A) Discuss the multi-faceted reasons (political, social, etc.) why women in developing countries might be willing to work for lower wages and under more onerous conditions? In today_s global marketplace, women are becoming more recognized as a labor force. In the past, it has always been men who were the breadwinners. Today, due to various social, political, and economic reasons, women are becoming the primary breadwinners in less developed countries. This sounds like an encouraging statistic to woman_s rights groups around the world. However, these women are being exploited, rather than appreciated. They are being exploited by multi-national corporations, which relocate their manufacturing sectors to LDC_s. In the LDC_s, MNC_s are able to find lower labor costs and therefore, lower production costs. _Because it is assumed that women are economically dependent on men, their attempts to gain access to jobs are frequently seen as means to supplement the income of a male head of household. Therefore, the differentials in the wages earned by men and women are often a reflection of the belief that men should earn more because they have families to support, while the latter merely add to the gains of husbands and fathers. (Fernandez-Kelly, p. 88) _Managers justify paying women workers less by imagining that women are merely secondary wage earners in their families. They assume that men -- as fathers and husbands -- are the _breadwinners.' This presumption prevails not just in popular thinking, but in the statistical reports of bodies such as the national census bureau, the World Bank, and development agencies. (Enloe, p. 162-3) There are many other factors that contribute to the exploitation of women. The situation of women in labor markets bears great resemblance to that of migrants. Fernandez-Kelly believes in both cases individuals enter the labor force without a legitimizing ideology that promotes their equitable treatment (p. 88). Migrant workers are restricted in that they are working illegally, therefore they must compromise with lower wages. Women are restricted in the above _breadwinner_ philosophy, therefore, they must compromise with lower wages also. When they acquire jobs, the members of both groups are often seen with suspicion and hostility, as it is presumed that they compete unfairly against the members of a predominantly male working class. Single women are often exploited the most. Managers often see young single women in light of the _marriage factor," which they use to suppress wages. _...the single woman is not a _serious_ member of the labor force because she intends to work only until she finds a husband and _settles down,' supported by him. Therefore, she does not need to be paid as if she were a career worker._ (Enloe, p. 164) This belief by managers is prevalent in almost all LDC_s where MNC_s operate. It is their justification of their exploitation. Women are willing to work for these low wages because they have no other choice. The world is changing rapidly, and many countries are going through the industrial revolution that the US went through in the late 1800_s. However, technology is much more sophisticated, due to the intervention of foreign companies. The men in these LDC_s are often unable to obtain labor positions because they are unskilled. The men that are employed are often educated, and they work in the supervisory-management sector. The unskilled, assembly-line work is left to the women of the country. The older women are unable to fulfill the job requirements because of their lack of stamina, and they often remain at home to raise the family_s children. In most LDC_s, two to three generations live together -- simply as a means for survival. This leaves no one else to be the breadwinner, but the young daughter or wife. No one else is qualified, because the corporations are able to pay women the lowest wages. Since they are able to justify paying young, single women the lowest wages, they are the only ones they hire. And therefore, since the young women are the only ones _qualified_ to be the breadwinners, they must accept their wage and onerous conditions to survive. B) Discuss the effects of this employment pattern on men and women in developing countries. Women are rapidly displacing men in unskilled labor. It is not simply because they are better, not because they are more efficient -- but because they are willing to work for lower wages. They have no choice but to work for low wages, as I have described above. Since corporations are hiring mostly women for manufacturing positions, this is displacing much of the male working-population. Education and skilled labor are not revered in LDC_s as it is in the US. Citizens of LDC_s do not have the opportunity for education to acquire a skill. Many children must begin working when they are still young, simply to provide for their family. Children and young women are being forced by political, economic, and social factors to work for their families. Politically, the governments of LDC_s are encouraging foreign investment because they need the industry, the income, the jobs. Multi-national corporations are taking advantage of the LDC_s low-cost labor and moving their manufacturing sectors to the LDC_s. The primary aspect which LDC_s possess is low-cost labor. Many MNC_s (in the textile, electronics, and apparel industries) are labor-intensive industries. Since labor costs are such a large portion of their expenses, cheaper labor is a huge incentive for MNC_s to relocate. Therefore, the governments of LDC_s work with corporate managers to keep wages low. Economically, LDC_s need foreign investment to survive. Many families do not have enough to eat, and unskilled labor is hard to find. Sons and daughters are too busy working for the family_s welfare to go to school. Therefore, they will too be characterized as unskilled labor. Any job is a blessing, so many young people (with high stamina) are forced into these manufacturing jobs, simply to provide for their families. Socially, there is a problem in historical conceptions. Women in Third World societies have historically been the home-makers and the mothers. They never needed to work outside of the home because they already had a breadwinner, their husband. Many women are enjoying this new found freedom to work. Women now have _the opportunity to earn their own income. Much is made of the fact that women can now spend money on clothes, cosmetics, jewelry