If you can’t beat ‘em, regulate ‘em -- that’s the Indian Supreme Court’s take on the country’s illegal sex trade.  

The court’s advice came in response to an NGO’s public litigation regarding child trafficking in the country.  As of 2007, UNICEF estimates 2.4 million Indians were HIV-positive (with the high estimate ranging up to 3.2 million). The sex trade is at the center of the epidemic: reportedly, a young prostitute can charge a customer just over $2, while an older woman will only receive about 65 cents – and that figure usually drops if the prostitute demands the use of a condom.  And the youngest girls in the trade, forced into prostitution before 15, are at the greatest risk of contracting the virus – they work longer hours, serve more clients, and are more likely to work in multiple brothels.

A UNAIDS report issued a couple of weeks ago reports that efforts to control the spread of HIV has been effective, with HIV prevalence among female sex workers declining by more than half, from 10.3 percent to 4.9 percent, between 2003 and 2006. Still, as the court points out, there are an estimated 2 million female sex workers, and legalization would allow monitoring of the trade and further provision of medical aid.

As the judges asked, "When you say it is the world's oldest profession and you are not able to curb it by laws, why don't you legalise it?"

Photo: PRAKASH SINGH/AFP/Getty Images

The Private Sector Development blog at the World Bank has a cool post on the effect of labor laws on computer use. Social scientists have theorized that the stricter the regulations on hiring and firing workers, the more companies turn to computers and technology.

Turns out that conventional wisdom is correct, a World Bank study shows:

Amin (2009) tests this hypothesis on 1,948 retail stores in India using data from Enterprise Surveys, a regular World Bank survey on firm performance, firm characteristics and the business climate....The study finds that the percentage of retail stores that use computers rises by 6.2 percentage points as we move from the state with the least to the median level of rigid labor laws. This is a large effect given than only 19% of the stores in the sample use computers.

The PSD blog cautions against reading too much into the results, though: 

That is, to properly understand the computers/productivity relationship one needs to distinguish between the motive of saving labor because of labor regulations and the motive of enhancing efficiency through computer usage. To what extent these effects hold remains to be empirically ascertained - an important task given that the use of computers and other modern devices is fast spreading across the globe.

But there's a nice synergy there. And I wonder whether the same scientists have studied the corollary between India as an outsourcing hub and an IT giant. 

There are more slaves on the planet today than at any time in human history. But a landmark case in West Africa this week should give thousands of them a rare dose of hope. A court in Niger found the country's government guilty of failing to protect the rights of Hadijatou Mani, a 24-year-old woman sold into slavery at the age of 12.

Mani says she was sold as a young girl to a man for $500 and forced into domestic and agricultural work for a decade. Her master raped her repeatedly, and she bore him three children. She was freed in 2005 and, with the help of Anti-Slavery International, brought the case against the government for failing to protect her. In the judge's decision, he ordered the government to pay Mani about $20,000.

Niger officially abolished slavery in 1960, but the practice persists throughout the country, with an estimated 43,000 people enslaved. There are believed to be tens of thousands more in bondage across West Africa. Niger's government repeatedly contends that it does all it can to eradicate the practice, but this is the first time a court has held it responsible for looking the other way. There's little chance of thousands more slaves being so lucky as to be freed and rewarded, but if this compels the government to enact (or enforce) more stringent laws, all the better.

Photo: Boureima HAMA/AFP/Getty Images

Straight from FP contributor Robert Reich's blog:

Labor Day should remind us how many shitty jobs still exist.

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It's no secret that Japan has traditionally been averse to immigration. Many long-term immigrants wait eternally for Japanese citizenship. The Japanese parliament also recently approved a plan to fingerprint and photograph all adult foreigners entering Japan.

But is the tide against foreigners turning in Japan? Possibly. According to a recent Mainichi newspaper telephone survey, 63 percent of respondents favored allowing the immigration of unskilled foreign laborers, even though the Japanese government generally opposes such measures—opting instead for a "cautious" approach toward unskilled workers. Out of the 63 percent, 58 percent supported accepting unskilled foreign workers in fields facing worker shortages, and 5 percent believed that entry-level foreign workers should be accepted without conditions.

