Someone tell me how "Free Trade Agreements" are a good thing?

[GRUNHERZ]

GRUNHERZ: CEO pay is out of control, especially when such high pay is not met with peformannce.

No, its not. It's a private matter for the owners of that company. If they are willing to share more of their profits with a manager, why do we care? If you hold shares, youc an vote them to lower the CEO's salary and raise your dividend. Why should the workers care who gets that money anyway - the owner or the manager?

Of course I agree CEO compensation is a matter for the shareholders and board to decide however by my own value system and my own way I would run a business if performance is poor pay should match.  Too many proprety rights like guaranteed high pay or too much security lead to stagnated performance and reduce entreprenurial risk taking at all levels of a business including the top management team. I'm looking at it from a business perspective, where it may impact workers is from a morale standpoint but thats a different subject all together.

[ra]

Originally posted by Animal

Take Nike, for example. They are already a hugely profitable company, earning more than 1000% of the cost of manufacture their products.

These products, of cheap materials to begin with, are manufactured overseas by workers who get paid the equivalent of $1 a day, minus $.25 daily for food, if they want to eat during their 12 hour shifts. You see, Nike employees are not allowed to bring anything into the factory, including food, for fear of contraband, just as they are checked when they leave. The food they eat must be purchased at the factory for one third their daily pay. Each worker makes aproximately 40 pairs of shoes daily, at a cost of aproximately $5 each in materials. This product is then sold by Nike, to us, at a price of aproximately $100. For $.75, that worked made Nike aproximately $3,000 in pure profit.

They have been doing this for years. Their prices are still absurdly high - their product costs the same now as it did ten years ago.

Do you consider this ethical? moral?

This is neither ethical nor moral.  It is fantasyland.  If you believe that any company can make this kind of profit producing a product in an industry as competitive as shoes, you live in fantasyland.

ra

[Urchin]

Man, I'm probably gonna get ripped for saying this, but I don't much give a damn about the third world workers that are making $.25 a day making shies for Nike.  Or rather, I care about them in the context that if Nike has moved overseas just to avoid paying Americans a decent wage, then they should be forced to pay the Vietnamese or something a comparable wage- simply to discourage the company from moving.

I'm not smart enough to care about the whole world.  I can't see cause and effect for the whole world.  I can see cause and effect in America, or at least the more obvious things.  

And Grun, sorry I stopped responding last night, I went to bed lol.

"This is scary and unproductive thinking. But lets say you did implement it, where would you put the cap on socially acceptable income? "

That is a tough question.  For me, basic human dignity requires enough money for a house (or some sort of shelter), some form of transportation (either a good mass transit system or a car), and a job that pays well enough to support the first two.  Furthermore, I'm of the opinion that as more parents are being forced to work longer hours (and typically both parents are working), the kids are being rather neglected in some important areas.  I'm not sure if this is why our society seems like it is going to hell in a handbasket or not, but it sure seems like it is part of it.  So I'd also like to further limit the job statement by saying it should pay enough for shelter and transportation, and leave enough money so one worker could support a family.

"Also how would you incentivise capable entreprenours to start their own businesses and create jobs if their own income or ownership stake (wealth in stock equity) was artificially limited. "

Good question, and one that I can't answer.  

"Fourther how would you stop these people from leaving your area to go elsewhere and start their business in an area with no such restrictions."

Well this one wouldn't be that hard.  Selective tariffs would discourage industries from picking up and moving.  By selective I mean that if an industry was in the region before (county, state, country, whatever), and picks up and moves to some other country then that businesses goods would be taxed at a higher rate than some other business who had never been established here.  You can't just *stop* the owner from moving out, but you can discourage him.

"In the same light how would you stop job seekers from following them there? Restrict immigration rights?"

I think you mean emigration, and I hadn't much thought about it, to be honest.  I'm all for limiting immigration though- until we have enough jobs for the people in this country, we don't need to import more people.  And I'm also very much in favor of strictly enforcing illegal immigration laws.  If you are born here, and your parents are citizens, then you are a citizen.  If you are born here, and your mom is a Mexican in the country illegally- whoops... you are a Mexican, and you are going home with your mother.  Schoolkid in the country illegally?  Well, sorry lad, but we are shipping you and your family back to Guatemala, you can go to school there.  We don't have the money to provide a decent education to all the kids we have now that are here legally, we damn sure can't afford to spend money on kids that are here illegally.

