Follow on TwitterMeasuring Meritocracy: Upward Mobility In U.S. Is Lower Than In Canada & In Most Of Europe
To measure meritocracy within a nation’s economic system, economists tend to compare the relative incomes across generations.
An economic system that truly emphasizes meritocracy ensures that the income of a person’s parents have no bearing on his or her ability to succeed.
In a piece in The Economist, entitled “Like Father, Not Like Son,” it is revealed that an individual’s success in the U.S. is more dependent upon his/her “parents’ position on the income ladder” than in Canada and in most all of Europe:
Individual families’ fortunes over time can now be tracked by statistical surveys. This allows economists to measure how much parents’ position has influenced their adult children’s relative income or education. The resulting coefficient, the inelegantly named “inter-generational elasticity of income”, is today’s main measure of social mobility. The higher the coefficient, the less mobility there has been.
This technique shows Scandinavian societies to be very mobile. Only around 20% of parents’ relative wealth (or poverty) is passed on to their kids. China, in contrast, is fairly immobile: 60% of income differences persist between generations. The big surprise is the United States, where parental income explains around half of the differences in adult children’s income, much more than in Canada, and more than in any European country except Italy and Britain. According to this measure, social mobility in America now is lower than in most of Europe.
So, those in pursuit of the “American Dream” might want to relocate to our northern American neighbor, Canada, where that dream apparently still exists.
VIDEO: Here Is What Unregulated, Non-Unionized Capitalism Looks Like: Apple’s iFactory In China
Suicide nets under every window.
Conservatives have long derided organized labor and business regulations as some sort of insidious ‘socialist’ cancer that stymies innovation, fleeces hardworking business owners, crushes prosperity and investment capital, and dampens economies with high inflation and high unemployment.
They contend that when corporations are left unburdened by oversight and regulations, to pursue their own profit-maximizing interests, that this will always — as if by an invisible magical hand — optimize the interests of the society in which they operate.
Obscenely naive or deeply disingenuous, this ideology has been disproved over and over again, since the beginning of the industrial age. In a global economy, the moment a nation catches on — usually when its citizens’ quality of life deteriorates to the point of social unrest — and moves to remedy the situation with more regulations, and by easing organized labor restrictions, the corporations begin to look around to other developing countries for exploitative opportunities.
This now familiar business cycle is especially prominent in sectors that require an educated and highly skilled workforce. This is because higher education is generally funded, not by corporations or government, but by labor itself. This limits the supply of skilled labor, and forces corporations to compete with one another for these self-educated workers, thereby pushing wages upwards.
But unlike labor, who are restricted by national borders in search for employment, corporations are free to roam the world for cheap labor. And corporations have no loyalty to the citizens who reside within the countries they operate. Why pay a premium for an employee with a unique level of expertise, when potential employees with similar skill-sets are being grotesquely undervalued overseas? After all, a corporation’s charter commands it to exploit resources and labor as cheaply as is possible in order to maximize profits.
At the moment, China happens to be one of those developing nations with a massive poverty-stricken population — ripe for corporate exploitation.
And what better iconic ‘American’ corporation, but Apple — manufacturer of the world’s most beloved technology products and gadgets — to demonstrate this corporate flight towards labor-exploitative opportunities.
China is a country which conservatives would consider an ideal, unregulated, business-friendly environment. Rather than demanding China raise its labor standards, conservatives would rather weaken U.S. labor standards to be more like China. The conservative plan for bringing jobs home is little more than a race to the bottom. By union busting, cutting government jobs, and further deregulation, American workers will find themselves as powerless and exploitable as our counterparts in developing countries. This, they believe, will make America more ‘competitive.’ This is their ‘free market’ ideology, in a nutshell.
In the following video, ABC’s Nightline was granted unprecedented access to Apple’s factories (owned by FoxCon) inside China. When you see the conditions in which these employees operate, you realize why decent paying American jobs are disappearing, and, as Apple’s recently-deceased CEO admitted to President Obama, “they aren’t coming back.” You begin to understand why young Americans are now questioning whether it even makes economic sense to assume huge amounts of debt in pursuit of higher education.
If you take one thing away from this video, I hope it is that this is not merely an American problem. It is a world problem. The only way to raise the living standards of Americans will be to raise it for everyone else in the world, because this is truly a global economy. And that process begins with rewriting all of our trade deals in ways that empower workers in every single nation, across the world.
Some highlights from Nightline’s reporting:
- Apple’s Chinese employees work 12-hour shifts, broken up by two-hour meal breaks, and often seven days per week.
