2. Key Concepts Arbitrage – Buying a commodity in a local market where it is cheap, then selling it in a neighboring market where price is higher. p. 57 Wage Arbitrage – Where production and jobs move from a high wage labor market to another where the labor is much cheaper. p.57 Unions – A group of workers united for the same goal. p.58

3. Wage Arbitrage Graduate Engineers – India vs. U.S. p. 64 India’s Engineers < $10,000/year U.S.’s Engineers = $60,000 - $80,000/year Steel Industry – Brazil vs. U.S. p. 75 Brazil – 5.8 hrs/ton (1/10 wage rate of the U.S.) U.S. – 3.4 hrs/ton (10 times the wage rate of Brazil)

4. Wage Arbitrage Clothing Industry – Bangladesh vs. U.S. p.75 Bangledesh – 25 min./shirt x $0.25/hr. = 2.4 shirts/hr U.S. – 14min./shirt x $7.53/hr. = 4.3 shirts/hr. Production Workers – Germany vs. Japan p. 66 Germany – Paid $25.56/hr (after cutbacks accepted) Japan – Paid $19.20/hr. (still sending jobs overseas)

5. Advantage/Disadvantage Of Wage Arbitrage Advantage: Reduction of labor costs p.59 - “… the opportunity to capture savings at home and abroad by taking advantage of the gross surpluses of human labor that exist around the world.” Disadvantage: “Social dumping” p.59 - The exiting of companies from their home countries to other countries.

6. Wage Arbitrage Effects on Unions Manufacturing Workers – East vs. West Germany p. 61 Helmut Kohl – “Gleiche Arbeit, gleicher Lohn” - Same work, same pay. (E. Germans make about $6.70 < W. Germans) Electrical Workers – Malaysia vs. China/Vietnam p.64 Malaysia – government prohibits unions to prevent corporations from moving to lower wage countries like China and Vietnam

7. Unions Purpose - Limit the supply of workers Issue -Unions have been decimated by the mobility of capital IMF -International Metalworkers Federation -Federation of more than 90 metalworkers unions

8. Union Issues Engineering and Electrical union- Timex -Accusation on Timex for dumping 343 employees at their plant in Scotland Metalworkers- Shipbuilders -Major shipbuilding countries losing market share to wage arbitration

9. Union Issues Machinist Union-Aerospace Industry -U.S. aerospace industry to cooperate with Airbus Swiss engineering unions-Asea Brown Boveri -ABB plans to lay off 1,000 workers to invest $1 billion in Asia IG Metall- Eastern Germany -3.4 million member union begged for support to East and West Germany

10. Union Issues Hungary- Auto Industry -Complain that U.S. and European companies are trying to turn Hungary into union-free zone Electronics – Malaysia -Possible establishment of unions in Malaysia’s electronics industry

11. Summary Basic outline of chapter 4 given The definition and concept of Arbitrage was introduced. Examples from Greider’s text was given for illustration purposes. The Union and the effects that Arbitrage has on it.

12. Notes 1.Financial TimesFinancial Times 2.The Wall Street JournalThe Wall Street Journal 3.Office of Technology Assessment, U.S. CongressOffice of Technology Assessment, U.S. Congress 4.The Trap (La Piège)The Trap (La Piège) 5.The Oxford University PressThe Oxford University Press 6.The American ProspectThe American Prospect 7.U.S. Labor DepartmentU.S. Labor Department 8.World BankWorld Bank 9.Der SpiegelDer Spiegel