and entertainment._ (Fernandez-Kelly, p. 133) Now that women have the opportunity to be the breadwinner, they are able to make their own decisions. This again strengthens women_s freedom, causing another incentive to work. These political, economical, and social factors are changing the workforce of many LDC_s. Many men can be seen in urban areas without jobs. There simply are not jobs available for them. The governments have no money to develop infrastructure-building jobs. It may be possible that LDC_s will begin to develop infrastructure once they acquire enough capital, but to acquire capital, they must allow MNC_s to exploit their women-dominated labor-force. C) Discuss the obstacles facing these women in asserting their rights to form unions and to secure better wages and working conditions. Women are often discriminated against in today_s workplace. Since they have only recently entered the job market, it is difficult for them to get the respect they deserve. Men discriminate against these women because they are displacing them and taking their jobs. It is hard to like someone when they are threatening to your job. However, I see women as a motivating factor, provoking men to enhance their skills to be the most qualified. In third world countries, this is not the motivating behind discrimination of women. MNC_s are simply in negotiations with the government to suppress womens_ and workers_ rights so they will continue to work in under their present conditions. The governments try to keep wages as low as possible. The government must then support whatever the corporations want so they will remain in the LDC. It is very difficult for women in LDC_s to form a union. If they are suspected of aspiring to form a worker's union, they will be fired or punished. They are in desperate need of their job to survive, being fired is their worst fear. Therefore, they often suppress their opinions about their working conditions and go on working under the _iron hand_ of the corporations. Question #2: Free Trade A) Present briefly but carefully the central points of the neoclassical case for free trade. Neoclassical economists believe that free trade is best. It is quite simple to see their argument. If a country is endowed with certain advantages (i.e. technology, land, labor) it should utilize those advantages to their utmost capacity. For instance, let us compare
, which is more efficient in the production of computers, with Mexico, which is more efficient in the production of clothing. Before trade, the US will produce an equal number of units of clothing and computers. The situation is also the same in Mexico, they will produce equal amounts of each. After trade, the US will produce more computers and export them to Mexico in exchange for clothing, which is cheaper to buy from Mexico than it is to produce in the US. Mexico will to the opposite, by producing more clothing, exporting them to the US, and importing computers that are cheaper to buy than to produce. _If people could work in only one industry and occupation, then free trade would indeed preclude maintaining American wages much above (Mexican) levels if (Mexican) workers were as good as Americans . . . But, in fact there are many industries and occupations. If America concentrates its employment in the industries and occupations it does best, American wages can remain far above (Mexican) wages for a long time -- even though the two nations trade freely._ (Blinder, p. 114) Through the previous illustration, it is easy to see that free trade allows for specialization, which in turn leads to an increase in efficiency. This is because as a country becomes more accustomed to producing one product, rather than two, it becomes better (or more specialized) at it. The larger the market, the more _specialized_ it will become. (DeMartino, Oct. 23) This is due to the increased need to produce certain products which the country is more efficient at producing. Another aspect of the Neoclassical view is that wages are directly correlated with productivity (DeMartino, Oct. 30) That is, as productivity increases, wages will increase also. Proof of this philosophy is represented by the United States workforce. US workers are highly productive, due to many factors, and therefore receive higher wages than workers in LDC_s. So in general, neoclassical economists believe that free trade promotes specialization; increases the size of the market and altogether promotes efficiency. B) Present the arguments that are sometimes made in favor of protectionism, and the neoclassical rebuttal to these arguments. Protectionism is a very controversial topic in the US today. High-cost producers, who would otherwise succumb to competition, are able to survive. Most foreign countries today have protectionist policies against the US. That is, they have high tariffs to protect their industries from our lower prices. Three characteristics in support of protectionism are: 1. It is very politically popular. 2. The benefits are concentrated. 3. The consequences are widespread, diffused, and very small per capita. (DeMartino, Nov. 5) Domestic firms and politicians are generally the most supportive of protectionism. Firms doing business here in the US support it because protectionism raises prices of imports, making them more expensive than domestic goods. Therefore, US goods are in higher demand due to lower prices. Politicians often support protectionism to obtain votes. Votes are cast by citizens who are ignorant of the long-term effects of protectionism. They think that it is better to buy American. If foreign products_ prices are lower, people are encouraged to buy foreign products. Therefore, through protectionism foreign products_ prices are higher than American prices and people are encouraged to buy American. When looking through the eyes of the Global Marketplace, protectionism is bad... _First, trade restrictions allow high-cost producers, who would otherwise succumb to competition, to survive. Thus protectionism is a peculiar form of welfare for corporations that not only raises prices to consumers, but also make American industry more slovenly and less productive._ (Blinder, p. 118) The weakest firms and industries are always the ones who cry for protectionism. They cannot compete in the global marketplace due to factors such as: high labor costs, high administrative costs, or high operation costs in general. In other countries it may be cheaper to