Why are American jobs disappearing? Why are most of the mass-produced products that you find on Wal-Mart shelves “Made in China”?
The answer doesn’t exactly take an economist to figure out.
China is notorious for low wages, which is the reason many companies resort to sending work overseas.
Despite the costs of shipping products from China, appallingly cheap wages allow the Chinese to produce inexpensive products for today’s bargain-hungry consumers.
Recently, China decided to lend a “helping” hand to its poverty-stricken citizens by raising its poverty threshold, a move that made 100 million Chinese citizens qualify as “poor”, allowing them to receive assistance from the government.
While such a move may allow China propagandists to tout a growing China economy leading to economic improvements for her people, upon closer examination the reality paints a much different picture.
Poverty in China
Previously, to qualify as poor, rural Chinese people could not earn more than 1196 yuan ($187) per year per person. That line has now been set at 2300 yuan ($361) per person each year. You read that right – each year.
While this is a “huge” increase of 92 percent allows pro-government propagandists to preach that Chinese wealth is being fairly distributed, it is still difficult to imagine living on such horrid wages in the U.S.
This means that there is no competition when it comes to setting minimum wages in China, when compared to the minimum wage in Western nations. When a Chinese citizen only needs to earn $361 in an entire year in order to “rise above” the set poverty line – the need to pay fair wages is not that pressing for companies in China.
Wages in China
With that said, some areas of China have seen a steady wage increases over the last several years, including the wage of migrant workers. (4)
While this would seem like good news, it is only good if workers are actually paid for the work they do. Even though it is illegal to withhold wages if a company has the means to pay, many companies in China are still refusing to do so.
This is especially true if the workers are migrant workers who are viewed as less important than Chinese residents.
Reduced bank lending during the recent economic downturn is also making it difficult for companies to continue operating, and when they close, they may sell off property at far below value to keep from having to pay back wages. (5)
Poverty Is Taking its Toll
Despite the government increase of the “poverty level”, very real poverty is taking its toll in China, where workers are not making enough to live off of.
Many workers are even attempting suicide after working hard only to be refused payment. Workers who stand up and demand payment from their employers are often met with extreme violence.
In one case, a young man from Sichuan named Xiong Hanjiang asked the township labor bureau to intervene on his behalf. The factory where he had worked was indeed ordered to pay 3400 yuan, but they refused. The Bureau did nothing further to assist the worker.
The young man and his family went to demand payment in person, and were beaten.
The young man himself had his hamstrings cut, and is now paralyzed for life. Neither the township nor the municipal government did anything at all about the violent attack. (6)
On the surface, if you listen to the public announcements and the government rhetoric, it may appear that improvements are being made for Chinese workers, but in reality, China still has a very long way to go.
Originally published on TopSecretWriters.com
(1) China Takes a Tough Line on Poverty
(2) China to raise poverty line to $1 per day
(3) 2011 Poverty Guidelines
(4) Chinese wages and the turning point in the Chinese economy
(5) Unpaid wages in China Can’t pay, won’t pay
(6) Wages in China
(7) ^^^ 星翼^^^ via Compfight cc