[miko2d]

Urchin: I'm not smart enough to care about the whole world.  I can't see cause and effect for the whole world.  I can see cause and effect in America, or at least the more obvious things.

 US benefits greatly from getting goods for less effort and getting a greated return on capital than is possible internally. Even if Nike does not lower the price of shoes, the shareholders get more money to spend, etc.

I'm all for limiting immigration though- until we have enough jobs for the people in this country,

 Unemployment in this country is a direct result of government-imposed restrictions on employment. It has no relation to immigration. Countries with no immigration often have high unemployment rates.
 At the same time there was no persistent unemployment in US througout 18 and 19 centuries despite massive immigration.

 miko

[GRUNHERZ]

http://www.fortune.com/fortune/investing/articles/0,15114,538834-1,00.html

[capt. apathy]

US benefits greatly from getting goods for less effort and getting a greated return on capital than is possible internally. Even if Nike does not lower the price of shoes, the shareholders get more money to spend, etc.

well that depends on who you are talking about when you say "the US",  if you are talking about people with money, whos earnings will increase as the corperations send the jobs overseas.  sure higher divedends and lower prices are great for 'that america'.  plus it makes it really easy to find someone to do work around your house for next to nothing, what with all the unemployed and all.

but if you're talking about the US I live in, where the vast majority don't have any money left over after paying bills to even have to wonder what stocks are paying what kind of divdend.   that america is getting screwed by these unfair trade practices.

really, what good does it do the guy who's factory closed down to learn how much better off he is now that nike stock pays good divedends and VCR's are down to $35, when he and his wife, live in the back of a stationwagon with their kids.

our gov't is suposed to look after the best interest of the majority of americans.  but more often than not they look after the wealthy,  maybe not even intentionally, but just because those are teh people they know, and thats who they think of when they think of americans.

the majority of americans will never make 50k in one year.  the majority of americans never held more than a couple thousand of their own money.  many many americans never held more than a couple hundred of their own money

the majority of americans aren't getting representation by our gov't.  most of our people that are benifitting from these trade practices never met an average american (unless they came over to clean their house)

I wonder some times how long it will be before they just admit dollars are more valuable than people.  we'll probably be voting on a sort of proxy system-  you get one vote at the polls for every dollar of net-worth

[GRUNHERZ]

And destroying the economy by restricting international trade will help the average american!!!

BTW whats with you left wingers and this refusal to let go of the 19th century view of class struggle?  How come you dont realize that such a perspective led to the horrible failiures of 20th century socilism/communism - which utterly failed at it's central principle of equitable wealth distribution not to mention all the grotesque crimes against humanity.

And this idea tht government only looks after yhje intrestys of the waelthy is utterly ridiculous. If this was the case why are unions legal, why are there minimum wage laws, why is there socila security, why is there unemployment benefits, why is there a progressive income tax, why is there anti trust legislation, why is there consumer safety legislation, why is there workplace safety rules and OSHA? Why?  It can be argued that any of these disproprtionately imapct the "wealthy" (BTW define wealthy please) and reduce their income while giving back little in government services they would use. Does somebody who pays $50,000 in income tax really get that much back in services? On the other hand somebody paying nothing in income taxes probable is elligible for welfare or other govt benefits that clearly exceed their tax contributions.

Now please dont answe that the only reasons these provisions exist is because some people had to fight for these rights or had to pressure poiliticans to get them, also please dont say that there are political factions opposed to these programs - why not?
Because saying either of those things will destroy your argument that government serves only the rich - because obviously the very fact that these laws were created though the political process and the fact that "wealthy" opposition groups are not succesful in repaealing them en masse measn there is a competition of ideas in governmet and so a cometrion of intrests. Not just one monolitic evil favoring only one fcation.

[Fatty]

You can allow the US companies to take advantage of the cheaper labor, or you can allow companies from countries with cheaper labor to take the market from US companies.

Either way, the jobs are going to go.  The great 'buy american' patriotic scam of the 70s and 80s isn't going to work.  Might as well keep some of the jobs by allowing US companies to operate overseas.

