Sociological Images

For the last week of December, we’re re-posting some of our favorite posts from 2011.

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The US economy faces a number of challenges—among them a lack of job creation and an ever-growing trade deficit. Many policy-makers believe that encouraging business innovation is the best response to these particular challenges. Sounds plausible but experience suggests otherwise.

The best example of why simply encouraging business innovation is not the answer for our employment and trade problems is Apple and its iPhone.

The iPhone was introduced in 2007 and has been incredible successful.  U.S. sales soared from 3 million units in 2007 to over 11 million in 2009.  Global sales topped 25 million in 2009.

While the iPhone is designed and marketed by Apple, almost all the phone’s components are produced by foreign companies operating outside the United States.  These components are then shipped to China where Foxconn, a Taiwanese company, oversees their assembly and their export to the United States and other countries.  As a result, the iPhone generates few jobs in the United States.

Two economists, in an Asian Development Bank working paper, examined the iPhone 3G production process in some detail.  The table below, taken from their study, highlights the main suppliers and the costs of the components they produce for a single phone.  Most of the components are supplied by Japanese, South Korean and German firms, although there are also some U.S. suppliers (although who knows where they actually produce their compnents).

The total component cost of an iPhone in 2009 was $172.46.    Workers in China assemble the iPhone, but because their wages are low the assembly cost per phone (labeled manufacturing costs in the table below) is quite small, only $6.50 a phone.  The total production cost per phone is $178.96.

Because the iPhone is assembled in China all sales in the U.S. mean an increase in Chinese exports (even though the phone is largely composed of inputs produced outside of China) and an increase in U.S. imports.  In 2009, China exported more than $2 billion worth of iPhones to the United States.  Thus, the iPhone, because of the Apple’s production strategy, also adds to the U.S. trade deficit.

Apple is not alone in embracing China as its production base.  China is now the world’s largest exporter of manufactured goods. And, as the chart below shows, the share of Chinese exports that are labled high technology is growing.  This trend has encouraged many analysts to claim that the U.S. is now locked in fierce economic competition with China.

However, as we see next, more than 80% of China’s high technology exports are actually produced by foreign companies operating in China.  Moreover, these foreign companies have significantly increased their control over this production.  In 2002 foreign owned firms that were 100% foreign owned (which means that they had no Chinese partner) accounted for only 55% of Chinese high technology exports.  In 2009 they accounted for 68%.

Why do so many transnational corporations choose to locate production in China?  The answer is obvious: profits. Apple again serves as a good example.  The table below, taken from the Asian Development Bank working paper cited above, shows Apple’s profit-margin on the iPhone.  In 2009 it was a whopping big 64%.

Struck by the size of Apple’s profit-margin, the authors of the Asian Development working paper considered whether the iPhone could reasonably be made in the United States.  As they note:

The role of the PRC in the production chain of iPhones is primarily the assembly of all parts and components into the final product for re-shipment abroad. The skills and equipment required for the assembly are very basic and there is no doubt that American workers and firms are capable of assembling iPhones in the US. If all iPhones were assembled in the US, the US$1.9 billion trade deficit in iPhone trade with PRC would not exist. Moreover, 11.4 million units of iPhone sold in the non-US market in 2009 would add US$5.7 billion to US exports.

For the sake of discussion, they assumed that assembly line wages in the U.S. are ten times higher than in China.   Given that Chinese production workers earn roughly $1 an hour, that is not an unreasonable assumption.  The higher wages would mean that the total assembly cost per phone would rsie to $65 and the total manufacturing cost would approach $238.  If Apple continued to sell the iPhone for $500, the company would still earn a very respectable 50% profit margin.

Moreover, as the authors point out:

In this hypothetical scenario, iPhones, the high-tech product invented by the U.S. company, would contribute to U.S. exports and the reduction of the U.S. trade deficit, not only with the PRC, but also with the rest of world. More importantly, Apple created jobs for U.S. low skilled workers; those who could not be the software engineers needed by Apple. Giving up a small portion of profits and sharing them with low skilled U.S. workers by Apple would be a more effective way [than depreciation of the exchange rate] to reduce the U.S. trade deficit and create jobs in the United States.

