10.17.12
China Toilet Blooz
Using Captain Beefheart style to explain it.
For PBS, Pulitzer winners Donald Barlett and James Steele were on hand to explain their new book, “The Betrayal of the American Dream.”
When I lived in Pennsy I read the Inky daily. Barlett and Steele were the team of investigative journalists who defined income tax reporting, most spectacularly in “What Went Wrong,” a Pulizter-winning piece on “How the Influential Win Billions in Special Tax Breaks,” published in 1988.
Excerpted:
DONALD BARLETT, Co-Author, “The Betrayal of the American Dream”: The “Advertising Age” has written off the middle class in this country. They say the age of mass affluence is over. And now you’re going to have to learn to cater to the super rich and the affluent in other countries, because the middle class in China, Brazil, India, that’s the source of the coming wealth, not the U.S. middle class …
DONALD BARLETT: On the surface it sounds great, open trading, other countries. What’s to be against? The problem is, when the theory was developed back in the early 1800s, it was envisioned as countries operating comparably.
The incomes of the United States and China are so disparate that it would never work. It’s always going to be cheaper to go over to China to build what you want to build.
PAUL SOLMAN: As manufacturing jobs migrated aboard, Barlett and Steele point out, the Middle American standard of living sank steadily.
JAMES STEELE: If you’re going to get the smart jobs in this country, the brain power, and it is not working out as everybody said it would, because now many of those jobs are starting to go offshore faster than the old manufacturing jobs did.
PAUL SOLMAN: The job drain, especially to China, has become a staple of both presidential campaigns.
NARRATOR: Under Obama, we have lost over half-a-million manufacturing jobs. And for the first time, China is beating us.
NARRATOR: Romney’s never stood up to China. All he’s done is send them our jobs.
DONALD BARLETT: The real bottom-line question is, what kind of a society do we want? Do we want a society built on the principle that the only thing that matters is the lowest possible price or a society built on the principle that everyone should have a living wage?
And those are going to be two very different societies. And this goes back again so what we’re talking about. The people up here, they don’t want everyone to have a living wage.
PAUL SOLMAN: So, you actually think we could have an economy in this country in which lots of Americans would simply be not part of the economy at all?
DONALD BARLETT: Irrelevant.
JAMES STEELE: You know, they will have jobs, but these are going to be jobs that don’t pay much.
JAMES STEELE: Maybe things will have to get a lot worse before people realize that there are some things, some positive things that government can do. These things didn’t use to be so partisan in this country. We used to be able to get together and do things for the benefit of everybody. And we hope one of these days we’re back to that. We’re definitely not there now.
Finally, most of the US citizenry gets this.
However, Mitt Romney built his expanded fortune on shipping jobs to China and destroying middle class livelihoods. This fact has allowed the Democrats, and the President in last night’s debate, to tag him as an “outsourcing pioneer.”
He is, in other words, the vulture mega-businessman who most Americans should be running away from as fast as they can.
In fact, Romney was trashed on his reputation vis-a-vis jobs and China last night, causing him to emit one of the more fatuous quotes of the night.
Romney: “They hack into our computers.” Yes, definitely, that’s why all the jobs went there.
Barlett and Steele are essentially arguing that you can’t have an economy for most Americans where the only stuff made is artisan goods for the very wealthy and portions of emerging upper middle classes in other countries. It’s a point I’ve made numerous times under the Made in China tab.
Another facet of the economy that produces nothing is the phenomenon of jobs which pay virtually nothing, all built on the model of using computer code and the web to make virtual task bidding bazaars like Jeff Bezos’ Mechanical Turk.
Mechanical Turk, and others like it, allow corporate America to get around the minimum wage by making more and more work — which is all service and task oriented — free-lance labor where people are paid pennies.
In this smartphone applications are used make life worse by speeding up the leveraged destruction of the ability of average people in the street to make a living.
It is a world of all pitted against all.
When Fernando Navales lost his job last June, things looked pretty grim.
His efforts to find gainful employment proved futile until he downloaded an app called Gigwalk, where companies offer small amounts of money for small tasks that take little time. (Users simply swipe to “accept” the task and complete it within a set time period.) Within days, he was earning more than he had in his previous position.
Navales threw himself into the work, taking between 30 and 40 “gigs” per day (often photographing restaurants for Microsoft’s (MSFT) Bing search engine). Over the past year, he has completed about 750 gigs – and this new kind of employment has changed his perceptions of the working world.
“It’s a large part of my life,” he said. “I actually turned my brother onto it. He’s in Ohio, but we flew out to New York together and we basically took a working trip to NY taking pictures of restaurants.”
Not included: The part where the journalist asks the man and his brother how much they actually netted after deducting living expenses and two round trip air tickets from Ohio to NYC.
