This one is for Liz

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Thanks Suz

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More Economics…

Does Hollywood promote poverty thinking because it’s fun to watch or as a social engineering tool? I’m not talking advertisements; I’m talking in the TV sitcoms. The Jeffersons and Fresh Prince of Bel Air are the last shows I remember showing people bettering themselves through working. Then there are all the shows making fun of people with money (anything with Paris Hilton or Nicole Richie). I guess that tradition goes clear back to the Beverly Hillbillies. The working poor are great (Reba) and the rich are mean or stupid (Martha Stewart). I’m getting really tired of them trying to teach my kids that it’s okay to live paycheck to paycheck. I want them to do better than that.

Again, the non-economics homework talk is at Celebrating 40.

An economics question

The problem with Asian sweatshops is that there aren’t enough of them. (I am not writing about forced labor or child labor, both of which are different cases.) Adult workers take jobs in these unpleasant, low-wage manufacturing facilities voluntarily. So one of two things must be true. Either (1) workers take unpleasant jobs in sweatshops because it is the best employment option they have; or (2) Asian sweatshop workers are persons of weak intellect who have many more attractive job offers but choose to work in sweatshops instead.
Sweatshops are nasty places by Western standards. And yes, one might argue that Nike should pay its foreign workers better wages out of sheer altruism. But they are the symptom of poverty, not a cause. Nike pays a typical worker in its Vietnamese factories roughly $600 a year. That is a pathetic amount of money. It also happens to be twice an average Vietnamese workers’ income.”
Wheelan, Charles Naked Economics: Undressing the Dismal Science


So as I read it, the sweatshops with voluntary adult labor are actually raising the standard of living in the areas where they are operating no matter what we in the industrialized nations think of them. I’m sure there are some of you out there who would disagree but let me ask you some questions – What would the economies of the countries with these plants be without them? How much would you be willing to pay for a pair of shoes if they had to pay US union wages? How many people would be unable to buy clothes if it weren’t for the use of global factories? If they are paying the workers double the annual salary, aren’t they making their workers into rich people? What kind of job would you take if you could make 2x the annual salary of the people around you?

Regularly scheduled blogging is still at celebrating40.com

For the time being….

Most of my posting will be at Celebrating40.

The Fourth of July vacation report

Is over at the other blog.

Another parenting tip…

Most of us have really screwed up attitudes toward money. Money is not good or evil, it’s a neutral tool (so is a gun, a screwdriver, and the spikes environmentalists put into trees). There is no shortage of money, no matter what a Keynesian economist tells you. Just because Warren Buffet and Bill Gates have billions does not mean that poor people are without billions because of them (in fact, poverty stricken people will have tons because of them). The economy is not a pie, with limited supply, new inventions do not take money from existing ones, if you insist on believing in the pie; new things to spend money on make the pie bigger. So much for the economy part of the lesson…
The worst thing we can do to a child is to tell them that “we can’t afford that…” First off it is a lie. You can always afford something, it all comes down to the sacrifice you’re willing to put up with. I used to get really irritated by the welfare mother who rented from us. She never had rent money but she could afford cable TV, Dominos or Pizza Hut for dinner every night, and laser tag equipment. Not to mention, I didn’t have to heat my apartment all winter, the amount of heat she had going in her place, kept mine warm although the floor was almost too hot to walk on barefoot. Needless to say, her choice of purchases was poor. She always complained about how she didn’t have any money for clothes for the kids or for the rent. She and many women who came to Mary Kay parties I held. I learned that women whose kids had no clothes would still buy makeup for themselves and my stuff cost less than the department store stuff, so actually, I was saving her money. People will always find a way to afford the things they really want.
True, there are some thing’s that are currently out of my price range (Shelby’s new Cobra anyone?) But, it’s possible that if I was to sacrifice silk, fabric and canvas, eating out and Netflix plus found a better paying job, I could get it. I can afford it; I just don’t have the money right now.
In order to create a healthy attitude toward money in children instead of creating an image of scarcity, give them a goal or a reason. “I’m sorry, buying bubble gum instead of fresh veggies is just a poor choice right now.” “Yes, it would be great to get that right now, but you need to earn the money for it first, let’s think of ways for you to earn money.”
I have to admit that I fell down in teaching my kids the truth about money. I realized this when my youngest told me that we could buy the toys that he wanted because, I had a credit card. I was able to answer that request with, “Honey, credit cards are not free money. Let’s go home and I’ll explain it to you.” See, I still didn’t say, we can’t afford it.