HPAVC/HPAVC CD-ROM.iso/pc/HOMEWORK.ZIP/ECONBITC.TXT

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Question #1:  Women and the Global Assembly Line

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 todays 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 womans 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 LDCs.  In
the LDCs, MNCs 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 LDCs where MNCs
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 1800s.  However, technology is much more sophisticated, due to the
intervention of foreign companies.  The men in these LDCs 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 familys children.  In most LDCs, 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 LDCs as it is in the US.  Citizens of LDCs 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 LDCs are encouraging foreign
investment because they need the industry, the income, the jobs.
Multi-national corporations are taking advantage of the LDCs low-cost
labor and moving their manufacturing sectors to the LDCs.  The primary
aspect which LDCs possess is low-cost labor.  Many MNCs (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 MNCs to relocate.
Therefore, the governments of LDCs work with corporate managers to keep
wages low.
 Economically, LDCs 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 familys 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 womens freedom,
causing another incentive to work.
 These political, economical, and social factors are changing the
workforce of many LDCs.  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 LDCs will begin to develop infrastructure once they
acquire enough capital, but to acquire capital, they must allow MNCs 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 todays 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.  MNCs 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 LDCs 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 the
United States, 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 LDCs. 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 someones loss.
Todays 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 economy 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 worlds 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 LDCs.  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.