Two stories of globalization

One of my favorite toys as a child was Etch A Sketch. I was never very good at it, but my Mom was great. She could do full pictures on the darn thing. I watched her and saw what was possible, and it makes up some precious moments with her. Etch A Sketch also taught a different lesson for me - impermanence. No matter how good or bad my etches were, they disappeared with a single shake - and my Mom's did too. The purpose of sometimes hours of work was the work itself. Thinking about that in more recent years (and yes I have bought Etch A Sketches recently) it flies in the face of so much of today's socialization. Anyhow, given my feelings about Etch A Sketch, I couldn't miss two articles in the 12/07/03 NY Times about the company, both written by Joseph Kahn and conveniently separated into two different sections of the paper. In the "National" section was An Ohio Town Is Hard Hit as Leading Industry Moves to China, and in the "International" section - Ruse in Toyland: Chinese Workers' Hidden Woe. Both Bryan, Ohio and Shenzhen, China have something in common - Etch A Sketch.

Bryan, Ohio was the home of Etch A Sketch. Like so many other manufacturing jobs, the union workers at Ohio Art (the makers of Etch A Sketch) lost their jobs to a "cheaper" international workforce. Like so many others, life time employees of Ohio Arts found themselves on the streets of their town looking for jobs that didn't exist. Like so many other small towns, the loss of the jobs has torn the heart out of Bryan. Sometimes I think that this hidden loss is deliberately occluded by discussion of the decline and death of rural communities. The implanting of the idea that the only thing outside of major urban centers is fields waiting to become Wal-Mart hubs.

The Ohio Art workers kind of knew that the end was near. The company had brought in workers to be trained by the long time employees of Ohio Art. It seems sadistic doesn't it to have workers train their replacements knowing that their jobs, their lives as they know them, and their communities will be wiped away by the job they are required to perform? Such was the case for the Ohio Arts workers - some of whom had been with the company for 40 years.

That loss for Bryan was three years ago. They got their notices a week before Christmas. Now, on the other side of the ocean, the replacements are also suffering. Ohio Arts contracted the making of Etch A Sketch to a Chinese company named Kin Ki Industrial. Kin Ki promotes itself as a great work place - down to telling employees what to say when US companies come to inspect them. However, the reality of the Kin Ki company doesn't match the smiling marketing pitch. Most of the workers now making Etch A Sketch are teenagers from the provinces who work long hours and are paid 40% less than the company claims. According to the article, "They sleep head-to-toe in tiny rooms." So I am assuming that they are in company housing as well. There are no pensions, no medical benefits, and no overtime pay. These are what Kin Ki says it offers, but admits it falls short.

And the forces that lost Bryan, Ohio its jobs and community, and now exploits Chinese teenagers in Shenzhen China ... Wal-Mart (and Toys 'R Us). The "low cost leader" that is the largest corporation in the world wanted to keep the price of Etch A Sketch under $10. The image of that bouncy little yellow smiley face, impersonating Robin Hood, "slashing prices" all over the place. The hypocrisy of their mascot revolts me every time I see it. I see the little arrows going straight into the hearts of workers in industries around the country, and the slashed prices cutting the life blood of workers internationally. "Robin Hood" who "steals from the rich to give to the poor" is a frightening morph job on what Wal-Mart actually does.

Wal-Mart is owned by the five Walton children whose combined wealth is roughly $95 BILLION. It would take the typical US worker about 2.9 MILLION years to earn that much, and the typical Wal-Mart worker far longer than that (about 5 MILLION years). And the workers at Kin Ki Industries? Well, it would take them about 3 Billion years. There is a viciousness of cycle and intent here that is truly breathtaking. Wal-Mart displaces workers and kills communities making "Wal-Mart towns." Wages go down so that the only thing folks can afford is Wal-Mart. Wal-Mart exports the jobs to exploit an even more exploitable global labor force which further erodes US labor's ability to compete and drives wages overall ... DOWN. Meanwhile the Waltons sit at the top of ill-gotten wealth and plot how to extend their empire (Wal-Mart Invades, and Mexico Gladly Surrenders, Weiner, NYT, 12/05/03). For me, the smiley faced Robin Hood mascot has a maniacal grin.

The myth is that it is only those "low wage manufacturing jobs" that have been lost. The reality is that what has been (and is being) lost are working and middle-class wage jobs that formed the heart of a strong middle-class in the US. The myth is that we (US workers) have moved up to higher paying high tech and service jobs. The reality is that most of those jobs pay less than the manufacturing jobs did, and that manufacturing is not the only industry losing jobs to exploited global work forces. In an interesting article in the 12/07/03 NYT, Who Wins and Who Loses as Jobs Move Overseas?, Erika Kinetz discusses the latest and fatest growing trend - the outsourcing of white collar jobs to (primarily) China and India.

(Stephen Roach managing director and chief economist for Morgan Stanley) "The point is that the relationship between aggregate demand and employment growth looks to me as if it has broken down. That breakdown reflects not just the rapid growth and maturation of outsourcing platforms in places like China and India, but also the accelerated pace by which these platforms can now be connected to the developed world through the Internet. These are brand-new developments. This is a huge challenge for service-based economies, like the United States."

As we have moved into a more and more globalized economy, many of the traditional economic relationships have broken down. The US economy baffles many (how can you increase unemployment, increase productivity, be in a recession, and have the stock market going up at the same time?) How can you pour billions into the economy, lower interest rates, and have the economy continue to sink? Easy, national boundaries are not economic boundaries, and national monetary policies are beyond the control of nations.

So this year as you watch the ever-present Wal-Mart ads with the smiley-face mascot, or go to shop for the kids in your life at Wal-Mart or Toys 'R Us, think for a moment about the folks who have brought you these "low low prices" - the ex-Ohio Arts workers in Bryan and the hungry kids at Kin Ki Industries.

Posted by rowan at December 7, 2003 9:07 AM | TrackBack | [eMail this article!] |