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China's Edge in Competitiveness only 4%

bballcrook21
Posts: 4,468
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5/22/2016 9:11:46 PM
Posted: 6 months ago
Not long ago I was criticized for saying that one of the great benefits of international trade is that global wages revert to the mean. Some people saw this as an endorsement of lower wages in the U.S.

Well, now there's evidence that such a process is indeed taking place, and it's to the benefit of the U.S. For many years, $15.00/hr manufacturing jobs in America have been replaced by $0.50/hr jobs in China. But over that time, the laws of supply and demand have been pushing Chinese wages higher. They are now approaching $5.00/hr, and the country is losing its cost advantage. We are already seeing signs that some of those jobs are coming back to the West, where wage growth has been much slower, and where we still retain better workforce quality and lower energy costs.

This is what I meant by wages reverting to the mean. China, or anyone for that matter, could not offer low wages forever, as market forces eventually lead to wage growth. Likewise, America could not continue to pay excessive wages before international competition slowed them down.

In the process, Chinese workers now make much more and have lower poverty, while American workers can look forward to a revitalized market for domestic manufacturing jobs as our cost index is now the second lowest in the top ten manufacturers. Global imbalances in labor are being addressed by the invisible hand of the market, the greatest force for reducing poverty the world has ever known.

SOURCE: https://www.bcgperspectives.com...
If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand. - Friedman

Underlying most arguments against the free market is a lack of belief in freedom itself. -Friedman

Nothing is so permanent as a temporary government program. - Friedman

Society will never be free until the last Democrat is strangled with the entrails of the last Communist.
Greyparrot
Posts: 14,337
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5/22/2016 9:57:59 PM
Posted: 6 months ago
At 5/22/2016 9:11:46 PM, bballcrook21 wrote:
Not long ago I was criticized for saying that one of the great benefits of international trade is that global wages revert to the mean. Some people saw this as an endorsement of lower wages in the U.S.

Well, now there's evidence that such a process is indeed taking place, and it's to the benefit of the U.S. For many years, $15.00/hr manufacturing jobs in America have been replaced by $0.50/hr jobs in China. But over that time, the laws of supply and demand have been pushing Chinese wages higher. They are now approaching $5.00/hr, and the country is losing its cost advantage. We are already seeing signs that some of those jobs are coming back to the West, where wage growth has been much slower, and where we still retain better workforce quality and lower energy costs.

This is what I meant by wages reverting to the mean. China, or anyone for that matter, could not offer low wages forever, as market forces eventually lead to wage growth. Likewise, America could not continue to pay excessive wages before international competition slowed them down.

In the process, Chinese workers now make much more and have lower poverty, while American workers can look forward to a revitalized market for domestic manufacturing jobs as our cost index is now the second lowest in the top ten manufacturers. Global imbalances in labor are being addressed by the invisible hand of the market, the greatest force for reducing poverty the world has ever known.

SOURCE: https://www.bcgperspectives.com...

Yet some still believe Chavez is the key to prosperity!
bballcrook21
Posts: 4,468
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5/22/2016 10:02:50 PM
Posted: 6 months ago
At 5/22/2016 9:57:59 PM, Greyparrot wrote:
At 5/22/2016 9:11:46 PM, bballcrook21 wrote:
Not long ago I was criticized for saying that one of the great benefits of international trade is that global wages revert to the mean. Some people saw this as an endorsement of lower wages in the U.S.

Well, now there's evidence that such a process is indeed taking place, and it's to the benefit of the U.S. For many years, $15.00/hr manufacturing jobs in America have been replaced by $0.50/hr jobs in China. But over that time, the laws of supply and demand have been pushing Chinese wages higher. They are now approaching $5.00/hr, and the country is losing its cost advantage. We are already seeing signs that some of those jobs are coming back to the West, where wage growth has been much slower, and where we still retain better workforce quality and lower energy costs.

This is what I meant by wages reverting to the mean. China, or anyone for that matter, could not offer low wages forever, as market forces eventually lead to wage growth. Likewise, America could not continue to pay excessive wages before international competition slowed them down.

In the process, Chinese workers now make much more and have lower poverty, while American workers can look forward to a revitalized market for domestic manufacturing jobs as our cost index is now the second lowest in the top ten manufacturers. Global imbalances in labor are being addressed by the invisible hand of the market, the greatest force for reducing poverty the world has ever known.

SOURCE: https://www.bcgperspectives.com...

Yet some still believe Chavez is the key to prosperity!

