“Foot Soldiers of China’s Shopping Boom” (New York Times, Wednesday, Feb. 1, 2017, p B1, online as For Couriers, China’s E-Commerce Boom Can Be a Tough Road, Jan. 31), looks at the low wages and long hours for Chinese delivering packages:

But for the couriers — who are largely unskilled workers from China’s interior — the work can be low-paying and difficult. It is coming under scrutiny from labor activists and legal experts who say many couriers face punishing hours and harsh working conditions.

Nearly one-quarter of them work more than 12 hours a day, seven days a week… A majority work more than eight hours a day each day of the week.

Migrants from rural China also work long hours at low wages at factories making goods for export to the United States. Should U.S. trade agreements include minimum wages and maximum hours for workers in China, Mexico, or Cuba?

A challenge for international trade agreements is scope. What issues should be on the table when negotiators from two governments hammer out what trade rules are relevant and reasonable?

hammer-1629587_640The long delayed and now defunct Trans-Pacific Partnership (TPP) was criticized by some for including labor and environmental regulations, not just trade rules. The TPP was criticized by labor unions and environmental organizations for not having strict enough labor and environmental regulations.

In Mexico, China, and Cuba, labor rates are far lower than in the United States. And not just labor rates, but rules about how many hours a day or a week employees can work, and what benefits employers are required to pay.

NSDA debaters have a US/China engagement topic, and the February Public Forum topic is:

Resolved: The United States should lift its embargo against Cuba.

The last days of the Obama Administration ended the long-standing wet-foot/dry-foot policy for Cubans (see below), and the Trump Administration wants to build a bigger wall along the Mexican border, renegotiate trade agreements between the US and Mexico (NAFTA), and also with China. The stated goal is to restore jobs lost as companies automated and shifted manufacturing operations to Mexico and China.

Lifting the trade embargo with Cuba would open doors to similar job displacements as US firms open new factories and upgrade agriculture in Cuba. Cubans are very poor after a half-century of communist rule, so Cuban demand for goods produced in the US will be minimal.

China and Mexico posed similar trade and investment costs and benefits. US consumers buy lower-cost imported goods but US workers fear manufacturing work shifting south of the border or overseas to China. Factories closing in the US are easy to spot and report on the evening news. Families are hurt when jobs disappear. Harder to see and report are the widespread gains from less expensive clothes, furniture, appliances, and cars lower and middle income Americans can purchase. The gains are disbursed and rarely appear on the evening news or morning New York Times.

Cheap goods were imported from Japan, Taiwan, Hong Kong, and South Korea in the 1960s and 1970s, made by very poor people working long hours for low wages. But these jobs allowed tens of millions to escape poverty to relative prosperity. The same prosperity gains are in process now in Mexico and China, though not yet in Cuba.

Johan Norberg‘s 2003 documentary looks at the dynamics of international trade in Taiwan, Vietnam, and Kenya. This first segment shows some of the history of Taiwan where:

…just thirty years ago people…were poorer than many Africans today. Malnutrition was widespread and there were no natural resources. Today its people are as rich as the Spanish.

The New York Times article cited above quotes a courier from rural China about his job and long hours:

“I’m here to make money,” said Mr. Zhang, a 28-year-old former coal miner from Shanxi Province who is saving money to build a home, widely seen in the countryside as indispensable in attracting a wife. “If I’m not diligent now, I’m going to regret it. I’m almost 30 and still single.”

How do we compare Mr. Zhang’s long hours delivering packages in a city to the life he had mining coal in rural China? “The World’s Deadliest Profession: Coal Miners Pay for China’s Economic Miracle” (TheWorldPost, March 4, 2012) offers a glimpse of rural China:

“… Everywhere in rural China poor people, who can no longer sustain themselves as farmers, rush to coal mines, where wages are about equal (7 to 12 dollars a day) to what they would be paid in factories in the big cities. But in the cities, workers have a rough life and get cut off from their families and homes, so they prefer to stay in their village and work in the mines. Sometimes three generations in one family have worked the same mine.” 

The Economist reports some progress in “Shaft of Light: The coal that fuels China’s boom is becoming less deadly to extract” (July 18, 2015), but work as a city courier, even with long hours, is likely preferred to rural coal mining by many young people.