FAIL.
Utter desperation and exploitation shows up in many ways:
While there have been businesses catering to this audience for some time, it was the advent of the smart phone that allowed them to take off.
“But as these services now get pushed to your phone … it’s more convenient for the task consumers to receive the jobs when they’re out already,” said Henry Mason, head of research and analysis at TrendWatching.com.
Beyond Gigwalk, there are a few leaders in the business-to-consumer tasksumer space, including TaskRabbit and Mechanical Turk, a division of Amazon (AMZN) …
“What you’re starting to see is a higher degree of comfort with the concept,” said Ariel Seidman, CEO and co-founder of Gigwalk. “Where [it] really shines is when you get to places that are hard get to, like Kalamazoo, MI or Kodiak, AK. Those types of places, you can all of a sudden reach into them with the same efficiency and speed in which you can reach into a Chicago or LA …”
Other firms bring people together in a different way. PleaseBringMe acts as a handshake service between travelers who can volunteer to bring things like hard to find items to someone at their destination.
“My wife is pregnant and craving In-n-Out,” wrote one user. “We used to live in CA but are now in the NYC area. If anybody would be willing to buy 4 Animal Style cheeseburgers and bring them on a plane to me in NYC, that would be awesome.”
Another user, from Brazil, is on the hunt for a drink that’s only sold in Greece. “I want Mythos beer!!!!,” he pleads.
It’s difficult to get past the brainlessly towering odiousness of a request for fast food cheeseburgers to be flighted, in passenger, from soCal to NYC, which — of course — has no cheeseburgers, cheeseburgers, cheeseburgers.
One begins to wonder if it’s even real or just another among millions of Internet trolls and pranksters posting something vile to see how many people are crushed and stupid enough to jump at it.
Most people with sense instantly recognize things like Mechanical
Turk as mechanisms for an economy mediated by vultures and predators, using trivial mass computing applications and bad economic conditions to slice more flesh off a shrinking active labor force with few ways to protect itself.
One comment, chosen from many — all of them pretty supercilious — on the GigWalking brothers:
If their total income from this is under $400, they wont [sic] need to report it as self-employment income.
Chuck said,
October 17, 2012 at 9:13 am
George, I wonder if we’re really battling overseas cheap labor or simply the effects of technology and the accompanying efficiency. Consider this article on the usually far-left Counterpunch:
http://www.counterpunch.org/2012/10/15/the-myth-of-u-s-manufacturing-decline/
What’s your take on this? Granted, the Chinese ship a huge amount of garbage to the US, but much of it is just that–junk. If we’re really talking about man-vs-machine, then eventually, we’re going to have to adopt a new economic model.
George Smith said,
October 17, 2012 at 10:30 am
Well, he’s got the thing Barlett & Steele mention — the increase in automation which contributed to a drastic plunge in employment. However, he doesn’t split the types of manufacturing. US manufacturing, a strong component of it protected, in arms development and sales to not only the US military but the rest of the world. Then there are cars and jet engines.
But everything I buy — in dry goods at Target or even the supermarket, Ralphs, is now made in China or some similar low wage place. So virtually everything the US middle class buys, except for luxury items and autos, is made in China. Now I’ve never been much for bashing China. It took two to tango and it was a conscious decision by many big corporate players to de-industrialize non-military and big ticket manufacturing.
I’ve written about Guitar Center and the guitar instrument manufacturers on this. Most of the front of the store at Guitar Center is stocked with material made in China by plants working under the orders of the old US manufacturers who shipped everything in the low and medium priced range overseas as fast as they could. That’s just a fact. I spoke about it in concrete examples, of a guitar mini-multi-amp called the Line6 PocketPOD. And they are made in China and I went to GC to get one and the first two
out of the shrinkwrap were non-functional, in different ways. The third worked and still does. And at what Line6 was getting them made for they could afford an error/return rate that high — which would simply be unacceptable with anything US made.
What the musical equipment makers kept was the artisan manufacturing, the high-end stuff. There are a lot of factors that were at work, including political and corporate leadership that crushed labor and worked assiduously to keep wages and salaries compressed. So while manufacturing efficiency went up, the middle class did not share in the benefit because its wages did not increase/individual at all. And so buying power and demand was diminished gradually, the buying power given the illusion of still being there by taking the short term solution of decreasing prices through Wal-Martization.
Now it’s been all wrung out. The economic collapse blew the last of it all to shreds.
How do you restore US demand and buying power in the middle class? You have to work at putting some protections in place and giving labor back its power in the private sector to negotiate for better conditions and pay. You have to raise minimum wages and get working on what’s an acceptable living wage.
