How Much Is Too Much For A T-Shirt

November 15, 2013
Iain MacLeod

I have been feeling a bit philosophical this past week.

When I was ten years old I remember engaging in a spirited debate with my mother on the merits of communism. At ten years old I could not fathom how any person or society that deemed itself civilised could or would not treat everyone equally and ensure everyone enjoyed the benefits of that society.

The year was 1974. To my mother’s credit she didn’t poo-poo my naivety – I suspect she thought it was rather quaint (but deluded as the Cold War raged globally) but had the grace not to put me down. A Commie in the house she probably whispered very quietly to her friends…….

My politics have evolved but remain pretty simple – reward effort and innovation but equally look out for, and look after, the vulnerable. I am I guess shaped by the environment and norms of the society in which I have grown.

I am often questioned by Singaporeans on New Zealand’s ‘high taxes’ (they, like most of us have a built in aversion to them). A New Zealander earning $55,000 pays 17% of their income in tax. If you have held your residence for two years or are a citizen and comprise a family of four and you earn that much as a household then the effective tax rate falls to zero. For your ‘high’ tax we get (among other things such as safe streets):

1. Twenty hours of free day care a week for those aged 1-3

2. Half a day five days a week of Kindergarten between aged 4 and 5 for a weekly donation of about $10

3. A world class education system starting at age 5 that is almost completely funded out of those taxes

4. A 75% subsidy for University/tertiary education that is the cause of many to move here

5. A health system operating from birth to death which is almost completely funded out of those taxes

6. A social security/pension scheme for all that is not means tested out of those taxes when we turn 65.

New Zealanders are unashamedly interventionist and are into a bit of wealth redistribution for the dignity of all but like most socialist democracies we do struggle with the inevitable tension between balancing a ‘hand up’ with a ‘hand out’. It is a tension that bubbles away but I realise when I am in places like Singapore, South Africa and the United States that it largely works. Out of it comes a more equitable and harmonious society.

I had reason to re-visit my own ‘inner economic tension’ and that Kiwi sense of a fair go last Thursday in Singapore. It involved two Bangladeshis and Louis Vuitton footwear.

I had in the morning read an article in the New York Times about the proposal to increase the monthly salary of garment factory workers in Bangladesh from US$38 to US$67 given the focus on that country’s textile workers since over 3000 lost their lives recently in a building collapse.

I couldn’t believe an entire article was devoted to why this 80% increase in someone’s monthly salary might be seen by some as a bad thing. Apparently a near doubling of the monthly pay from effective slave to indentured servant would add precisely US$0.25 to the cost of my next tee shirt. This warrants debate I asked myself? Give them US$100 a month and add US$0.50 to my next $10 tee shirt – it is still dirt cheap and might lift some Bangladeshi family out of the slums of Dhaka!

I have historically been a relatively frequent shopper in stores like ZARA, Uni Qlo and H&M stores while in Singapore and Malaysia which are of course full of clothes made in Bangladesh but lately I have started to question whether I should. (There are few places like a cheap clothes store to test your beliefs in giving workers in a developing country a fair go!).

Thoroughly depressed at those of us who might quibble over saving 25 cents on a tee shirt in exchange for some sort of dignified existence for some faceless person in some far off third world country I had an appointment that same morning with two wonderfully positive young Bangladeshi men who wanted to build new lives for themselves and their families in New Zealand. While they had good trade skills their English was such that they would likely struggle to find work here. As part of my assessment of not only their ‘points’ but also their ability to find work and settle well I asked each a number of questions to establish how good their English was. They had excellent CVs but in this game everyone has a CV that could have been written by an English Professor……

Some of those questions centred around where they worked in Singapore, what they did, how much they were paid, how much they could live off and how much they could save and/or send home.

It was sobering to say the least. As I sat on the comfy couch in the main lobby of the $450 a night Shangri-La Hotel I learned both earned after tax S$1000 (about US$800) a month. Of this they spent $400 a month on food, cellphone and clothes (probably made in Bangladesh). They sent home the rest. For most of these workers their employers provide a bed in a barrack type building comprising sleeping dormitories.

And before any of you Tea Party types are tempted to remind these guys they have it better than most of their countrymen in Bangladesh I asked how many hours they worked each week. The answer was full time (40 plus) but that to make ends meet they also had to work Saturdays and Sundays. In an average month they work 250-260 hours and after tax that means a net $4 an hour. This in Singapore which has one of the highest per capita incomes in the world. It would simply not be allowed here in New Zealand.

One of these young men had paid (through borrowing) a labour broker in Bangladesh about $4500 for his job and as so often seems to happen once he arrived in Singapore he discovered the job he was promised was not real and he (as a qualified artisan with a four year Engineering Diploma) ended up repairing ships engines in a shipyard. It has taken him two years to pay off the broker. In May next year he is going back to Bangladesh given I really couldn’t help him get to New Zealand unless and until his English significantly improves. In Bangladesh he said he won’t earn much but he won’t be working 260 hours a month earning a pittance as ‘a slave’.

My day got more depressing when my wife (who travelled with me for the week) announced at lunchtime we needed to go down to the Marina Bay Sands ‘Shoppes’ to pick up a $900 pair of Louis Vuitton flip flops for someone close to us but who shall remain nameless.

I nearly choked at the obscenity. I had just finished speaking with a couple of lovely young men who are forced to live away from their families and scrape together in a month of filthy work and the hardest of labour the same as this person was about to spend on a pair of Louis Vuitton flip flops for the beach. Given the ripping off that takes place of all these brands in Asia who could ever tell if they are real or fake anyway – kind of defeats the purpose I’d have thought but that’s another story…..

The members of the Tea Party in the US and indeed a good many New Zealanders and Singaporeans would likely argue that the buyer of the LV flip-flops was only exercising his/her right to spend his/her money how they pleased. Which is true of course. But if you have the money to throw away on such things you could never justify (to me anyway) that you should not pay an extra 50 cents for a tee shirt at places like H&M or another $1 an hour to those Bangladeshi lads for whom a 20% pay increase would be a God send. And those Singaporeans who are so quick to label countries like mine ‘highly taxed’ when a lot of my tax dollars goes to help others less fortunate might realise higher taxes helps smooth out some of the wrinkles in wealth disparity – often brought on by nothing more than circumstance.

Communism is dead as it deserves to be. It didn’t work but there has to be something kinder than what happens in places like Singapore to the young men of countries like Bangladesh surely? The New Zealand economic model may not be perfect but you’ll not find foreigners working for $4 an hour here and if it was discovered it would be quickly dealt with.

And finally there I was in another Uni Qlo store marvelling at how cheap everything was (and yes I bought) when my eye was captured by a nice glossy leaflet on the counter by the Cashier exhorting us to recycle these clothes when we are finished with them so that those less fortunate than us might benefit – in Bangladesh.

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