Of course, shifting production to the United States would mean that Apple would earn less money and there is little reason to believe that the company is prepared to sacrifice its profits for the good of the country.  If we want to tackle our employment and trade problems were are going to have to do more than promote more attractive conditions for business.

Cross-posted at Family Inequality.

In some societies it is expected that newly married couples will move into the husband’s family home.  This is called a “patrilocal system” or a ”custom of marriage by which the married couple settles in the husband’s home or community” (OED).  Patrilocality is bad for women’s status: as outsiders in their new homes, they are alone and disconnected from their own families.

Patrilocal China

The patrilocal system in China is one of the foundations of its unique form of patriarchy, embedded in the religious tradition of family ancestor worship — and in the language.

This came up because I was learning the Chinese word for grandmother, which, like other family relationship words, differs according to the lineage in question (maternal grandmother, paternal grandmother, etc.). A common traditional term for maternal grandmother is wài pó, 外婆:

Those two characters separately mean outsider and woman. (If you put a space between them in Google translate, the English translation is “foreign woman.”) For comparison, the common term for paternal grandmother is nǎinai (奶奶), which is the word for “milk” twice.

Words as Gendered Images

I had been working on Chinese Characters for Beginners, and with my recent focus on language for union or marriage types (homogamy and heterogamy for same sex and other sex marriage, respectively), on the one hand, and sexual dimorphism / gender, on the other, I was sensitive to my first lesson, in which I learned that the word for good is woman+son (好):

And the word for man is field+strength (田+力=男):

Someone who knows more about languages can say whether or how Chinese reveals more about the cultural contexts of its word origins than English does.

In the one-child-policy era the patrilocal tradition has become especially harmful to women. That’s because the lack of an adequate state pension system has increased the need for poor families to produce a son — a son whose (patrilocal) marriage will bring a caretaking daughter-in-law into the family — and decreased the return on investment for raising a daughter, who probably will leave to care for her husband’s parents. One consequence, amply documented in Mara Hvistendahl’s book Unnatural Selection, has been tens of millions of sex-selective abortions.

So, the next time someone sees a common pattern of gendered behavior, and attributes it to genetics or evolution, I’m going to ask them to first demonstrate that the pattern holds among people who aren’t exposed to any language at all (and raised by parents who haven’t been exposed to language either). Otherwise, the influence of ancient cultures is impossible to scrub from the data.

Cross-posted at Bytes of China.

Oh how this Toyota Highlander advertisment is reflective of the new global order.  I saw this picture in Guangzhou’s domestic terminal. A Chinese couple is getting out of their Japanese brand car into what appears to be a private yacht. A white male greets them, taking their travel items and appears to be eager in their service.

This advertisement reflects a new Chinese imaginary — one that is global, expansive, unlimited, and exploratory. It also tells us who has the power to live out this imaginary. Ten years ago or even five years ago, I don’t think this advertisement would’ve existed. But now companies have turned to the Chinese consumer, encouraging them to participate in this lifestyle. The entire global economy right now depends on the Chinese elite and middle-class to spend. But how long can this go on for until we see the next crisis? For how long can each system create “value”?

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Tricia Wang is an ethnographer, sociologist, and researcher. She is on a Fulbright in China observing how digital technologies are mediating new conceptions of information and desire among youth & migrants. She is a student at UC San Diego’s PhD Sociology program.  She blogs at Bytes of China.

Thanks to Benjamin B. for the tip!

Time Magazine (2009) reports that McDonald’s has approximately 32,000 restaurants in 118 countries. Of those, only about 45% were in the United States. The key to success of the American restaurant chain in other countries is to adapt its business to the local culture.

