Santa Light
12 November 2008 1:21 pm by Taylor Marsh
BY TAYLOR MARSH
Dow down 400 today, close to 5%. Foreshadowing of the season to come.
U.S. holiday retail sales will fall 1 percent this year, according to America’s
Research Group, marking the first time the research firm has forecast a decline
in almost a quarter century of surveys. “This year looks so bad that
even normally good signs for retail sales, such as more Americans staying
home this Christmas, can’t save the season for retailers,” said C. Britt
Beemer, CEO and founder of the research group, in a news release. – Reuters
When the U.S. consumer goes on a diet, China
goes hungry.
The biggest problem facing China is the loss of jobs for migrant workers
from the countryside. Due to poverty and government’s lack of investment
in the agricultural sector, 300 million peasants have moved to the urban centers
to find work during the past three decades — 20 million pouring in each year.
The current slowdown has hit the workers hard. Last month 6,500 employees
gathered at the gates of a supplier to Mattel demanding back-wages; another
1,000 demonstrators at a factory in Guangdong where they were confronted by
hundreds of riot police when they attempted to move on the local government
offices. Adding to the highly combustible unemployed mix are college graduates.
Of approximately 5 million college graduates last year, an estimated 12.1%
have found jobs.Not surprisingly, China’s Premier Wen Jiabao has announced that sustaining
economic growth to provide jobs is his government’s “first priority.”
China is using its substantial currency reserve to help stabilize American
financial institutions in the hope that, once American economy is revived,
consumption of Chinese imports will resume.But this pattern of “China produces and the rest of the world consumes”
is not sustainable — particularly if Chinese leaders allow labor abuse and
refuse basic services to China’s working people just to keep the prices
of exports down. [...]