produce the same product, thus the US firm cries for help from the government so as to make them more competitive. _Second, the costs of protectionism spill over into other industries. Ironically, one factor contributing to the plight of our auto industry in 1981 was that the US government was protecting a variety of industries -- like steel, textiles, and ball bearings -- that sell their wares to automobile manufacturers, thereby foisting high costs on our auto industry . . . the consumer pays for them all._ (Blinder, p. 118) However, many firms are ignorant of this phenomenon. They are more worried about their own well-being, rather than the US as a whole, or even their industry. We must remember that profit is the primary motivation, and your own gain is often a result of someone_s loss. Today_s business world is a cut-throat marketplace, many firms and industries must do everything in their power to stay alive. They cannot look at their long-term positions because they are struggling to survive in the short-term. Many industries are strong enough to look into the long-term (i.e. computers), but many are unable. _Thirdly, foreign nations do not always stand idly by while we protect our industries. When we slapped a quota on textile imports from China in 1983, the Chinese reacted by reducing their imports of American chemicals and farm products. When we raised the duties on specialty steel imported from Europe in 1983, the Common Market countered by imposing trade restrictions on American rifles, burglar alarms, and skis among other things._ (Blinder, p. 119) This shows that protectionism may superficially seem harmless at home, but abroad it is affecting prices of imports. It is all a cycle, showing that protectionism does nothing but hurt the as a whole. Once again you can see that the narrow-mindedness of US firms ends up hurting the economy as a whole. Global competition must be established over a long period of time. We must seek to understand the long-term goals of the global economy. _Finally, the little-understood effect of trade barriers on the value of the dollar may be the most basic reason for rejecting protectionism, for it suggests that we protect some industries only by jeopardizing others . . . Thus, when all is said and done, protecting favored American industries from foreign competition winds up subjecting unfavored industries to even more fearsome foreign competition._ (Blinder, p. 119) To illustrate this phenomenon, I will relate the following scenario. Suppose we are successful in restricting imports. Americans spend less on foreign goods, and so fewer dollars are offered for sale on the world_s financial markets. As the dollar becomes scarcer, its price naturally rises relative to other currencies. At that point the unprotected industries start to suffer,. because a higher dollar makes US exports more expensive to potential foreign customers. American exports then sag. C) Evaluate the debate over protectionism (i.e. is the neoclassical case against protectionism compelling? Why/why not?) I think protectionism will exist into the future. Corporations are very successful at motivating the government to help them profit. Protectionism is also viewed by many as good, mainly because they do not fully understand the global economy. It is very difficult to take a step back and view the long-term effects when we, as a society, live in the short-term. Proof of being a _short-term_ society is seen in our vast exploitation of credit. Americans use credit for everything, from college to lunch -- anything goes. What the US needs to get away from protectionism is Trade Adjustment Assistance. This could entail any of the following: 1. Income Protection (DeMartino, Oct. 30). This would entail a sort of program to keep wages high for American workers, regardless of foreign competition. Global competition would eventually evaporate this program because it would no longer be needed. Global competition will one day make items in Singapore competitively prices with a similar product in the US. 2. Training (DeMartino, Oct. 30). To educate workers to keep up with technology and the workings of the world. Through wide-scale training and education, the problem of ignorant workers would be eliminated. They could then see the bigger picture, the importance of goals for the long-run, and they could see the importance of working together as a nation to promote the economy. 3. Business Adjustment Assistance (DeMartino, Oct. 30). This would entail a program helping to cut productivity costs. Businesses would then be able to compete with the lower-wage factor of LDC_s. This type of program would also evaporate with global competition since wages and prices will eventually equal out all over the globe. That is, if a country is going to be competitive in the global marketplace, they must offer comparable prices and wages (i.e. prices and wages similar to the ones found in the US). 4. Relocation Assistance (DeMartino, Oct. 30). This is necessary for workers to prevent such occurrences as Flint, MI. In an ideal world, free mobility of labor is good. However, it is very difficult for many workers to mobilize from their current locations. Many have families, some are held by family tradition, financial reasons, and culture will always affect mobility. Thus, the government must institute a program to assist in free mobility of labor. It is a difficult program to enact, but could include such aspects as financial assistance, family counseling, and a sort of assistant to help the family adjust to the move (i.e. finding schools for children, finding work for other members of the family). Countries of the world differ dramatically in standards. Some countries believe highly in the family (Mexico), their religion (Israel), or profit (US). What we revere as a goal to strive for may not even be a consideration for another. So foreign countries are going to have to adopt American perspectives to succeed in the new global marketplace. Most likely, a compromise between standards will be met and abided by. Nevertheless, differences in standards complicates free-trade. Global competition will eventually rule the global markets, but protectionism is not the road we need to be on to reach this goal. What must occur is more along the lines of the four points I described previously. If this Trade Adjustment Assistance Policy is employed, we will be driving a Porsche down the highway to global competitiveness.