Wal-Mart's Global Poverty Reduction Program

When the Boston Associates built the textile mills in Lowell, Massachusetts, they hired single young Yankee women right off the farm. When the farmer’s daughters went on to bigger and better things, the mills hired the Irish. When the Irish were too prosperous to work in textile mills the mills opened up in the rural Carolinas.

Now the textile mills are florishing in China. Many people don’t like the sweatshop wages and working conditions, Michael Strong writes. For sure, he says:

"China is the most populous country, with 1.3 billion people, most still poor enough to willingly move hundreds of miles from home for jobs that would be shunned by anyone with better prospects."

But the jobs at the sweatshops in the city pay more than twice as much as jobs in the country. Who wouldn’t travel hundreds of miles from home for that?

But for some reason, lots of people think that such disparities are a disaster.

D. Gale Johnson, an economist who studied regional inequality within China, described the enormous disparity between urban and rural workers as "the great injustice." Urban workers earn about 2.5 times as much as rural workers. Even after counting the higher cost of living in urban areas, urban workers make about twice as much. Not surprisingly, massive numbers of people are moving to the city to work in factories.

I guess that one man’s injustice is another man’s market signal.

And of course it is the demand for Chinese manufactures from the shoppers at Wal-Mart that generates the higher wages in the city.

So should we thank Wal-Mart for their global development policies and for raising millions out of poverty?

The fact is that people move off the farm into the city because they expect to make more money in the city.

And also, and this is a big deal for peasants used to working outside in rice paddies in all weather: they also expect to work inside. They really like that.