1. Brian says

    OK, this won’t be popular at all, and for what it’s worth, I’m as liberal as they come. But I happened to do the same job as Mitt did for a long time, mostly in Asia. And what he’s saying is mostly true. When we bought companies in Asia they usually had terrible working conditions, low environmental standards, often problems with corruption. Of course we’re buying these companies to make money, but the improvements you can make on the ground in these countries is a definite side benefit. Having said that, all workers in Chinese factories live at the factory in dorms, and I doubt Bain changed that, but Im sure wages, working conditions and environmental compliance all improved substantially.

    As for the “you have it made if you’re born in America” thing, that’s just stupid, but Mitt wouldn’t be Mitt without saying something stupid.

  2. DannyEastVillage says

    No unions, no health care, no retirement pension, no OSHA standards, no EEOC enforcement, no minimum wage, no business tax.

    That’s a list of things republican have been trying to do away with in this country since they first became law. Every republican administration goes after all those things – again and again.

    As for your posting, Brian, I wouldn’t bet the farm on the points you made about wages and working conditions. And–environmental compliance? Arent’ those kinds of laws as they’re on the books in this country what corporations go to Asia and Africa to avoid?

  3. DannyEastVillage says

    The other thing that kills me abou this story is how it exposes how the 1% ignore the fact that for most people in this country–and certainly now more, perhaps, than ever, “95% of life” is FAR from settled. In reality, most us life with a tremendous amount of uncertainty – perhaps even paycheck to paycheck, hoping to god that we or our children don’t get sick.

    This country has a history of constructing a “safety net” so that one didn’t have to worry about losing job, health, home and so on. However, republican have systematically set about taking that safety net apart, strand by strand, so that most of us are ever more at the mercy of those who already enjoy way too much privilege.

  4. Brian says

    First off, of course there are unions; it would be impossible for China to be even nominally Communist without labor unions. And there are taxes too, and environmental standards. I don’t remember if there’s a minimum wage because the market had moved well above the minimum in most sectors. So it’s far behind the standards of the West, but there are definitely standards. And Western firms always pay more and worry more about environmental issues than the local firms. Western manufacturers mostly go to china for access to the local market and for lower wage costs, not to pollute more. But of course they benefit from laxer envirnomental standards and worse working conditions by outsourcing to/buying from locally run companies, who have more leeway in getting around these rules. And as for private equity firms, we just wouldn’t invest in a company that wasn’t compliant with local laws and international standards. The risk of arbitrary enforcement by the local government or showing up on the front pages of the papers back home far outweighs any savings. And of course it’s the right thing to do.

  5. gregory brown says

    Communist regimes have historically destroyed genuine labor unions, replacing them with the equivalent of “company unions”. Ideally, communism respects working people–but in Russia, China and elsewhere, the state apparatus fell into the clutches of elites that disdain and fear workers if they think and act in their own interests outside the limits set by the rulers.

  6. Brian says

    Yes, Gregory, I agree with that. Unions have historically been used more as organizing devices for the party rather than a tool for improving working conditions. This makes sense of course since historically all the factories were owned by the state, so the party had little interest in organizing workers to push back against the state owned companies. It’s somewhat different since private companies became entrenched in the nineties. There is a much more confrontational attitude between unions and management, and the government often sides with the workers, since there is no great affection for the private sector within most parts of the government.

  7. jsb says

    Brian, I might possibly believe you if it weren’t for all of the problems with products coming from China that DON’T meet quality standards, levels of lead in childrens toys being one example. I remember in 2008 that China had to shutter most of their factories in order to get the pollution levels down for the Olympics.

    So I’m just not buying your story.

  8. Brian says

    If you’ve been to China you’d know it’s one of the most polluted places on earth. The air literally burns your eyes in Beijing, and is a thick yellow soup for months on end. The rivers are clogged with garbage, I was on a boat for four days on the Yangtze River and it was a sea of plastic bottles and flip flops for some reason. As I said above, while there are environmental laws, locally owned companies regularly find ways to circumvent them. Remember the biggest polluters are state owned, so they can pretty much do what they want to do. But that’s exactly the point I’m trying to make, once a company is bought by private equity, or a Western company sets up shop there, standards improve dramatically. The local companies still spew filth, I’m just saying that private equity owned (and western owned generally) companies have much better environmental standards and workplace conditions, which is what Mitt was alluding to.

  9. Joey says

    Brian… when you start defending rich America and how they benefit the world. It is best not to start out with the statement “I’m as liberal as they come”. It is kind of a tip off.

