14 January 2007

Expensive workers are good for you

Sanders Research Associates - The Rise and Decline of the Great American Corporation: "Expensive workers are good for you
The problem of cheaper labor abroad has been treated as if it was a problem with no solution. There is simply nothing that can be done, one reads, which means that the American working and middle classes are doomed. If the cost of labor were indeed the main consideration in production, this would be true. But it most emphatically is not true.
The central factor in the creation of economic wealth and growth is not the cheapness of labor, but the productive power of machinery. If cheap labor were the road to international competitiveness, then the oversupply of near-starving peasants in China and India would have kept them at the top of the world food chain for the last 1000 years."

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