Quote:
Originally Posted by WT Sharpe
In a global economy, there's no competing with slave wages. There's the problem manufacturing workers face. I have no idea as to a solution.
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The problem is, it's
not slave wages. Everything is relative. Wages that would be far below poverty level here are good money elsewhere. Wages are lower in less developed nations because living
costs are a lot lower. That Mexican worker earning $26 a day is making a solid middle class living for his area.
The same holds for the Chinese worker making $32 a week. China is in transition. It's still a largely rural agrarian economy, but there's an enormous influx to urban areas as breakneck industrialization creates factory jobs. Even at wages
we consider slave labor, the workers in the Chinese factories are making a lot more than they could make as peasants back in the village.
Compared to their peers, those Mexican and Chinese workers are
well off, and they know it. It's why they went after those jobs in the first place.
Ultimately, value is relative. Something is worth what someone else is willing to pay for it. There is always pressure to do things cheaper, and labor costs will be a major area where people will look for savings.
The bigger issue now is that the effects are spreading far beyond manufacturing. Instant communications and global operations make distributed efforts feasible. Work that involves creation and manipulation of knowledge rather than physical goods can be done anywhere, so we've been seeing things like programming being outsourced to India, because the Indian developers are highly skilled, can be writing code while we're asleep, and will charge about half of what a US developer would expect to do the same job.
We're seeing services go offshore, too. I saw an article a while back about a major insurer who was covering medical procedures done in places like India, because it was cheaper, all told, to fly the patient to India, have the procedure done in an Indian hospital by Indian surgeons, let the patient recover enough to travel in an Indian rehab facility, then fly them back to the US, than it was to have it done in a US facility by US surgeons and support staff.
I don't have answers either. I don't believe anyone does. We're all running the Red Queen's race from Alice in Wonderland, where you must run as fast as you can simply to stay in the same place, and to get anywhere you must run faster.
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Dennis