Well, some still believe that the wage gap exists or that Islam is the religion of peace, so we can all assume that this is yet another example of humanity's never ending stupidity.
If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand. - Friedman

Underlying most arguments against the free market is a lack of belief in freedom itself. -Friedman

Nothing is so permanent as a temporary government program. - Friedman

Society will never be free until the last Democrat is strangled with the entrails of the last Communist.
bballcrook21
Posts: 4,468
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5/23/2016 1:46:39 AM
Posted: 6 months ago
Bump
If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand. - Friedman

Underlying most arguments against the free market is a lack of belief in freedom itself. -Friedman

Nothing is so permanent as a temporary government program. - Friedman

Society will never be free until the last Democrat is strangled with the entrails of the last Communist.
16kadams
Posts: 10,497
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5/23/2016 6:00:05 PM
Posted: 6 months ago
Are you really just posting WAC stuff?
https://www.youtube.com...
https://rekonomics.wordpress.com...
"A trend is a trend, but the question is, will it bend? Will it alter its course through some unforeseen force and come to a premature end?" -- Alec Cairncross
slo1
Posts: 4,364
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5/23/2016 6:14:03 PM
Posted: 6 months ago
At 5/22/2016 9:11:46 PM, bballcrook21 wrote:
Not long ago I was criticized for saying that one of the great benefits of international trade is that global wages revert to the mean. Some people saw this as an endorsement of lower wages in the U.S.

Well, now there's evidence that such a process is indeed taking place, and it's to the benefit of the U.S. For many years, $15.00/hr manufacturing jobs in America have been replaced by $0.50/hr jobs in China. But over that time, the laws of supply and demand have been pushing Chinese wages higher. They are now approaching $5.00/hr, and the country is losing its cost advantage. We are already seeing signs that some of those jobs are coming back to the West, where wage growth has been much slower, and where we still retain better workforce quality and lower energy costs.

This is what I meant by wages reverting to the mean. China, or anyone for that matter, could not offer low wages forever, as market forces eventually lead to wage growth. Likewise, America could not continue to pay excessive wages before international competition slowed them down.

In the process, Chinese workers now make much more and have lower poverty, while American workers can look forward to a revitalized market for domestic manufacturing jobs as our cost index is now the second lowest in the top ten manufacturers. Global imbalances in labor are being addressed by the invisible hand of the market, the greatest force for reducing poverty the world has ever known.

SOURCE: https://www.bcgperspectives.com...

Bring this up with Donald Trump. The invisible hand doesn't care that China does not operate under the same environmental regulation or even worker protections. Those economic and political constraints offer tremendousome advantage. People like Trump don't see the environmental concerns would be likey to eliminate restrictions such as permittable air pollution rather than negotiate terms to make that imbalance more equitable.
bballcrook21
Posts: 4,468
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5/23/2016 9:34:40 PM
Posted: 6 months ago
At 5/23/2016 6:14:03 PM, slo1 wrote:
At 5/22/2016 9:11:46 PM, bballcrook21 wrote:
Not long ago I was criticized for saying that one of the great benefits of international trade is that global wages revert to the mean. Some people saw this as an endorsement of lower wages in the U.S.

Well, now there's evidence that such a process is indeed taking place, and it's to the benefit of the U.S. For many years, $15.00/hr manufacturing jobs in America have been replaced by $0.50/hr jobs in China. But over that time, the laws of supply and demand have been pushing Chinese wages higher. They are now approaching $5.00/hr, and the country is losing its cost advantage. We are already seeing signs that some of those jobs are coming back to the West, where wage growth has been much slower, and where we still retain better workforce quality and lower energy costs.

This is what I meant by wages reverting to the mean. China, or anyone for that matter, could not offer low wages forever, as market forces eventually lead to wage growth. Likewise, America could not continue to pay excessive wages before international competition slowed them down.

In the process, Chinese workers now make much more and have lower poverty, while American workers can look forward to a revitalized market for domestic manufacturing jobs as our cost index is now the second lowest in the top ten manufacturers. Global imbalances in labor are being addressed by the invisible hand of the market, the greatest force for reducing poverty the world has ever known.

SOURCE: https://www.bcgperspectives.com...

Bring this up with Donald Trump. The invisible hand doesn't care that China does not operate under the same environmental regulation or even worker protections. Those economic and political constraints offer tremendousome advantage. People like Trump don't see the environmental concerns would be likey to eliminate restrictions such as permittable air pollution rather than negotiate terms to make that imbalance more equitable.

Did you even read what I said? The forces of the market is pushing up the wages in China, to the point in which they are only competitive at 4% more efficiency while they used to be at 20% or 30%. In fact, the economic policies that Trump advocates for are almost the same that Bernie, that Socialist halfwit, advocates for. Ending free trade will be disastrous for us.
If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand. - Friedman

Underlying most arguments against the free market is a lack of belief in freedom itself. -Friedman

Nothing is so permanent as a temporary government program. - Friedman

Society will never be free until the last Democrat is strangled with the entrails of the last Communist.
slo1
Posts: 4,364
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5/24/2016 1:24:23 AM
Posted: 6 months ago
At 5/23/2016 9:34:40 PM, bballcrook21 wrote:
At 5/23/2016 6:14:03 PM, slo1 wrote:
At 5/22/2016 9:11:46 PM, bballcrook21 wrote:
Not long ago I was criticized for saying that one of the great benefits of international trade is that global wages revert to the mean. Some people saw this as an endorsement of lower wages in the U.S.

