This American Life and denial

Mike Daisey is an ideological monologist.   He duped the NPR program This American Life in a program called Mr. Daisey and the Apple Factory on January 6.  The New York Times did a similar story  on the horrible working conditions in the factories that manufacture Apple products.  Trouble is that a lot of his story was fabricated, not by honest working people but by Mr. Daisey.  His translator denied that a series of interviews that Daisey said were the basis of his story actually ever happened.    So yesterday the program did a retraction, sort of.    Ira Glass the show's creative genius said in a press release "We're horrified to have let something like this onto public radio. Many dedicated reporters and editors - our friends and colleagues - have worked for years to build the reputation for accuracy and integrity that the journalism on public radio enjoys. It's trusted by so many people for good reason. Our program adheres to the same journalistic standards as the other national shows, and in this case, we did not live up to those standards."  That was a superb statement of contrition and the right thing to do.


But at the end of the piece they let ideology creep back into the discussion.   Charles Duhigg, who is an NYT reporter, tries to make us feel bad about using outsourcing to produce consumer goods.  He commented "You're not only the direct beneficiary; you are actually one of the reasons why it (the conditions in the Chinese factories) exists. If you made different choices, if you demanded different conditions, if you demanded that other people enjoy the same work protections that you yourself enjoy, then, then those conditions would be different overseas."


But let's look at this in a different way. Are the adverse working conditions permanent?  Of course not.  Here is how the dynamic changes come about - all without regulation.   First, the new factories in China, albeit with less favorable working conditions than in America produced jobs for Chinese workers.  Presumably, those workers benefited from the new jobs and wages that are higher than they were before the factories came to China .    Second, as a middle class has begun to develop, those same workers have begun to demand higher wages and better working conditions.   Ultimately, the market produces a pretty fast set of positive conditions.   


Part of the reason that Apple chose to make parts of the iPhone in China (and elsewhere) is that the net cost to the consumer is reduced (a benefit to US consumers).   At the same time, as those jobs open up, the workers in China benefit because of new jobs and higher wages.   In the end, as the differential between relatively low skilled Chinese workers and higher productivity workers in the US narrows (as wages in China increase - and they are increasing) some manufacturing jobs will migrate back to the US.   The NYT stories suggested that FoxConn the company that has generated the most controversy is beginning to automate some processes that in part is a result of the fact that low skill/low wage jobs are not always going to be a better economic choice.  Ultimately the dynamism of the market aids both US consumers and worker and Chinese workers.   Mr. Daisey's and Mr. Duhigg's presumed solution would be to impose regulations that only a highly developed economy could afford.   Who benefits from that? - bureaucrats and pundits.