The New York Times article further takes the opportunity to compare China’s low-paid couriers to growing “gig-economy” jobs in the U.S.:

Labor standards in the industry vary widely, but many couriers work under arrangements that might, for example, provide no overtime pay or no employer contributions to their government health care and pension benefits. Just as in the United States, where Uber drivers and many others work as contractors, those arrangements raise questions about what defines work and employment.

If future legislation or trade agreements allow government in China or the US mandate higher wages, benefits, or shorter work days, they will raise costs and lower demand for these jobs and services.

We can wish for higher wages and more benefits for Uber and package-delivery drivers in the U.S. as well as in China. But mandating higher wages and benefits doesn’t automatically raise worker productivity.

Across China some 50% of the working population still live in rural areas with average annual incomes of just $2,000. Migrant laborers in Chinese factories earn similar incomes on average to couriers, about $6,000 a year. Migration is how poor people can most quickly and dramatically raise their incomes, whether from rural China to cities, or from China, Cuba, or Mexico to the United States.

According to a study cited in the New York Times article, Chinese couriers earn about 15 cents per package delivered:

Most couriers make about $300 to $600 a month, according to the Jiaotong study — an amount roughly equal to the wages of China’s migrant factory workers. They can deliver 150 packages on a weekday, drivers said, sometimes helped by making mass deliveries to office buildings.

New legislation or trade agreements that try to force earnings up for delivery or factory workers in China will result in many returning to even lower-pay work in rural China.

In the Izzit.org documentary A Taste of Chocolate, Jimmy Lai describes his first days of factory work in 1960 after being smuggled as a 13-year-old into capitalist Hong Kong from communist China. The YouTube video below is queued to 2 minutes 36 seconds, when Jimmy Lai is introduced. At 8 minutes in, Jimmy Lai describes arriving after all night in a fishing boat crowded with others escaping mainland China:

And by the afternoon we arrived in Kowloon. And at that time, when you arrive in Hong Kong you touch base, you’re legalized… You’re considered legal. I was taken to my mother’s sister and she paid $370 dollars for the smugglers. Later I found out how poor my mother’s sister was…

The narrator continues: “Their poverty meant that Jimmy was sent to work the same night he arrived in the Kowloon District of Hong Kong.”  And Lai remembers that first day:

I was taken to a factory to work as a odd-job worker. And I was very happy in the morning. I smelled a lot of food that I had never smelled, the great aroma of food. And the manager gave me ten dollars. That… that was a lot of money at that time. I was very happy, as if I had arrived in Heaven. Although as a young kid we had to wake up before seven. We got to sweep the floor, finish everything, open the door before eight o’clock. People come, and then we work until like ten o’clock, but it was a very happy time. It was a time that I know I had a future… 

A couple things connect the China policy topic and the Cuba Public Forum topic. First, the refugee policy that allowed those smuggled from China to be legal citizens of (then British) Hong Kong as soon as they touched land.

U.S. policy was similar and allowed those escaping communist Cuba, once they made it to U.S. territorial waters, to stay legally. The Clinton Administration revised this in 1995 to a “wet foot/dry foot” policy. After 1995  those escaping Cuba had to get their feet on dry land before they could stay in the U.S. legally. Then in early January the Obama Administration shifted Cuban immigrant policy again, as part of normalizing relations with Cuba: “Obama Ends Exemption for Cubans Who Arrive Without Visas,” (New York Times, Jan. 12, 2017)

President Obama said Thursday that he was terminating the 22-year-old policy that has allowed Cubans who arrived on United States soil without visas to remain in the country and gain legal residency, an unexpected move long sought by the Cuban government.

Countries like the United State, China, Mexico, and Cuba engage through voluntary exchange (trade), travel and migration, as well as through international capital flows (investment). Cubans were coming in larger numbers to Mexico and once they set foot in the U.S. Embassy they could stay in U.S. legally.

Many from China also come to Mexico on their way to the U.S. “California sees surge in Chinese illegally crossing border from Mexico” (Los Angeles Times, June 7, 2016) reports:

Between October and May, the first eight months of the fiscal year, Border Patrol agents in the San Diego sector apprehended an estimated 663 Chinese nationals, compared with 48 in the entire previous fiscal year and eight in the year before that, according to data provided by U.S. Customs and Border Protection.

People from poor countries, especially young men, are often willing to migrate long distances for a chance to make a better live for themselves. Wage and work rule restrictions slow the process of poor people working long hours to escape poverty.

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