Just in case anyone though US manufacturing had a snowball’s chance, there was an excellent program on TV a few nights ago. The program covered an “ethics audit” of a Chinese manufacturing plant being conducted by a team of two consultants on behalf of Nokia. The plant makes power supplies (chargers) for Nokia cellphones. The plant is operated by an un-named German company. The plant manager is German and there is also a British executive who appeared to be his deputy. The rest of the management staff appeared to be Chinese and seemed to have good English.

The plant appeared to be modern, with new high-tech equipment and good housekeeping, no different than a similar plant in Silicon Valley. Also not unlike Silicon valley, the plant workers are mostly (90% according to the manager) female. All visible appeared to be young - twenties, I would say, and looked cheerful and social. No Dickensian horror here. Almost all are single, and are accommodated by the plant in adjacent multi-story dormitory buildings. There are both male and female dormitories and visiting is permitted - just not overnight. The company also provides full board in a large cafeteria - accessed by electronic badge.

The dormitory suites shown consisted of a single large room and ensuite toilet/shower facilities. Entry-level staff are eight to a room in curtained cubicles to provide a modicum of privacy. “Junior” staff are four to a room. Senior staff and the few married couples live offsite. As the Nokia reps commented, you could easily have thought it a college dorm.

Now for the scary part. The average worker’s wage is RMB 300 per month, of which the company retains RMB 150 to pay for the room and board. RMB 8 = USD 1 (approximately) so the gross wage, and this includes substantial overtime, is about USD 37.50 per month. These women were working for less than twenty US cents an hour. Several were interviewed in private and were generally happy with the deal, except for complaints about the food. (Which is entirely consistent with the college dorm). All would rather be there than back on the farm.

Twenty cents is about 1% of the average US manufacturing wage. Think about it.

By the way, the Nokia reps were reasonably happy with the plant. They dinged them for underpaying probationary employees and also for a safety issue relating to storage of toxics, which the management agreed to fix.

While I have no time for fiat-money central banking, the Bank of Canada’s David Dodge at least offers some integrity.

“However, when imbalances grow at an unsustainable pace, as appears to be the case at present, some form of correction must take place. If markets are allowed to operate without interference, imbalances can resolve themselves in a reasonably smooth manner. But in the absence of appropriately functioning market mechanisms, there is a greater risk that the correction will be abrupt and disorderly. Beyond disruption to financial markets, a disorderly correction might also lead governments to adopt wrong-headed protectionist measures, which would then exacerbate the damage to the global economy.

But regardless of how these imbalances are resolved, it is clear that the resolution will require greater net national savings in the United States. Investment in the U.S. economy will need more financing from domestic sources—be it from the household, business, or government sectors—and less from foreign sources. This implies an increase in net U.S. exports and a decrease in net exports elsewhere in the world, as well as an increase in domestic demand in other countries.”

…
“With global inflation and interest rates already low, it could be argued that, when the expected increase in desired savings materializes, there will be a risk that global nominal interest rates would hit zero before real interest rates had fallen sufficiently to restore the balance between desired investment and savings.”

Remarks by David Dodge, Governor of the Bank of Canada, to the Spruce Meadows Roundtable.

Janice Herrington’s day care center in Stockbridge wasn’t affected by the terrorist attacks hundreds of miles away in New York and Washington on Sept. 11, 2001. But like hundreds of other Georgia business owners, and thousands around the nation, she was able to secure a government-backed loan through a federal program for small businesses hurt by the attacks. So did Valdosta veterinarian Jeff Creamer, Hawkinsville real estate and golf course developer Larry Dunaway, and hundreds of other Georgia entrepreneurs whose businesses range from restaurant franchises to independent beauty salons - all far removed from the devastating attacks of four years ago this Sunday.

….

In Valdosta, veterinarian Creamer said his $1.5 million loan was warranted.

“You would not think a veterinary practice in south Georgia would be that impacted. I certainly did not expect to be, not nearly to the degree we were.”

He explained that travel suddenly declined as people stayed close to their homes. That affected the fees he got from boarding pets and from performing other services - shots, nail clipping and the like - that people tend to have done to their pets while they are being boarded.”

AP: 300 Ga. Businesses Got 9/11 Loans

Perhaps this is meaningful - the fact that the median price of a new home is down 14% since April. Just a thought, of course.