Hidenori Sakanaka, head of the Japan Immigration Policy Institute, believes the shift in favor of foreigners may be due to Japan's enormous demographic challenge associated with its rapidly aging society. He also suggests the Japanese may gradually be appreciating the work already done in Japan by entry-level foreign workers in fields from nursing to agriculture, forestry and fisheries. Necessity may be the mother of invention—or in this case, acceptance—but it remains to be seen whether this is really a cultural shift toward embracing immigration. If legislation follows, I may be convinced.

DAVID MCNEW/Getty Images News

I see that Democratic presidential candidate John Edwards is now taking potshots at the U.S.-Peru trade agreement that is now going through Congress and due to hit the Senate in November. Speaking on Saturday in Newton, Iowa, Edwards summed up his reasons for opposing the deal:

In short, this agreement does not meet my standard of putting American workers and communities first, ahead of the interests of the big multinational corporations, which for too long have rigged our trade policies for themselves."

This is his big strategy for victory in Iowa? As FP documented in June, bilateral trade between Peru and the United States is small potatoes: barely $2.5 billion in 2005. And most of that trade, $2 billion, was exports from the United States to Peru.

In fact, the dirty secret about the new agreement is that it would benefit U.S. exporters the most, as this summary of the deal (pdf) from the U.S. Trade Representative's office makes clear:

Eighty percent of U.S. exports of consumer and industrial products to Peru will become duty-free immediately, with remaining tariffs phased out over 10 years. Key U.S. exports will gain immediate duty-free access to Peru. Peru has agreed to allow trade in remanufactured goods, and will join the WTO Information Technology Agreement. 

Peru already enjoys good access to the U.S. market thanks to previous trade agreements, so it's not as if the United States is suddenly going to be flooded with cheap chicha, alpaca wool, and mahogany. Edwards may think that spreading this silliness is going to help him win the Democratic nomination, or at least earn him points in protectionist Iowa. My guess is that Edwards knows better. That's probably why he chose Peru rather than, say, the South Korea deal, which is on a different scale altogether.

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Forget "Deadliest Catch," the Discovery Channel show about the peril of being an Alaskan king crab fisherman. The most dangerous job in the world has to be mining coal in China. Last year alone, 4,746 miners were killed in China, according to state figures.

Stop and think about that for a second. That's about 1,100 more deaths than the U.S. military has incurred in five years of fighting in Iraq.

Which is why China is ecstatic over yesterday's rescue of 69 miners from a flooded coal shaft in Henan Province. The shaft, part of a 50 year-old state-owned mine, collapsed Tuesday afternoon when a torrent of more than 1 million gallons of water rushed into the mine after a rainstorm. The government said 102 miners were working at the time of the flood. Thirty-three escaped. The remaining trapped miners were kept alive thanks to hundreds of rescuers, who poured 145 gallons of milk down a 2,600-foot ventilation shaft over the course of three days while crews pumped out the mine and cleared tons of mud. 

It was a death-defying escape from the jaws of "development at any cost"—and a fate denied to far too many.

UPDATE: A reader writes in, "What on earth are you doing comparing gross number of deaths of Chinese miners to the number of Americans killed in Iraq? At least give us the denominator on the Chinese miners, otherwise the comparison is meaningless."

Just so there's no misunderstanding: I wasn't dissing American servicemen and women. Nor was I comparing apples to apples or trying to make a point that a coal shaft in Shanxian is more dangerous than a pillbox in Baghdad. Neither sounds like much fun to me.

So let's set the record straight. There are about 7 million miners in China. Our in house statistician tells me that, based on back-of-the-napkin calculations, you're about 8 times more likely to die as a U.S. soldier in Iraq than as a coal miner in China. I still don't want to sign up.

I'm a regular reader of the Wall Street Journal and the Financial Times. They're great newspapers, but I've noticed that both are in the habit of reporting "labor shortages" exclusively from the perspective of employers. That's understandable, given that the WSJ and the FT are aimed at the wealthy business crowd.

