… is lower and lower average real wages out to the horizon of the foreseeable future. Some say it’s inevitable, it’s the result of globalization, but others say, we Americans are being ripped off … royally!
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During globalization, American labor competes with the world wide labor force.
Economics 101
The Captain
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NL,
Wages in the US have been rising fast.
We are not low cost producers making textiles etc…
We make high end goods and services. Our manufacturing sector is also expanding quickly finally as we leave behind supply side econ corruption.
During globalization, American labor competes with the world wide labor force.
Tru dat!
AND since the “world wide labor force” will work for less than the “American labor force” the world will always be able to undersell US when it comes to labor.
Our only way around that would be robotization which might undercut the “world wide labor force” BUT wouldn’t do the “American labor force” much good.
The only way I see around that conundrum would be for the “American labor force” to invest in US stocks that have been paying an increasing dividend for about 25 years or so.
https://money.usnews.com/investing/stock-market-news/article…
(scroll down to see the list)
But that’s just the way I (more or less;-) try to do it. Others may have other ideas (Gold, Sliver, Diamonds?)
Desert (CVX, XOM, T, BNS, BKH, ED, ATGFF, NI, NWN, TRP, ENB, WRE, WGL, XEL, DUK, SO & KO) Dave
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… is lower and lower average real wages out to the horizon of the foreseeable future. Some say it’s inevitable, it’s the result of globalization, but others say, we Americans are being ripped off … royally!
This is wrong on so many levels.
When I first read the responses before the original post I thought there might be something. Then I read this post.
Wrong. Wages are a function of what can be produced for those wages and the ability of the wage earner to negotiate a significant portion of the wealth created by that labor.
There are only twi places on the planet with people that could potentially be labor pool. India and Sub Saharan Africa. That is it. India has surmountable infrastructure problems and I expect it will have the very best economic growth over the next 25 years. Considering the working population is expected to grow by 120,000,000 over the next five years we can see a lot of labor being absorbed in India.
However, this number, while huge in absolute terms, is less than 10 percent if the population if India and represents a labor pool growth of only 2 to 5 percent per year in face of an economy that can put up growth numbers between 7 and 12 percent per year.
In other words, there may be a huge pool of labor in India, but only a small amount will be available to the developed nations.
Sub Saharan Africa has a much larger pool of available labor. (Northern Africa has already been stripped of labor) Unfortunately this labor is not productive labor as there is little effective governance in Sub- Saharan Africa and little infrastructure. This if course is changing, but when the labor becomes productive, it appears that a great deal of it will only be available to China.
So, the idea that globalization will be able to hold down wages over the next 10 years is an outdated meme. As such, my working assumption is that we will see real rising wages through out the labor market and drastic inflation in any industry that cannot reduce labor hours in its product. Think fine dining, elder care and child care. All three of these will tend to pull people out of the labor force and make labor shortages worse, thus driving wages even higher faster.
Cheers
Qazulight
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