  10. redball says

    Brian: Just what is the incentive for a Western-owned company to improve working conditions or environmental practices if there are no laws or legal enforcement for those laws? Poor rule of law is unfortunately common in much of the developing world…which is why these multinationals are soooo very much attracted to those countries.

    Tobacco is a great example. After Western countries started restricting Big Tobacco’s ability to advertise (particularly to children), and started taxing their products (oh, and those lawsuits!), the industry simply flew like vultures overseas to poor countries that didn’t have those laws to prey on people there (and esp. young children). Countries like Nigeria now have smoking rates that are horrific and will lead to a surge of deadly cancer cases in the next several decades.

    Your claims don’t sound credible. At all.

  11. Brian says

    I don’t want to spend the rest of the day defending capitalism or companies. I agree they do a lot of bad things, and tobacco is a particularly vile example of corporate greed. But Americans have a warped understanding of emerging markets. In many instances they have tougher laws than in the US. Most Asian countries banned cigarette advertising years ago, and many require plain packaging with gory pictures of cancerous lungs on the pack where the logo would be in the US.

    The problem endemic to emerging markets is corruption. While there are plenty of laws on the books, local companies find it easy to get around these laws. Western companies by and large don’t, either because they’re afraid of negative publicity in their home countries (or jail time in the case of US based companies), or because they’re always vulnerable to government persecution if they don’t obey all the laws. A local competitor can have a Western company shut down immediately if it breaks the law. So those are the practical reasons why Western companies are better employers than local ones. I’m not saying they’re angels, but it’s indisputable that anyone would rather work for a western multinational than a local company.

  12. Jakke says

    Brian, you sound like the Tea Party people that scream up and down that they’re not only white Republicans, that all sorts of people, even blacks and Democrats are part of the group. You just aren’t being honest. China isn’t a great place to live and work for the average person. It doesn’t benefit the world to have slave labor. Arguing otherwise doesn’t make you a liberal either.

  13. Not Brian says

    @Brian You are a fount of misinformation.

    The minimum wage in China is set by provincial and municipal governments and there is variation even within those political entities. It is possible within a province to have two or three rates. It is also not uncommon for those minimums to change. The effect of this scheme is that there is no meaningful minimum wage in China.

    Your generalizations about Western companies in China do not appear to be informed by any actual experience there your claims to the contrary notwithstanding. There is great variation in how Western companies treat their Chinese employees. The more insidious practice of Western companies is to outsource functions, such as manufacturing, to local companies that have visited some horrific abuses on workers in China.

    If you want a sense of what is wrong, look at the standards of the Fair Labor Association, a pro-business group. They had to adopt standards that said, among other things, no child labor and no prison labor. When a business group has to tell its members that they can’t do things that are obviously and self-evidently wrong, it doesn’t speak well of the moral center of these companies.

  14. Brian says

    OK, this is getting out of control, so this will be my last post. Read any of my hundreds of comments on all sorts of topics here and you’ll see I’m just as liberal as any of you. And you’re just so blinkered with your conformist dogma that you can’t follow an argument that strays just a little bit out of your comfort zone. If you reread what I wrote here, all I said is that working conditions in Western companies are better than local companies in emerging markets. That was the only normal point that Romney made in this speech, and he’s right. The rest of what he said is the usual garbage. But somehow saying this gets me accused of acting like the tea party, being in favor of slave labor, and for some reason trying to trick you into thinking China’s a great place to live. I’m waiting to be called a Nazi soon.

    Look, I’ve lived and worked throughout Asia for a long time, and I know what I’m talking about. I appreciate some of the earlier comments, because they also raised points backed by facts without resorting to content free name calling. For those of you who don’t know anything about this subject, I was hoping I could shed a bit of light. It’s clear, however, that many of you just want to argue and not be bogged down by fact or logic. Sounds a lot like the Republican party, actually.

  15. Brian says

    I wrote my last post while Not Brian was writing his, so just one last rebuttal. Not Brian, you call me a fount of misinformation for two reasons. First, because I said there is a minimum wage in China, when you say there isn’t, and second, you say that Western companies behave badly because they outsource to local companies. Now, if you read what I wrote, on your first point, I specifically wrote that “I don’t remember if there’s a minimum wage”, and in any event wages are skyrocketing relatively speaking in China, so it really doesn’t matter in most cases.