But a "labor shortage," as in the case of the Bollywood actors, is often just a case of businesses complaining that they have to pay better wages to attract talent. So when you read these horror stories about a shortage of IT workers or what have you, remember that salaries are responsive to market forces as well. When people aren't willing to supply labor at a given wage, you get a shortage, just as when the price of oil is too low, oil companies aren't willing to invest in new refineries.

I have nothing against the wealthy; I'd love to join them someday. But given how middle class income growth has stagnated in the United States in recent years as wealthy investors have prospered, I don't think we should cry in sympathy when companies complain about labor shortages. Rising wages are what economic growth is ultimately supposed to be about.

India faces a skills crunch in its IT and engineering sectors, Passport noted earlier this year, and it's hurting India's global competitiveness. But now India must confront an even more ominous shortage: a lack of quality Bollywood actors.

Leon Neal/AFP/Getty Images

Anyone who has seen some of the dreck Bollywood churns out will probably laugh and say, "Tell me something I don't know." But there's a new phenomenon going on here. As money pours into the film industry, Bollywood is suffering from a "talent crunch," the Financial Times reports, and it's particularly hard to find good male actors. Because production companies are finding it easier to secure financing from abroad, it's getting tougher for them to tap quality local talent for a reasonable price. As a result, Bollywood's A-list celebrities are cashing in, demanding double or triple the fees they would have earned just a few years ago. It doesn't help that Hollywood—with its extravagant fees by Indian standards—is starting to take an interest in Bollywood stars, beginning with former Miss World Aishwarya Rai.

So why is it so difficult for Bollywood to find new talent? Audiences are heavily biased towards existing stars, so it's risky for filmmakers to opt for an unknown face. As Sameer Nair, the head of a new entertainment channel being developed by India's leading broadcaster, puts it,

If your definition of a blockbuster requires these superstars to be present and that's in your business plan then you have a general scarcity problem."

Perhaps, then, Bollywood should look outside India for emerging talent. Consider Kashif (Pakistani by background), who made it into the top 20 of America's Got Talent by dancing his, um, distinctive Bollywood moves... .

LOUISA GOULIAMAKI/AFP/Getty Images

Every summer, we're treated to the same news story: It seems Europeans get weeks and weeks of vacation and Americans don't get any at all. Shocker of the century, right? My guess is the thinking goes: Slow news day, so let's send that "Americans are overworked" story over the wires.

But does all that time off make Europeans any less productive? The answer is a surprising no. Several European countries—Norway, Ireland, and even France—post higher productivity levels than does the United States. Check out FP's recent article, The Influential Tourist, for more on that.

And in our latest issue, Clive Crook explains in Think Again: Europe that even when America does beat European countries in the productivity rankings, "[t]he United States’ much higher output per person is due mostly to more hours on the job, not to superior productivity while working." Is it worth it?

Here's why I think former British PM Tony Blair is making a big mistake in taking the job of Middle East envoy—a job that is apparently limited in scope to "shoring up Palestinian institutions" and not actually negotiating any deals.

Alvaro de Soto, who was the United Nations' representative to the Middle East until he stepped down in May of this year, penned a damning report on the Quartet's failure in the peace process between the Israelis and Palestinians. It leaked to the Guardian, which promptly published the entire report on its website. De Soto is a professional diplomat who did a lot of good in advancing the Cyprus peace process, so we should take him seriously.

The report is filled with juicy details on why Blair's predecessor, James Wolfensohn, couldn't get anywhere. It does credit Wolfensohn with getting across "the notion first put forward by the World Bank that the Israeli closure system was the determining factor in the decline of the Palestinian economy." But as de Soto notes, "Israel has completely shut off Palestinian workers from going to Israel at all - Palestinians who used to work in numbers over 100,000 in Israel have been reduced to zero."

And so it's clear that Blair will have to address this key factor in the Palestinians' economic catastrophe if he is going to get anywhere ... which will entail negotiating with the Israelis. Unless Condi Rice can deliver on this, Blair's efforts will be useless—and that's why he'll eventually quit in frustration. I'd love to be proven wrong.

