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Illustrations of unequal exchange

Posted on:2/2/2006
There are five illustrations.


1) "Today slippers produced in China at a cost of $2 and delivered to San Diego at $3, retail at $10, and dominate the American market. What is significant is that 70% of the low ultimate price goes not to the Chinese producers (workers and capitalists) but to the American distributors. And that price spread by its very magnitude engenders further, often still greater spreads, right into the speculative financial level." 

 

2) An exporter from Guilin, China advertised: “Now, We have a huge stocks of approximate 530000 pairs of shoes, include tennis shoes, sport shoes, children shoes, flying shoes, etc. We want to clear these stocks, the minimum FOB price will be only US$ 0.70 a pair, and you may discuss these prices with us if your purchase quantity is big.” These shoes may sell for US$35 in the United States. In this example, the wage of the worker making the shoes is less than 2 % of the final consumer price. (Source: Liu, Henry C.K. (2001), Communication to internet forum pkt@csf.colorado.edu, 12 December 2001).

 

3) In the coffee trade Central America to Europe, the wage of the coffee plantation worker was found to be 5% of the final consumer price: Wage of worker in coffee plantation 5.1%; Payment to owner of coffee plantation 8.5%; Exporter – Middleman 3.7%; export tax 17.2%; overseas freight 1.4%; duty 1.8%; Coffee tax 18.4%; Value-added tax 6.1 %; Importer 7.6%; cost of roasting 6.5%; Retailer 23.7%; Retail price in Europe 100% (Source: Launer, E. (1992) Datenhandbuch Sud – Nord. Goettingen: Lamuv, p. 143).

 

4) In the banana trade of Central America to Germany, the cost structure for 6 bananas retailing at 1.26DM was found in 1990 to be as follows: Plantation worker 0.01%; Plantation owner 22.2%; United Fruit Co 37.6%; reight company 25.6%; German railway 3.3%; retailer 11.2% (Source: Launer, E. (1992) Datenhandbuch Sud – Nord. Goettingen: Lamuv, p 147).

 

5) when a dozen shirts were exported from a Bangladesh garment factory to the USA, the cost structure in US dollars was found in 1992 to be as follows: Materials and accessories (imported) $27; Depreciation on equipment $3; Wages $5; Net industrial profit $3; Factory price (one dozen shirts) $38; Gross mark-up $228; Retail price (per dozen) in the West, before tax $266; Retail price including sales tax (10 percent)$292.60 (Source: Chossudovsky 2003, p. 83)


  
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