Discussion: What if there was no ‘cheap labour’?

This post is an open thread. My question is: what if there was no “cheap labour”? I’m asking because, depressingly, I have never heard this seriously discussed. And I’m putting it in quotation marks because it’s a term I hate. Is there a prevailing ideology among the nobs and bigwigs and mandarins and politicians? Have they discussed it at all? My gut feeling is that this is too utopian to make the discussion table.

Businesses like growth. They like to watch avidly as nice, populous countries slide over the income threshold to start buying whatever it is they’re selling. However, there is a fundamental tension here: they want economic growth, but they also want “cheap labour”.

In her book, No Logo, Naomi Klein explains how multinational outsourcing of clothes manufacturing was a race to the bottom. Once one company had upped sticks and moved its production to developing countries, everyone else simply had to follow suit to compete. Apparently.

Imagine if that wasn’t an option. Imagine if all of the countries in the world had the same wages as today’s rich countries. What would the implications be?

Most obviously, things would get more expensive. Salaries make up varying proportions of the costs for different items, so it might be more noticeable for some than others.

If Things were more expensive, we would buy fewer Things. Less retail therapy. Fewer impulse buys. Would we value quality manufacturing and durable goods again? It’s almost as if – whisper it quietly – we would stop commodifying things!

Food waste

Presumably we would start by cutting out the least necessary things, but it might also prompt us to be more sensible with essentials like food. We waste a vast amount of food nowadays. It inflates food prices and increases greenhouse gas emissions. The EU is looking into it and everything.

What I find more interesting are the implications for countries which don’t have first-world wealth. It’s beyond this post’s scope to even contemplate whether international wage equality would mean equal living standards. We don’t even have that within the wealthiest countries today.

It would be massively insulting to try to predict how cultures would change if they had the same opportunities as we do in more privileged climes. So if this post seems to lack human insight, to skimp on humanity in favour of the hard mechanics of it all, that is why. But I’m allowing myself this one example.

We’re very big on motivation in the UK. At school, we were told to aim high, work hard, and never give up on our dreams. In some places, it’s the polar opposite. Rigoberta Menchu, the Guatemalan Nobel Peace Prize laureate, has spoken of how her parents would explain to their growing children that they would never achieve their dreams. Dependent as they were on seasonal plantation work for starvation wages, they should be prepared for a life of the most extreme hardship. I bet the owners would have described them as “cheap labour”.

Beyond the bare basics

Billions of people are impoverished today. In this vision we’re contemplating, would their ability to buy things beyond the bare basics compensate for these retrenchments in the west, deprived of its present exorbitant privilege? It seems like we might return to local products: if everywhere makes things at the same cost, having the factories half way round the world is no longer an exploitative economy – just a pain in the arse.

Judging by past trends, people would become very keen on automation. Chinese companies are already starting to report problems with labour costs. The US Department of Agriculture is already saying that these companies will need to mechanise.

What would we all be doing for a living in that case? Working in a rich post-industrial knowledge economy in the way that the UK, I understand, views itself? What about hyper-technical manufacturing like Germany? Of course, those suggestions both presume that we continue in the vein of our current models. How about a six-hour working day and less stigma surrounding unemployment? I mean, we might find that we don’t actually need all of the people working all of the time.

Could modern business cope if everywhere was equally prosperous? Would we reach a fresh equilibrium, or would it mean the end of capitalism as we know it? My personal feeling is that businesses are dangerously dependent on other people living in abject poverty. In the kind of conditions that chief executives would give life and limb to save their own children from. Most don’t go as far as wishing for poverty, but they could certainly decry it louder. And that should worry us.

Dear readers, I’m interested to hear what you all think. Please comment. You probably have a better idea about these things than I do.