Well, now there's evidence that such a process is indeed taking place, and it's to the benefit of the U.S. For many years, $15.00/hr manufacturing jobs in America have been replaced by $0.50/hr jobs in China. But over that time, the laws of supply and demand have been pushing Chinese wages higher. They are now approaching $5.00/hr, and the country is losing its cost advantage. We are already seeing signs that some of those jobs are coming back to the West, where wage growth has been much slower, and where we still retain better workforce quality and lower energy costs.

This is what I meant by wages reverting to the mean. China, or anyone for that matter, could not offer low wages forever, as market forces eventually lead to wage growth. Likewise, America could not continue to pay excessive wages before international competition slowed them down.

In the process, Chinese workers now make much more and have lower poverty, while American workers can look forward to a revitalized market for domestic manufacturing jobs as our cost index is now the second lowest in the top ten manufacturers. Global imbalances in labor are being addressed by the invisible hand of the market, the greatest force for reducing poverty the world has ever known.

SOURCE: https://www.bcgperspectives.com...

Bring this up with Donald Trump. The invisible hand doesn't care that China does not operate under the same environmental regulation or even worker protections. Those economic and political constraints offer tremendousome advantage. People like Trump don't see the environmental concerns would be likey to eliminate restrictions such as permittable air pollution rather than negotiate terms to make that imbalance more equitable.

Did you even read what I said? The forces of the market is pushing up the wages in China, to the point in which they are only competitive at 4% more efficiency while they used to be at 20% or 30%. In fact, the economic policies that Trump advocates for are almost the same that Bernie, that Socialist halfwit, advocates for. Ending free trade will be disastrous for us.

I don't understand why you are being combative. I just pointed out that Trump does not agree with you. I also point out that wages alone does show the entire picture and that there are other considerations such as worker and environmental regulations which impact competitivness.
bballcrook21
Posts: 4,468
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5/24/2016 1:31:41 AM
Posted: 6 months ago
At 5/24/2016 1:24:23 AM, slo1 wrote:
At 5/23/2016 9:34:40 PM, bballcrook21 wrote:
At 5/23/2016 6:14:03 PM, slo1 wrote:
At 5/22/2016 9:11:46 PM, bballcrook21 wrote:
Not long ago I was criticized for saying that one of the great benefits of international trade is that global wages revert to the mean. Some people saw this as an endorsement of lower wages in the U.S.

Well, now there's evidence that such a process is indeed taking place, and it's to the benefit of the U.S. For many years, $15.00/hr manufacturing jobs in America have been replaced by $0.50/hr jobs in China. But over that time, the laws of supply and demand have been pushing Chinese wages higher. They are now approaching $5.00/hr, and the country is losing its cost advantage. We are already seeing signs that some of those jobs are coming back to the West, where wage growth has been much slower, and where we still retain better workforce quality and lower energy costs.

This is what I meant by wages reverting to the mean. China, or anyone for that matter, could not offer low wages forever, as market forces eventually lead to wage growth. Likewise, America could not continue to pay excessive wages before international competition slowed them down.

In the process, Chinese workers now make much more and have lower poverty, while American workers can look forward to a revitalized market for domestic manufacturing jobs as our cost index is now the second lowest in the top ten manufacturers. Global imbalances in labor are being addressed by the invisible hand of the market, the greatest force for reducing poverty the world has ever known.

SOURCE: https://www.bcgperspectives.com...

Bring this up with Donald Trump. The invisible hand doesn't care that China does not operate under the same environmental regulation or even worker protections. Those economic and political constraints offer tremendousome advantage. People like Trump don't see the environmental concerns would be likey to eliminate restrictions such as permittable air pollution rather than negotiate terms to make that imbalance more equitable.

Did you even read what I said? The forces of the market is pushing up the wages in China, to the point in which they are only competitive at 4% more efficiency while they used to be at 20% or 30%. In fact, the economic policies that Trump advocates for are almost the same that Bernie, that Socialist halfwit, advocates for. Ending free trade will be disastrous for us.

I don't understand why you are being combative. I just pointed out that Trump does not agree with you. I also point out that wages alone does show the entire picture and that there are other considerations such as worker and environmental regulations which impact competitivness.

I know that Trump doesn't agree with me, but I thought you were saying that in particular as an insult towards me. I apologize for jumping to such a conclusion.

Also, the worker and environmental regulations are already taken into consideration when looking at that competitiveness chart.
If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand. - Friedman

Underlying most arguments against the free market is a lack of belief in freedom itself. -Friedman

Nothing is so permanent as a temporary government program. - Friedman

Society will never be free until the last Democrat is strangled with the entrails of the last Communist.