“Gray” Money

August 24, 2010

The Bloomberg News reports that China’s wealthiest people are hiding 80% of $1.4 trillion. That leaves about 280 billion for the rest of China’s people to hide.

Bloomberg calls this “gray” income and lists all the possible “illegal or quasi-illegal” ways it may have been earned.

When the piece mentions that the wealth gap between China’s rich and poor may lead to social unrest threatening the rule of the Communist Party, this may be true, since the real cause of the Tiananmen Square Protests of 1989 was due to corrupt government officials lining their pockets at the expense of the worker.

In fact, it should come as no surprise that reducing this income disparity is a top goal of China’s current president and prime minister.

However, the same problem is happening in the United States. “Millionaires in the U.S. and Canada saw their wealth increase 15 percent in 2009, to a total of 4.6 trillion dollars.” Source: 7Bends

Then there is the fact that the gap between the rich and poor grows in the US too.

Since the 1990s, 40 percent of the increased wealth went into the pockets of the rich minority, while only 1 percent went to the poor majority.” Source: China’s Report on US Human Rights Record in 2000 Information Office of China’s State Council

Also in the US, the FBI estimates that that white-collar crime costs the US more than $300 billion annually.

The grim facts about income disparity between the wealthy and the working people means both the US and China have similar challenges—to create jobs for the worker that pay adequate wages.

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too. 

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End of Cheap from China

July 22, 2010

I find it interesting and amusing to read this obsession in the West about China’s labor practices.  Most of what I read in the media and comments to Blog posts have a superior tone as if these people come from a culture that is paradigm of virtue.

No one in the West has earned a seat to sainthood.  In an Associated Press piece by Elaine Kurtenbach, we see Western corporate greed dripping dollar signs from hungry vampire fangs in these quotes about China, “Many companies are striving to stay profitable by shifting factories to cheaper areas farther inland or to other developing countries, and a few are even resuming production in the West.… I have 15 major clients. My job is to give the best advice I can give. I tell it like it is. I tell them, put your helmet on, it’s going to get ugly,” said Goodwin…”

From BindApple.com comes this statement as if no one else in the world works these hours, “Foxconn and Inventec are two powerful brands that not many of you heard of. When Apple signed a partnership with these manufacturers, the average worker, lived and worked in the factory, doing more than 60 hours of work in a week.”

America and most Western nations are not paradigms of virtue. Labor in the West didn’t get where it is today without a struggle. All one has to do is look at history to discover what it took to earn more for less hours and be treated with “some” respect in the workplace.

If you spend time at the AFL-CIA’s Labor History Timeline in America, you will discover that in 1791, the first labor strike in the building trades took place in Philadelphia demanding a 10-hour workday bill of rights. In 1835, there was a general strike for a 10-hour workday in the same city.

When there was a national uprising of railroad workers in 1877, ten Irish coal miners were hanged in Pennsylvania and later nine more were hanged. Then in 1914, there was the Ludlow Massacre of 13 women and children and 7 men in a Colorado coal miners’ strike. In 1934, during the Great Depression, there was an upsurge in strikes, including a national textile strike, which failed.

Click on the Child Labor Public Education Project and you will learn that “Forms of child labor, including indentured servitude and child slavery, have existed throughout American history.” In fact, “(American) factory owners viewed them (children) as more manageable, cheaper, and less likely to strike.”

This situation in the US didn’t change until, “Child labor began to decline as the labor and reform movements grew and labor standards in general began improving, increasing the political power of working people and other social reformers to demand legislation regulating child labor.” Even then, it wasn’t until 1938 that child labor laws were enacted to protect America’s children from exploitation.

So, if you are one of those paradigms of virtue who feels the need to criticize what is going on in China today, consider America’s labor history before you open your mouth or finger dance your computer keyboard.

It took more than two-hundred years for the US to reach the place it is today with a standard 40-hour workweek with benefits and overtime pay for many workers, while removing child labor from the workplace.

China didn’t start until 1950, when Mao created laws that made women equal to men. Progress stopped during Mao’s Great Leap Forward and his Cultural Revolution, which went on for almost thirty years.

Since 1980, China has had about thirty years to evolve, while in America the income gap between the rich and poor widens as if the US is taking backward steps while union membership shrinks.

In fact, Chinese manufactures may be building plants in the US to take advantage of cheaper labor. After all, Japanese companies like Toyota and Honda have already done that.

See The Reasons Why China is Studying Singapore or Where Did All that Pollution Come From?

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too. 

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