- Employees work so long and so hard on the assembly line, that most eat their 70 cent meals at the company canteen quickly, so they can catch up on lost sleep at their work stations. (the video shows them all sleeping side-by-side during their lunch break)
- Many employees live in dorm rooms, shared by seven other workers, and will each pay $17.50 per month for this. This allows Apple to have workers on-call 24-7, in case they ever need to quickly scale-up production, at a moment’s notice.
- Most employees have left their families to work here.
- ‘Suicide nets‘ have been installed under the windows of all FoxCon employees to prevent them from killing themselves. A year ago, nine employees jumped to their deaths in the span of 3 months.
- Last year, poorly ventilated aluminum ducts, which the company had been warned about by human rights groups (an accusation the company does not deny), caused two separate explosions in iPad polishing stations, killing four employees and injuring seventy-seven.
- Literally thousands of people (over three thousand on this particular Monday) line up daily at FoxCon’s recruitment center, waiting hours on end, and many carrying suitcases. They are desperate to work there for $1.78 per hour. Demand for Apple products is so high, that FoxCon will hire 80% of them.
- To help manage the controversy that erupted after the NY Times’ recent article, In China, Human Costs Are Built Into An iPod, Apple joined the Fair Labor Association. But Apple paid the group $250k to join, and also pays for all its pre-arranged — never by surprise — audits, leading many to believe there is a deep conflict of interest, and is little more than a ploy to whitewash their labor practices.
- ABC revealed most all of the employees they spoke with complained about their low-pay, expensive lunch prices, and crowded dorms, but there was nothing they could do about it, as unions don’t exist there.
Sounds like a Conservative Utopia!
WATCH:
Is the World Dumping the American Dollar as its Global Currency?
Robert Fisk of the Independent is reporting today:
In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.
Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.
The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years
Several factors may have led to this major turn of events:
- The ever-declining value of the U.S. dollar, rock-bottom interest rates, reduced prospects for growth (in large part from its present economic downturn), and seemingly out-of-control U.S. spending deficits. These have led many countries to question the underlying future stability of the U.S. currency – one for which they’d rather not sell their products.
- China’s growing financial dominance and expanding influence in the region, where more than 10% of every Middle Eastern country’s imports originates from China. The Chinese appear to have spear-headed the move away from the greenback. Over the last decade, China became heavily invested in U.S. treasury bonds and other dollar-denominated assets – invested from its extraordinary trade surpluses. The Chinese essentially underwrote Bush’s tax cuts for the wealthy, the Iraq War, and are now funding America’s bank-bailouts, and recession-recovery spending. It would like to ween itself off this current conundrum – thereby allowing itself to diversify its dependencies on the dollar. But it must do so gradually, or risk devaluing its own U.S. dollar holdings, which currently accounts for much of its wealth (China is the world’s biggest holder of U.S. Treasuries). For this reason, the group has set a date of 2018 (nine years) to complete the transition from the U.S. dollar to a basket of other currencies.
- Couple China’s new financial dominance with growing bitterness of the Arab states over US policies (Israel, Iraq, and, in particular, its power to interfere in the financial markets) and you’ve got yourself a global monetary coup d’etat. Brazil and India have also expressed interest in completing their oil deals in non-dollar denominations.
How did the current global financial system become dollar-denominated in the first place?
Ever since the Bretton Woods agreements – the accords after the Second World War which bequeathed the architecture for the modern international financial system – America’s trading partners have been left to cope with the impact of Washington’s control and, in more recent years, the hegemony of the dollar as the dominant global reserve currency.
The Chinese believe, for example, that the Americans persuaded Britain to stay out of the euro in order to prevent an earlier move away from the dollar. But Chinese banking sources say their discussions have gone too far to be blocked now. “The Russians will eventually bring in the rouble to the basket of currencies,” a prominent Hong Kong broker told The Independent. “The Brits are stuck in the middle and will come into the euro. They have no choice because they won’t be able to use the US dollar.”
Upon the very release of this news in today’s Independent, the U.S. dollar nosedived towards year lows against the Yen and the Euro.
A Chinese Banker at the G20 Summit had this to say:
These plans will change the face of international financial transactions. America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate.
The Associated Press reports:
Officials in several of the countries either denied talks or said they had no knowledge. But the denials did not stop the dollar sell-off.
Fisk reminds us that the motivation for wars most often boils down to dollars and cents (in this case, literally):
Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.
Considering the impact a global desertion of the greenback would have on the American economy and its standard of living, it certainly seems plausible.
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