Tan Kin Lian's Blog: Open market create jobs

Friday, June 25, 2010

Open market create jobs

I saw an ad on CNN from the International Chamber of Commerce. It said, "Open Markets Create Jobs". I reflected on this message. It is a strong, appealling message, but is it true?

It is certainly true in some respects. The jobs are created in developing countries. But it came at a big price for these countries.

Look at what is happening in China. Many workers found that the wages could not keep up with the cost of living. They are taking industrial action and go on strike. This would be unthinkable in a communist country where the trade unions are under the control of the Government. But, it is happening, and the Government seemed to find it difficult to maintain the industrial harmony.

The jobs that went to the developing countries were at the expense of the same jobs that were lost in their home countries. Looking at the global picture, the number of jobs may not have increased. Instead the wage cost has come down, and that allows more profit for the capital owners.

These jobs were also made at the expense of public sector jobs that could improve the quality of life for the people, i.e. teachers, health care, community services, etc. With globalisation, more people are now working in jobs that product material goods, at the expense of public service jobs that help to make a balanced, better life for the people.

We need a new way of looking at jobs in its totality. If the trend continues as it had for the past two decades, we will have a less stable a less happy environment.

Tan Kin Lian

6 comments:

Anonymous said...: What is happening in China is not new in history.

It was the extreme abuse of workers in the late 1800s and early 1900s that led to the rise of trade unions and communism.

We are now coming to a full circle where workers are now starting to strike in China, a former communist paradise.

As wages start to rise in China in response to the strikes, China factories and jobs will start to move to Vietnam (an even cheaper, better, faster country).

Social unrest will likely spread in China as a result.

How's this for a cheaper, better, faster forecast that does not come attached with a million dollar salary? And if I'm wrong, I won't blame my fellow Singaporeans.; June 25, 2010 8:22 AM
Anonymous said...: Although environment can be less stable and happy, the most important thing the politicians must ensure is that there must be peace and political stability.

It seems China is losing its grip on these two aspects, with strikes ongoing nationwide. Maybe China is too big for effective control, even with a communist govt and no elections.

But it may not be the case for very small countries, like city states. Peace and stability can be quite easily assured, despite wide income gap and high cost of living and affecting the poorer sections of the population very badly.

Hence although being small has a lot of disadvantages, there are advantages too, especially where govt control is concerned.; June 25, 2010 8:51 AM
Anonymous said...: An open market merely invites those in power - government leaders, business owners - to consciously/unconsciously abuse those workers, whether blue or white collar).

In Singapore, I see the problem in the lopsided tripartite relationship between labor, government and business. The local unions are effectively controlled by the government but unfortunately the ideology of the incumbent government is tilted obscenely in favor of businesses.

The government seeks to control costs. Depressing wages is the easy way, perhaps it is time we as a people re-examine what kind of society we want to build.; June 25, 2010 9:32 AM
Anonymous said...: There is no one path that fits all. Every country's circumstances are unique and each will find ways to solve their problems.

What matters most is whether does it solve these problems, namely providing the population with:
- jobs
- security
- safety

Then again, what matters is the initial phase of identifying problems. It is perhaps in this that SG is falling behind in, because it is easier to solve problems by dismissing them as being problems. A good example is the approach to solving flooding. Calling it a 1 in 50 year event, blaming it on debris, etc. dismisses the problem, leaving it to resurface in the future.

Is this approach acceptable? Well it depends on who you are. To draw an analogy, if you're a patient who saw a doctor who essentially dismisses your problems in a similar manner, it's at no loss to the doctor as you'd still pay and pay for subsequent treatments.; June 25, 2010 7:23 PM
Anonymous said...: Well constructed lies usually embed half-truths. The sentence is incomplete.

Open markets are responsible for the deficits in the western countries and surpluses in the east. Open markets allow jobs to flow to places where it's most economical (cheapest). This imbalance should have resolved itself as the West will not have sufficient income to buy from the East.

However, consumption in the West was propped up by replacing income with Debt.

Hence, while open markets create jobs, it is done at the expense of the loss of jobs in other countries.

Open markets are advocated most by those who stand most to gain from them, namely capitalists and export-oriented countries.; June 25, 2010 7:32 PM
Bongo said...: There is perhaps a natural evolution to these things. When a market becomes more free, initially, there could be abuse of the workers by their bosses, as Marx had observed.

When workers become more aware of their collective power, working conditions will improve -- the current labour unrest in China could be the start of this stage for them.

Ultimately, it is up to the masses to realise their collective power to ensure that abuse is minimised. This could take a long time to happen and sometimes we trust the powerful too much so that even with a mechanism such as elections, some communities such as Singapore still hand over power to the same, one party again, and again, and again.

Change will happen when enough of the masses become really dissatisfied.

Democracy (in politics) and a free market economy (in economics) are not perfect, but seem to be about the least bad systems to organise society.; June 27, 2010 11:18 AM