As for the exploited countries...ask India how terribly they have been exploited.  Could third world countries be improved faster?  Absolutely, but don't try and tell me someone with a job in a third world factory is worse off than if that factory not there and they didn't have the job.

[Thrawn]

Originally posted by miko2d
Why should those companies pay extra money to increase the welfare of those workers? Why shouldn't any people with extra money pay for it?
 Let them earn $.25 from Nike and get subcidy from whovever else is charitable. No reason to forbit Nike to offer a job at $.25.

In order to maintain demand, or face a boycott.

But, obviously, if corporations were allowed to do whatever they wanted, our world would go to hell.

Exactly, the best way to make the corporations change is to boycott their products until they do.

[Torque]

Originally posted by Fatty
You can allow the US companies to take advantage of the cheaper labor, or you can allow companies from countries with cheaper labor to take the market from US companies.

Either way, the jobs are going to go.  The great 'buy american' patriotic scam of the 70s and 80s isn't going to work.  Might as well keep some of the jobs by allowing US companies to operate overseas.

As for the exploited countries...ask India how terribly they have been exploited.  Could third world countries be improved faster?  Absolutely, but don't try and tell me someone with a job in a third world factory is worse off than if that factory not there and they didn't have the job.

Fatty u anus.

True but the polution laws are very lacks which is another big perk and govn't enforcement of any controls is nonexistent at best, just look what they get away with around here. Seems they'll have a good short term monetary gain to improve living conditions but who's to say about long term effects on the health of the workers and locals and if that long term cost out weights the short term gain.

But the other day for $20 CDN i bought two outdoor fixtures for the house, heavy cast iron with bevelled glass inserts the old english stlye, i'm looking at the fixtures shaking my head thinking how the fek can they do this, but then quickly i thank the Lord unions haven't reached the third world yet, cynical but true.

[miko2d]

capt. apathy: but if you're talking about the US I live in, where the vast majority don't have any money left over after paying bills to even have to wonder what stocks are paying what kind of divdend.   that america is getting screwed by these unfair trade practices.

 You are totally ingoring most of what I say, so I will try it one last time and give up.

 A country cannot take a market from another country in a free trade environment. There is always an exchange of goods of equal value betwee the countries.

 The poor workers in US benefit from cheap imports because it creates more and better-paying jobs in US due to raise in real wages.

 The reason why the workers who lost jobs to foreign competition cannot find better jobs quickly or at all has nothing to do with a free trade.
 The most severe limitation on free trade in recent history was Smoot-Hawley tariff act in 1929. Did we have a great increase in employment in the next decade?

 If you care to discuss every particular point listed, youa re welcome. If you will just parrot teh same line without even reading them you are welcome too.

 miko

[Sixpence]

Originally posted by miko2d
You are totally ingoring most of what I say, so I will try it one last time and give up.

 miko

Lol, no you won't

[GRUNHERZ]

The most severe limitation on free trade in recent history was Smoot-Hawley tariff act in 1929. Did we have a great increase in employment in the next decade?

Urchin needs to study the effects of this tariff regime...

[capt. apathy]

The poor workers in US benefit from cheap imports because it creates more and better-paying jobs in US due to raise in real wages.

I do understand the point you are trying to make about 'real wages'  as in the fact that your dollar would buy more goods as they become cheaper making the dollars you have worth more.  it's all very logical and a sound theory.  it probably works out nicely when you take things like average costs, and average income and feed it into an algabra formula

the big problem that occures when reality slams into your theory is, the things that are becoming cheaper through what you are wrongly calling 'free trade'** mostly things that we buy with what money we have left over after we've bought what we need,  while things like healthcare and a place to sleep just keep going up.

also where are these 'more and better paying' jobs comming from?  if we aren't hiring people here because we can do the work elswhere in a unregulated environment, and then sell them here where people have the money then exactly what are your workers here going to be doing?   yes some jobs will be made, there will be the service jobs selling the cheap products to those who can afford them,  and the upper management jobs at these corperations.  
  this type of policy looks good on paper.  average income may go up.  but it's the wealthy getting very wealthy and workers being unemployed.   what are the working class jobs created?  
  by your formula things look pretty good in in theory

at a minimum wage job today(if you can get one that will let you work 40 hours) you can buy 7 or 8 vcr's with one weeks wages (before taxes).