Barlett and Steele, in the interview, said things have to get much worse before enough people will be shocked into action to do something. We don’t have social unrest yet, certainly not on the scale of Europe, which — incidentally, where the nations doing better than us have far more commitment to labor rights, fair pay and a social safety net. And it’s worked for them despite the efforts of half the political power in this country to paint all the nations of Europe as sissy parasitic basket cases.
George Smith said,
October 17, 2012 at 11:31 am
Here are a few month old samples which still pertain to the arguments. National Presto which made my old hot dogger sent its appliance business to China — the stuff everyone buys with the moolah they made from American manufacturing jobs being steadily thrown out. And it diversified into arms manufacturing, the stuff the middle class pays for but does not buy, in effect — subsidizing the middle class employment of those who work in protected arms making jobs.
http://dickdestiny.com/blog1/2012/04/14/presto-hot-dogger-replaced-by-arms-manufacturing/
And Rajat Suri and his Presto table top app, using trivial tech applications to chisel profit out of minimum wage wait staffs, reducing their buying power, so that it can be diverted to the haves. This is predatory design and it’s all too common.
http://dickdestiny.com/blog1/2012/03/06/americas-innovators-he-squeezes-blood-from-the-remaining-stones/
George Smith said,
October 17, 2012 at 11:44 am
And here’s a recent piece on a Presto competitor, the Ziosk, installed in a couple restaurants in my old neck of the woods.
http://articles.mcall.com/2012-10-06/business/mc-red-robin-tabletop-server-20121006_1_credit-card-electronic-payment-server
“It’s basically getting great reviews,” said Dorothy Amato, a server at the Center Valley Red Robin who finds young children to be especially taken by the novelty.
Amato isn’t concerned about being replaced by a computer. After all, someone has to bring the food to the table.
“It would have to grow legs to replace us,” she pointed out.
Which is true, people still need to convey the food. But it seems not to have occurred to her that eventually the bosses realize they need -less- legs to convey the food because the min wage wait staff time at the tables has been eliminated. So the min wage workers get to have musical chairs downsizing played on them. And they lose tips. And their hourly money, which is subsistence living, siphoned off for the benefit of the people at the top. One could also argue how much value is added by making trivial entertainments and internet movie schedules available at the table. Doesn’t one often already know where the movie theatre is and what you were planning to see on the weekend you have chosen to eaten out? And, personally, I won’t eat with people who play computer games or anything else on a pad computer in front of me.
Chuck said,
October 17, 2012 at 9:56 pm
Here’s a bit more on US manufacturing. For quite a time, PBS and others have been giving the excuse that US workers lack the necessary skills for manufacturing jobs.
Well, maybe that’s true to some small extent, but it’s not as bad as it’s being made out to be:
http://www.manufacturing.net/news/2012/10/report-manufacturing-skills-gap-less-pervasive-than-many-believe
Did you see the one on the counterfeit Chinese air bags?
http://www.cnn.com/2012/10/10/us/counterfeit-airbags/index.html
In my trade pubs reading, counterfeit electronic components are still dogging the major supply channels:
http://www.dailytech.com/Report+Counterfeit+Chinese+Electronics+in+US+Military+Aircraft+Jeopardize+National+Security/article24741.htm
But hey, it’s cheap so it’s all good for the bottom line…
George Smith said,
October 18, 2012 at 3:55 pm
the report does say that contractors and other authorities in the United States are partly to blame for failing to detect fake parts and routinely failing to report suspected counterfeit goods.
I’d have to say, in most instances, the corporate American businesses that decided to take this route, the US military, and so on — had it coming. So if the problem worsens it’s not just China’s fault. When it’s been domestic products, not arms, or chemicals in food stuffs and drugs, the Congress has been a lot less interested.
As for skills shortage, the statistics Paul Krugman has repeatedly churned out from the US government have continually made the case there is none. Unemployment in the depression has been caused by lack of demand, not whatever eyewash is peddled by various businesses and the right wing.
On the other hand I have seen stories in parts of the business community try to get training programs specifically for their firms installed at community colleges. To me, this always looks like the getting of the student to foot the bill as an unpaid apprentice working for the firm pushing for it.
This country, and the citizenry, could stand for some reverse brainwashing on corporate America and how little it believes in people. The Chinese laborers at FoxConn did not automatically pop out of some special school for making iJunk, a school no one goes to in the US. Now certainly those jobs will never return but people will always have to make things used by others and there’s no specific special talent for it that’s purely the commodity of select nations.
We’re all upside down here. Great portions of the citizenry believe the idiotic propaganda that wages need to be always driven down so corporate American can make a profit. If there was true political power to drive compensation for work up, we’d see a much better society instead of one in relentless decay.