How to Protect Workers?

choi

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(1)
(a) 外国人谈中国就业市场. VOA Chinese, Sept. 27, 2009.
http://www.voanews.com/chinese/2009-09-27-voa44.cfm
("沈仓颉(Darren Taylor)曾在中国担任英语教师和从事中英翻译等工作。他认为中国广大的市场对外国人来说，中国的确是个充满希望的大地。他说：'* * * 比较困难的是去适应中国人的做事方式。'")

(b)
(i) Press release: Engineering Grads Earn Top Salary Offers. National Association of Colleges and Employers (NACE), July 23, 2009.
http://www.naceweb.org/press/display.asp?year=&prid=304

(ii) Salary Survey. NACE, Summer, 2009.
http://careerservices.colorado.edu/CommonFiles/PDFs/employers/Summer09ByCurriculum.pdf

My comment:
(a) Annually NACE conducts online survey of starting salary for prospective and recent college graduates, on a voluntary basis. In recent years, degree-holders of "Foreign Languages and Literatures" are offered $34,834, the second lowest starting salaries (the lowest is for Social Work--there was only one reporting "$20,000" for Textile science and engineering, which should be excluded for statistical reason).
(b) Many of those who look for a job in China may have a bachelor's degree in foreign languages, most likely Chinese.


(2) Last Friday (Sept. 25), I read portion of a book:

Milton and Rose Friedman, Free to Choose. Harcourt, 1980.
http://en.wikipedia.org/wiki/Free_to_Choose

Whose Chapter 8 is titled "Who Protects the Worker?"

Having said labor unions (as well as professional associations) help by restricting competition and therefore numbers of people into a certain industry, the authors went to to answer the question posed in the chapter title.

My comment:
(a) Many Chinese (from PRC) comment that one has to make him-herself indispensable (现成海龟), malleable (做人要圆滑/没有棱角). But the Friedmans demurred. See page 245 about "Babe Ruth." I live in Red Sox Nation and legend of his trade to New York Yankees and the resulting "Curse of Bambino" is well known. See
Babe Ruth
http://en.wikipedia.org/wiki/Babe_Ruth
("After the 1919 season, Ruth demanded a raise to $20,000 ($212,733 in current dollar terms)—double his previous salary. However, [Red Sox owner Harry] Frazee refused, and Ruth responded by letting it be known he wouldn't play until he got his raise, suggesting that he may retire to undertake other profitable ventures.")

(b) According to the Friedmans, "Other Employers" afford the best protection. Unfortunately for Chinese, China has for more than a century emphasized (some say over-emphasized) heavy industry, which, being capital intensive, produces little jobs. For years, China has become world's behemoth in steel production. So what?  Not just migrants but college graduates in China can not find jobs, because not enough jobs--and not enough employers--are created.


--------------Quote starts here (pages 245-246)
NO ONE

Two classes of workers are not protected by anyone: workers who
have only one possible employer, and workers who have no possible
employer.

The individuals who effectively have only one possible employer
tend to be highly paid people whose skills are so rare and
valuable that only one employer is big enough or well enough
situated to take full advantage of them.

The standard textbook example when we studied economics
in the 1930s was the great baseball hero Babe Ruth. The "Sultan
of Swat," as the home run king was nicknamed, was by far the
most popular baseball player of his time. He could fill any
stadium in either of the major leagues. The New York Yankees
happened to have the largest stadium of any baseball club, so it
could afford to pay him more than any other club. As a result,
the Yankees were effectively his only possible employer. That
doesn't mean, of course, that Babe Ruth didn't succeed in commanding
a high salary, but it did mean that he had no one to
protect him; he had to bargain with the Yankees, using the
threat of not playing for them as his only weapon.

Individuals who have no choice among employers are mostly
the victims of government measures. One class has already been
mentioned: those who are rendered unemployed by legal minimum
wages. As noted earlier, many of them are double victims
of government measures: poor schooling plus high minimum
wages that prevent them from getting on-the-job training.

Persons on relief or public assistance are in a somewhat similar
position. It is to their advantage to take employment only if they
can earn enough to make up for the loss of their welfare or other
public assistance. There may be no employer to whom their ser-
vices are worth that much. That is true also of persons on Social
Security and less than seventy-two years old. They lose their
Social Security benefits if they earn more than a modest amount.
That is the major reason why the fraction of persons over sixty-five
years old who are in the labor force has decreased so sharply
in recent decades: for males, from 45 percent in 1950 to 20 percent
in 1977.

OTHER EMPLOYERS

The most reliable and effective protection for most workers is
provided by the existence of many employers. As we have seen,
a person who has only one possible employer has little or no
protection. The employers who protect a worker are those who
would like to hire him. Their demand for his services makes it
in the self-interest of his own employer to pay him the full value
of his work. If his own employer doesn't, someone else may be
ready to do so. Competition for his services—that is the worker's
real protection.

Of course, competition by other employers is sometimes strong,
sometimes weak. There is much friction and ignorance about opportunities.

It may be costly for employers to locate desirable employees,
and for employees to locate desirable employers. This
is an imperfect world, so competition does not provide complete
protection. However, competition is the best, or, what is the same
thing, the least bad, protection for the largest number of workers
that has yet been found or devised.

The role of competition is a feature of the free market that we
have encountered time and again. A worker is protected from his
employer by the existence of other employers for whom he can
go to work. An employer is protected from exploitation by his
employees by the existence of other workers whom he can hire.
The consumer is protected from exploitation by a given seller by
the existence of other sellers from whom he can buy.

Why do we have poor postal service? Poor long-distance train
service? Poor schools? Because in each case there is essentially
only one place we can get the service.
----------------Quote ends here.

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