For example, today McDonald’s operates approximately 1,000 restaurants in China.  In the book McDonald’s: Behind The Arches, Yunxiang Yun argues that it has been successful in Beijing because it has become a fun place to hang out. While it seems foreign to many Westerners, who think of McDonald’s as a place to buy cheap food quickly, many Chinese people eat there because of the atmosphere and service. More, the food isn’t associated with obesity, as it is in the U.S.

This perception of McDonald’s has made it a sought out location for weddings. Er, McWeddings.

A McDonald’s nuptial package in Hong Kong costs about HK$10,000 (US$1,300).   According to the New York Times, a McWedding…

…includes food and drinks for 50 people… a “cake” made of stacked apple pies, gifts for the guests and invitation cards, each with a wedding photo of the couple.

The ability to reinvent itself is the key to the Golden Arches’ success in China.  It also suggests that the associations Americans have with the chain aren’t inevitable, but specific to cultural context.  Projected to double the number of stores by 2013, it will be interesting to see what other adjustments McDonald’s makes down the road.

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Sangyoub Park is an assistant professor of sociology at Washburn University, where he teaches Social Demography, Generations in the U.S. and Sociology of East Asia. His research interests include social capital, demographic trends, and post-Generation Y.

If you would like to write a post for Sociological Images, please see our Guidelines for Guest Bloggers.

The U.S. economy is in trouble and that means trouble for the world economy.

According to a United Nations Conference on Trade and Development report, “Buoyant consumer demand in the United States was the main driver of global economic growth for many years in the run-up to the current global economic crisis.”

Before the crisis, U.S. household consumption accounted for approximately 16 percent of total global output, with imports comprising a significant share and playing a critical role in supporting growth in other countries.

…as a result of global production sharing, United States consumer spending increas[ed] global economic activities in many indirect ways as well (e.g. business investments in countries such as Germany and Japan to produce machinery for export to China and its use there for the manufacture of exports to the United States).

In short, a significant decline in U.S. spending can be expected to have a major impact on world growth, with serious blow-back for the United States.

There are those who argue that things are not so dire, that other countries are capable of stepping up their spending to compensate for any decline in U.S. consumption. However, the evidence suggests otherwise.As the chart below (from the report) reveals, consumption spending in the U.S. is far greater than in any other country; it is greater than Chinese, German, and Japanese consumption combined.

Moreover, there is little reason to believe that the Chinese, German, or Japanese governments are interested in boosting consumer spending in their respective countries.  All three governments continue to pursue export-led growth strategies that are underpinned by policies designed to suppress wage growth (lower wages = cheaper goods = stronger competitiveness in international markets).  Such policies restrict rather than encourage national consumption because they limit the amount of money people have to spend.

For example, China is the world’s fastest growing major economy and often viewed as a potential alternative growth pole to the United States.  Yet, the Economist reveals that the country’s growth has brought few benefits to the majority of Chinese workers.

According to the U.S. Bureau of Labor Statistics, despite several years of wage increases, Chinese manufacturing workers still only earn an average of  $1.36 per hour (including all benefits).  In relative terms, Chinese hourly labor compensation is roughly 4 percent of that in the United States.   It even remains considerably below that in Mexico.

Trends in Germany, the other high-flying major economy, are rather similar. As the chart below shows, the share of German GDP going to its workers has been declining for over a decade.  It is now considerably below its 1995 level.  In fact, the German government’s success in driving down German labor costs is one of the main causes of Europe’s current debt problems — other European countries have been unable to match Germany’s cost advantage, leaving them with growing trade deficits and foreign debt (largely owed to German banks).

The Japanese economy, which remains in stagnation, is definitely unable to play a significant role in supporting world growth.  Moreover, as we see below, much like in the United States, China, and Germany, workers in Japan continue to produce more per hour while suffering real wage declines.

For a number of years, world growth was sustained by ever greater debt-driven U.S. consumer spending.  That driver now appears exhausted and U.S. political and economic leaders are pushing hard for austerity.  If they get their way, the repercussions will be serious for workers everywhere.