PHILIPPE LOPEZ/AFP

As it gears up for the 2008 Olympics, China is quickly falling into last place in one category that won't be on the schedule in Beijing: labor rights.

Just in time for World Day Against Child Labor, PlayFair 2008, a campaign sponsored by trade unions and labor rights organizations, issued a scathing report (pdf) Monday on China's rampant child labor violations and sweatshop conditions.

Through a series of interviews and undercover investigations of four factories licensed to make official Olympic merchandise, PlayFair discovered working children as young as twelve, adult workers earning half the Chinese minimum wage, and workers being instructed to lie about wages and conditions to outside inspectors.

The report's release coincides nicely with International Olympics Committee meetings in London regarding the 2012 games. As Maggie Burns, chair of one of the labor groups backing PlayFair, told the Financial Times:

The London Olympics has just spent £400,000 [€590,000/$788,000] on a logo. There is no reason why organisers cannot ensure a “sweat-free” games if they act now.

One can only hope that these efforts to fight worker exploitation will be a bit more successful than the design of the 2012 logo.

DAVID HECKER/AFP

Angela Merkel showed some serious diplomatic acumen at this week's G8 summit, riding herd on world leaders and wringing concessions from the United States on climate change—thus avoiding an embarrassing setback for Germany's first female chancellor. 

But Merkel and here European colleagues will need more than just political skills if they are to address Europe's latest crisis ... of skills. The continent has a massive shortage of skilled workers across a range of sectors. The Financial Times reports that Merkel's Germany is considering opening up its labor market to foreigners, primarily due to an "exodus" of qualified workers that includes academics, medical professionals, engineers and corporate staff. Coupled with demographic pressures, including a seriously below-replacement population rate, Germany—which has traditionally favored protecting its labor market—has little choice but to consider welcoming immigrants into its workforce.

At the same time, eastern European countries are also beginning to face a chronic labor shortage. Wages in some sectors have risen by as much as 50 percent in the past year, and emigration from eastern Europe to western Europe has exacerbated the shortage. Even though Poland, for instance, has a high unemployment rate of 13 percent, companies are still unable to find sufficiently skilled workers to recruit, and many people who remain in eastern Europe are unwilling to move even within their country's borders to fill open positions. Indeed, companies are now forced to look to places like China for workers. That may not be good enough, and the region's growth may suffer as investors look elsewhere to avoid these labor crunches.

Bill Pugliano/Getty Images

For the first time, a major U.S. automaker is in the hands of a private equity group. Cerberus Capital Management, a private equity firm based in New York that specializes in restructuring failing companies, has bought an 80.1 percent stake in the Chrysler arm of Daimler-Chrysler for $7.41 billion. Chrysler has been losing money for the past few years, and is mired in billions of dollars worth of retirement liabilities.

For Daimler shareholders, it's good news—Daimler's shares rose 3.7 percent in Frankfurt after the news yesterday. Daimler is effectively paying Cerberus to take Chrysler's pension and health care costs off its hands, and shareholders are understandably relieved.

For Chrysler workers, the result is ambiguous. After initially opposing the deal—no surprise, since Cerberus expects to "profit on [its] investment by reducing wages and paring other costs such as pension expenses"—United Auto Workers (UAW) union President Ron Gettelfinger came out in support of it. Analysts believe Cerberus and the UAW must have cut some sort of deal, and Chrysler's chief executive did say that no new job cuts were planned beyond the 13,000 announced in February. It's hard to fault Gettelfinger; American Airlines workers faced essentially the same choice four years ago and ultimately decided to take pay cuts rather than lose their jobs entirely. 

As for Cerberus, it's taking a huge risk here. Its purchase of a major American icon could provoke a backlash in Congress against private equity firms, which are already gaining a bad reputation in the United States for lack of transparency and what some see as vulture-like behavior. But for all the criticism, Cerberus may end up providing exactly what Chrysler needs as well as a template for the other big U.S. auto makers to follow. Of course, if Cerberus fails to lift Chrysler from its current quagmire, U.S. taxpayers could end up furious at footing the bill for a massive bailout. If that happens, people shouldn't forget that Chrysler was heading in that direction anyway—long before Cerberus.