China, one of the world’s biggest users of plastic in the world, has unveiled a major plan to reduce single-use plastics across the country. Non-degradable bags will be banned in major cities by the end of 2020 and in all cities and towns by 2022.
Makes you feel guilty? Sounds like good news for the environment? Maybe not. First, we need to take a hard look at the actual damage which plastic is causing to the environment and whether alternatives help mitigate the damage. Just like miracle supplements touted by some sexy influencer on social media, the harmful effects of plastic can also be hyped through social media and environmental influencers. Politicians jump on the trendy bandwagon and win votes. But what about the science?
Like junk food, plastic is sinful and triggers “moral panic” in responsible individuals. People are made to look even more sinful and diffident when politically correct folks go around showing off their environmental consciousness, similar to the way some people flaunt their Hermes bags? It’s hip, it’s trendy, but what about the science?
Consider the tough fabric, reusable grocery bag which every other auntie is using, proudly calling it 环保袋. Now here’s the science that some people don’t want you to know. A 2014 study in the United States found that while reusable LDPE and polypropylene bags may contribute less to landfills than the usual plastic bags found in supermarkets, the manufacturing process is actually more harmful to the environment. The initial “investment” (environmental cost of manufacturing process) only yields “returns” for the environment if some of these bags are reused literally thousands of times. And paper bags aren’t that great either.
A 2018 Danish study, looking at the number of times a bag should be reused before being used as a bin liner and then discarded, found that:
- polypropylene bags (rice sacks, reusable bags sold at supermarkets).) should be used 37 times
- paper bags should be used 43 times
- cotton bags should be used 7,100 times
To ease the conscience of environmentally conscious earthlings, restaurant suppliers have come up with disposable items made from organic sources like corn and sugarcane. The most common are polymers of polylactic acid. While they do break down, it will still take a very long time before they can be absorbed by plants and animals and in the process, they may actually create a bigger carbon footprint.
What does being biodegradable really mean? To test a material for its biodegradability, the researcher would place it in a composting vessel, heat it up to 50-60 deg C for 180 days. If at least 90% of it has decomposed, it’s considered biodegradable. Matter is neither created nor destroyed in the process of decomposition. What are the end products of decomposition? Well, carbon dioxide or methane. In other words, biodegradation is just a slower and cooler form of incineration. It seems absurd, but you said you want biodegradability. You didn’t say anything about carbon footprint.
Most plastics end up in landfills and stay there. Images of mountains of discarded plastic or oceans choked with them may trigger “moral panic” in the age of Tik Tok, but it’s what we don’t see coming out of biodegradable stuff that may hurt us more. If we wish to save the environment, we should consider the responsible use of non-biodegradable plastics and not the making of more biodegradable plastics. Companies like Pepsi and Coca Cola have recently announced that their (non-biodegradable) plastic bottles are made from 100% plant-based raw materials.
To limit global warming by 1.5 deg C from pre-industrial levels, we need to sequester (absorb) hundreds of gigatons of carbon dioxide from the environment over the next 30 years. If we stop producing biodegradable plastic, plant life would have a chance to sequester about 10 gigatons of carbon dioxide from the atmosphere. It’s not enough, but a good start. Perhaps it’s time we stop thinking that all trash that naturally disappear are good trash. Cow dung disappear over time but it releases methane – a greenhouse gas that contributes to global warming. Is biodegradable cow dung environment friendly? No.
OK, that’s a rather long introduction. I’m not actually trying to talk about climate change or plastic pollution. I just wish to point out that for laymen like us, things are sometimes not what they seem. Sometimes, even experts may fall into the trap of embracing the obvious. Take the issue of the hotly debated topic of minimum wages for instance. Nearly 50 years ago, George Stigler implored economists to be “outspoken, and singularly agreed” that increases in the minimum wage reduce employment. This logic has convinced most economists. A survey of American Economic Association members in 1992 found that 79% of respondents agreed that a minimum wage increases unemployment among the young and low-skilled workers.
All this shouldn’t be surprising. Intuitively, it’s quite easy to see the employers’ point of view. The less they can pay their workers, the better their profit margins would be. It’s simply an issue of demand and supply. The more expensive labour is, employers would try to make do with fewer workers, leaving those who are not selected out of a job. Hence, the rather cliched adage “low wage is better than no wage”. In an ideal market situation and without minimum wage, employers would only need to pay their workers their market worth. If a minimum wage were artificially set, employers may end up paying workers more than their market worth, effectively incurring unnecessary costs. In theory, that is – something which our pathetic academics are very good at.
But competition for jobs and the competition for workers do not follow simple mathematical rules. In the real world, workers are likely to be paid less than market worth or “marginal revenue product” in economic jargon. Companies offering unattractive jobs may end up paying more. Companies in a strong negotiating position will tend to squeeze workers. But then, what makes a job attractive? Isn’t high pay one of the considerations?
Minimum wages also affect different industries in different ways. In manufacturing for instance, what is there to stop the employer from replacing a worker with a robot? If minimum wage keeps rising, companies that automate will be way ahead of those who still hire human workers. Setting a minimum wage may have little effect on the cost of manufacturing but with more and more automation, the workforce in this sector is set to shrink with or without minimum wage.
In the service industry like nursing homes, hospitality and wellness, automation may not be so relevant. By raising the minimum wage, the cost of services will go up. The thing that frightens calculative Singaporeans most in this conversation is the question “do you want to pay more?” The peanuts for you, truffles for me mentality applies here. My pay, as high as possible. Service providers’ pay, as low as possible. But are we getting value for money when we squeeze our service providers?
In 1990, David Card and Alan Krueger, economists from Princeton University, performed a study on two fast food outlets, one at New Jersey and one at neighbouring Pennsylvania. Both outlets were paying their crew $4.25 an hour. Then, they asked the outlet at New Jersey to increase their workers’ pay to $5.05 per hour. The results? There was no decrease in employment in New Jersey. Worker morale was high, more were eager to join and more outlets could be opened.
Card and Krueger came up with a book, Myth and Measurement which argues against conventional textbook wisdom vis-a-vis minimum wage. Further studies on fast food outlets have shown that for a 10% increase in floor wages across the board, gross revenue for the outlets actually went up and they only had to increase their burger price by 0.9% for the same profit margin.
As recent as 2019, a study on supermarkets in Seattle also found that increases in worker’s wages did not result in the need to push up the prices of groceries because workers were more motivated to perform and sales went up. The results from all these studies go against the theory that if wages go up, the costs will be directly passed on to the consumers. The theorists and academics may be missing out on the human factor which may bend mathematical logic. Of course, setting minimum wage cannot be done randomly or indiscriminately. We must take a calculated approach. That’s where the discussion starts and should not end or be summarily dismissed by textbook wisdom.
Like the wisdom of plastic bottles, there are a lot of things in life which may be counterintuitive. There are good workers and there are lazy workers. There are also good workers who become unmotivated and start looking around for other opportunities when their wages are stagnant while transport and utilities costs keep going up. For these unmotivated workers, a raise could be all it takes to revitalise the business. Minimum wages may or may not be the way to solve the problem of highly visible and often ignored poverty and hardship in this First World country. At least discuss it and not simply dismiss it.
New Book!