    As for your second example of my stupidity, again I specifically bring up outsourcing as a way for Western companies to behave badly in terms of pollution and workplace standards. Again, if you’re going to attack someone, it just makes sense to read what they’ve written before you attack. You bring up two specific accusations that are patently not true, and this was established even in my very first comment.

    Now I’m really done, so feel free to fling more false accusations about what I said.

  16. Jakke says

    Brian, so this was your job for a long time, why would you bash it? Why would you denounce what you’ve spent years doing? You’re a biased source. You’re not going to get us to believe that everything is hunky dory and awesome in China. Screech that we’re conformists or we’re not reading simply because we disagree with you — whatever makes you feel good, but it is what it is. Slave labor isn’t good for them and it shouldn’t be good for us.

  17. andrew says

    Make no mistake about it there is a real danger that Romney and the forces of the right will capture the White House in November. If that happens you can kiss all of your progressive agendas goodby for at least a generation.

  18. Not Brian says

    Ugh. What you wrote originally was that “I don’t remember if there’s a minimum wage because the market had moved well above the minimum in most sectors.”

    Apparently, you know that employers in China are paying more than the minimum, which means you know what the minimum wage is, but you don’t know if China has a minimum wage. Which is it? For someone who claims to have extensive experience working in Asia, you appear to know nothing about that labor market.

  19. Homer says

    @Brian – sorry – just had to respond to the general theme of your posts.

    I haven’t been to China as you have but to think that there is going to be a substantial change in the treatment of workers and their living conditions just because a Western company is buying that factory is a little bit naive. China is China. It will go on its way despite Western financing which can only bring a palliative amount of relief. Obviously, as a foreigner, you will be shown what you want to see but while your tour of the factory ends, life goes on at the other areas you didn’t see.

  20. Brian says

    OK, I’m breaking my self imposed exile from this post because these comments are just driving me crazy. First, Jakke, you’re just too stupid to deal with. Where am I bashing my job? I’m saying again and again that the job does good things in emerging markets, which is why I keep getting attacked by everyone. And where exactly do I say I’m pro slavery in China and want to bring slavery to the US??? I can’t deal with you.

    Not Brian and Homer, just to clarify, I was an employer in China for over a decade. I bought four companies in a variety of industries and regions. I’m not being naive or just making things up. I said I don’t know about the minimum wage because we were paying substantially higher wages than our local competitors. Whether our local competition was paying minimum wage or just the local market wage, I don’t know, which is why I said I don’t know. We paid substantially higher wages than local companies, which is my whole point. Partly that was because we thought we should, and partly it was to reduce turnover, since workers at local firms were always quitting and looking for other higher paying jobs. We wanted to stop that, focus more on training etc. This isn’t something special we did, it’s the way most Western companies operate there. So that answers your first “ugh” and your second flawed point, that I ignored outsourcing, remains unanswered. Ugh.

    Homer, I appreciate your more civil tone. Again, maybe I didn’t make my experience clear, but to repeat I’m not just hypothesizing. I’ve seen it happen again and again. I had an auto parts company in northeast China, where I was a director for over a decade. I visited once a month, and knew the company inside and out. I’m not talking about taking a factory tour, I’m talking about running the place, setting the wages, inspecting the factories, etc I’m not saying private equity has or will change China. I’m not saying China is a great place to live. I think I’ve dwelled a long time on the many negatives of China. All I’m saying is that working conditions and environmental compliance improve when a private equity firm (or most Western companies) run a company in china vs the local competition. It’s a very narrow, frankly boring point, but I have to keep repeating it because for some reason it gets interpreted as being in favor of slave labor.

  21. BobN says

    Brian, whatever positive influences you say western companies bring to China, it remains a fact that vast investments have been made in China by AMERICANS like Mitt Romney because whatever standards they did implement were FAR LOWER than those in any other place on earth.

    I remember the GOP senators and congressmen insisting that we couldn’t “impose” our environmental and labor standards on China and assuring us that the market would sort it out. I don’t doubt that you’re right about SOME western companies being better than MOST Chinese-owned companies, but that doesn’t change the fact that they would have been a lot better if America had tried to control outsourcing 20 to 10 years ago.

  22. mimi says

    i’m wondering why, if you’re so liberal, you didn’t set up shop right here in your home country . Then, your boast aboujt paying substantially better wages would mean something. Frankly, if i owned a company there, I’d be too ashamed to admit it, let alone boast about employing standards of operations which were decent only in comparison to China’s abusive standards. Congratulations. I’m sure you made a killing and avoided all the responsibility of being a good corporate citizen.. Thank goodness we still have some liberal business owners around.

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