Foreign Policy wrote an interesting article on 10 Reasons Countries Fall Apart, and I am writing parallel posts about Western businesses in Asia. I believe they have the opportunity to bring prosperity to Asia, and are missing that opportunity in some ways.
Obviously, I am no expert on what I want to write about – I am just a simple person with some observations and personal experiences. My introduction to this series of posts will explain this all better.
4. The Big Men Get Greedy – The Little People Get Stuck
Foreign Policy uses Egypt as an example where a powerful family looked after close mates, namely Hosni Mubarak, and the “whales” who “received not only protection from the state but also government contracts and large back loans without needing to put up collateral.” As FP explains “their stranglehold on the economy created fabulous profits for regime insiders, but blocked opportunities for the vast mass of Egyptians to move out of poverty.”
I observe similarities to this with multinational corporations with exceedingly large budgets and prestigious brands in Asia. CEOs of these corporations stand to earn fabulous sums of money, the corporations also stand to earn fabulous profits, all benefiting from the low taxes and the cheap labour. The entry level employees, and the support staff, in the corporations generally earn very small wages and have little recourse to negotiating higher benefits. What is considered a ‘benefit’ in Asia is company outings to theme parks, or paid weekend vacations to overseas hotels. With CEOs of corporations tending to be great chums with government officials or hopeful future government officials (and in Singapore, the interesting concept of tripartism and prohibition of industrial action), wages are kept at the lowest point possible. And I don’t mean the lowest point possible of an ethical decision of what is affordable for a person to live off – I mean where supply meets demand, where as long as there aren’t enough jobs a person will be desperate enough to work for $5 an hour. (For context, a Starbucks coffee costs $5, so 1 hour of work equals 1 cup of ‘luxury’ coffee.)
|An advertisement board for a local restaurant where the most you can earn is $12/hr (between midnight-4am), and a set meal costs $15/hr (it’s for basic Thai food)|
I believe a society that is the most successful has the least distance between the rich and the poor. I believe strangleholds on working conditions means entire societies struggle for their own survival while a few benefit in disgusting disproportion. Western business would bring prosperity to Asia by disregarding Asian custom of ‘benefits’ and working towards paying fair wages for real lives. If an employee wants to spend their wage on a holiday rather than their only opportunity being the company excursion – power to them. But they could also choose to spend their higher wages on education for themselves or their children, they could afford higher health care insurance premiums for better coverage, they could make retirement savings, they could afford free range eggs(?). I just think that it’s so much fairer to pay wages that are commensurate to the costs of living (not survival) and that gives employees power over their own lives. Of course that means less money in the pockets of the CEO or the corporation – but that doesn’t mean an unattractive profit overall. It just means letting the little people have a go too.
Of course, this is all written from my simple observation and personal experience. So what do I really know? I am definitely no authoritative expert on this subject – I look forward to your take on it all. Please, do comment below.
Btw, if you’re wondering how I can be employed in HR, and write about HR – here‘s my explanation.