accomplish these various ideals.  Such detailed examples 
would make these points more real to me.  Thanks,

Bill Reynolds

"Truth often suffers more by the heat of its defenders, than from the 
arguments of its opposers." - William Penn
[I have added this quote to my signature setting. I did not attach it 
for you or anyone else in particular but simply for general 
awareness.]
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