at the end of the 70's you would have had to save your whole check (again, with no taxes removed) for 2 or 3 weeks to get 1 vcr.

so far so good.
the problem is when you start pricing things that you truly need.  because if I have no money for healthcare after spending all my money on food, and rent then the price of things like vcr's, dvds, big screen tv's, and BMW's is not exactly relivant to my economy.

in the late 70's you could rent an apartment or small house for about 1 week of minimum wage pay.
now it takes 2 weeks pay(if you are extremely lucky and have no standards) and the places are smaller, closer together and have no yard.


** again, it is not free trade when one manufacturer is legally required to incure costs that his competitors are not.  and since we are not willing (and rightly so) to do away with basic human rights, or even the very minimal environmental and workplace protections we already have,  and we have no legal right to tell other countries how to live, the only way you can get true free trade is to add in the estimated costs these regulations add to the price of the product before they are allowed to be sold in the markets we have legal control over.  that would be real free trade.

[ravells]

I think Miko’s right. Like the Bish on a good day, we have reached the stage where we are going round in circles and not really getting anywhere – so one last stab and that’s me done.

Advocating a more enlightened form of consumerism with greater checks on corporate misbehaviour does not make a person any more communist than does advocating an unhindered free market economy make a person a Nazi.

Indeed, we can still have free trade whilst taking steps to make accountable corporations who abuse their workers. The two are not mutually exclusive.

Whilst I agree with some of what Miko says, I cannot agree with his rather clinical view that because poor wages and abuse are better than no wages at all, people should put up and shut up and think themselves lucky and let the laws of economics take their course.  I wonder whether he would think the same way if he were one of those workers. I suspect not.

Article 1 of the The Universal Declaration of Human Rights (which was in a large part modelled on the US Constitution) provides that:  'All human beings are born free and equal in dignity and rights .They are endowed with reason and conscience and should act towards one another in a spirit of brotherhood.'

If we head towards a world which is driven by this principle, then I believe we are holding the right course. If that involves making corporations accountable for worker abuse,  whether by boycotting their products, embarrassing their Directors in public or by some other means, then I say, ‘Go for it.’

Miko asks why large corporations should increase wages to underpaid workers. The answer is really simple – because they can.

Miko further believes that it is not true that ‘the world would go to hell if corporations were not held in check by legislation’, saying that companies simply respond to the needs of their consumers.

Whilst this is correct to a degree it is by no means an absolute truth. Often consumers are not aware of questionable corporate practices, certainly corporations do not publicise them.  The biggest source of information consumers are exposed to is advertising which is hardly a balanced view.  Legislation is both fundamental and necessary to govern the behaviour of corporations (which are after all legal persons) in the same way as it governs individuals. Legislative failure or the failure to properly police legislation results in incidents like the Union Carbide factory disaster in Bhopal.  The point is so trite that I am surprised that a person of Miko's intellect could not agree with it. Dictatorships need not necessarily be political – they can be corporate too. This is known as an Oligarchy.

Finally Miko says that minimum wages prevents workers with low productivity from obtaining any employment.

I infer that he means that the minimum wage would make some workers too expensive to employ.  This would depend upon the rate at which the minimum wage was set.

Grunherz makes the point that existence of legislation which does not favour large corporations means that the process of legislation is one in which there are competing interests. Quite right, but we need to be vigilant that the interests of the many are not ridden roughshod in favour of the interests of the few. It took a lot of courage and many deaths in the Civil Rights movement in the US for the state to recognise that Black people were entitled to equal rights to whites and to legislate accordingly.

Finally, let me leave you with a snippet from the Center of Public Integrity:

WASHINGTON - More than 70 American companies and individuals have won up to $8 billion in contracts for work in postwar Iraq and Afghanistan over the last two years, according to a new study by the Center for Public Integrity. Those companies donated more money to the presidential campaigns of George W. Bush -- a little over $500,000 -- than to any other politician over the last dozen years, the Center found.

Makes you wonder who is pulling your president's (or any politician's) strings, doesn't it?

cheers

Ravs