Our goal should not be a return to the unbalanced growth of the past but new, more stable and equitable world-wide patterns of production and consumption.  Achieving that outcome will not be easy, especially since as the United Nations Conference on Trade and Development’s World Investment Report 2011 points out, transnational corporations (including their affiliates) currently account for one-fourth of global GDP.Their affiliates alone produce more than 10 percent of global GDP and one-third of world exports.  And, these figures do not include the activities of many national firms that produce according to terms specified by these transnational corporations.   These dominant firms have a big stake in maintaining existing structures of production and trade regardless of the social costs and they exercise considerable political influence in all the countries in which they operate.

Cross-posted at Family Inequality.

I have criticized sloppy statistical work by some international feminist organizations, so I’m glad to have a chance to point out a useful new report and website.

The Progress of the World’s Women is from the United Nations Entity for Gender Equality and the Empowerment of Women. The full-blown site has an executive summary, a long report, and a statistics index page with a download of the complete spreadsheet. I selected a few of the interesting graphics.

Skewed sex ratios (which I’ve written about here and here) are in the news, with the publication of Unnatural Selection, by Mara Hvistendahl. The report shows some of the countries with the most skewed sex ratios, reflecting the practice of parents aborting female fetuses (Vietnam and Taiwan should  be in there, too). With the exception of Korea, they’ve all gotten more skewed since the 1990s, when ultrasounds became more widely available, allowing parents to find out the sex of the fetus early in the pregnancy.

The most egregious inequality between women of the world is probably in maternal mortality. This chart shows, for example, that the chance of a woman dying during pregnancy or birth is about 100- 39-times higher in Africa than Europe. The chart also shows how many of those deaths are from unsafe abortions.

Finally, I made this one myself, showing women as a percentage of parliament in most of the world’s rich countries (the spreadsheet has the whole list). The USA, with 90 women out of 535 members of Congress, comes in at 17%.

The report focuses on law and justice issues, including rape and violence against women, as well as reparations, property rights, and judicial reform. They boil down their conclusions to: “Ten proven approaches to make justice systems work for women“:

1. Support women’s legal organizations

2. Support one-stop shops and specialized services to reduce attrition in the justice chain [that refers to rape cases, for example, not making their way from charge to conviction -pnc]

3. Implement gender-sensitive law reform

4. Use quotas to boost the number of women legislators

5. Put women on the front line of law enforcement

6. Train judges and monitor decisions

7. Increase women’s access to courts and truth commissions in conflict and post-conflict contexts.

8. Implement gender-responsive reparations programmes

9. Invest in women’s access to justice

10. Put gender equality at the heart of the Millennium Development Goals

I’ve argued that the visual aids used in computer programs designed to help us learn new languages are ethnocentric, generic, and uninformative.  Since then, I have been working on an alternative to these images, compiling a database of culturally organized images called the Culturally Authentic Pictorial Lexicon (CAPL).

What strikes me as both a student and a professor of language and culture is that the visual world differs so greatly across cultures and even minor differences are telling in how we organize and perceive our world. Color is one of the easiest ways to find differences in cultures. I have previously discussed the linguistic and cognitive differences of color, but now I want to show some simple examples of color in culture through analysis of various postal systems.

In China, the postal system uses a deep hunter green:

(source)

In Japan, it is a bright red, much like England.

England:

(source)

Japan:

(source)

In Germany, it is a bright yellow (think DHL):

(source)

In Russia, it is a lighter but similar shade of the deep postal blue in the U.S.

Russia:

(source)

The U.S.:

(source)

This example of postal systems is an easy way to illustrate how color becomes one of the central ways to communicate and, although the same message is shared across cultures, the path to that message varies through color.

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Michael Shaughnessy is an Associate Professor of German and Chair of Modern Languages at Washington & Jefferson College.  In addition to German language, literature, and culture, he has a professional interest in educational technology, especially the authenticity of multimedia imagery.  His book German Pittsburgh (Arcadia Publishing) highlights the contributions of German speaking immigrants to our area.

If you would like to write a post for Sociological Images, please see our Guidelines for Guest Bloggers.