Mariotti (right) with BESA winners
Steve Mariotti, Kaizen interviewee and founder of the Network for Teaching Entrepreneurship (NFTE), wrote about his experiences with young entrepreneurs at the Bright China Entrepreneurial Spirit Award (BESA) ceremony. “…These young people would most likely end up as low-income workers in factories. Through the NFTE/Bright China program, they were inspired to start their own businesses,” Mariotti said.
A Kauffman Foundation report, “The Grass is Indeed Greener in India and China for Returnee Entrepreneurs,” concludes that Indian and Chinese students in America are more likely to return home to pursue their career goals as those economies improve. “Most returnees now say the entrepreneurial advantages are better in their home countries, where they can benefit from lower operating costs, heightened professional recognition, greater access to local markets and a better quality of life than they could attain in the United States,” the report states. While this “reverse brain drain” will impact entrepreneurship in America, as many entrepreneurs are Chinese and Indian immigrants, most returnees still maintain their American contacts, which could create more international business opportunities.
Over at The American, an article points out a recent study by University of Chicago economists Christian Broda and John Romalis, which found that income inequality has risen very little over the past few decades and that the benefits of trade have been underestimated.
The Broda-Romalis paper, “Inequality and Prices: Does China Benefit the Poor in America?,”[PDF] shows that from 1994 to 2005, much of the increase in U.S. income inequality was actually offset by a decline in the price index of the goods that poorer households consume. Inflation for the richest 10 percent of U.S. households, which tend to spend more on services, was 6 percent higher than inflation for the poorest 10 percent, which tend to spend more on nondurable goods, the type of goods often imported from China and sold at Wal-Mart.
Broda and Romalis found that in the sectors where Chinese imports have increased the most (especially nondurable goods such as canned food and clothing), prices have fallen dramatically. They estimate that about one-third of the price decline for the poor is directly associated with rising imports from China. “In the sectors where there is no Chinese presence,” Broda says, “inflation has been more than 20 percent.”
