More Globalization Increases Wages

Shrinking Chinese work force pushes wages up


For decades, the huge Chinese work force of factory hands and construction workers had little choice but to work long hours in often poor conditions for pitifully low salaries.

But a mushrooming of factories, even in the country's sluggish interior, means that these days workers have increased clout when hunting for jobs. Wages are rising, squeezing margins at companies.

"Companies are finding it harder and harder to get people," said Xue Guojie, visiting his parents' three-room farmhouse here in Henan, a central province that is home to millions of the migrant laborers who fan across China ever year.

But factories are springing up across the country, including in dusty rural districts like Fengqiu County, allowing workers to be more selective about where they work...

http://www.iht.com/articles/2008/03/10/business/chilabor.php

 

Isn't this how wages will be increased with globalization? People complain about the wages in these developing countries but a part of the solution is to actually have more sweatshops to cause companies to have to compete to attract and keep workers giving workers more options and causing wages,working conditions and benefits to improve.

 

Ah yes, the rising water theory of globalization. You are correct, globalization does increase the wages of the very poorest workers as extremely low paying jobs are replaced with low paying jobs. The problem is it also puts downward pressure on the wages of middle class workers in wealthier countries as good paying jobs are replaced with low paying jobs. The result of this is not shared prosperity, but rather shared poverty.

 

The lowering of wages in the middle class is perfectly acceptible as it also correlates with a decline in the costs of trade goods. The problem is that many companies are not allowing the cost of goods to decline as America's economy is pretty much a failing controlled market. This is not because of our benevolent government failing to understand sound economic policies, but on the average american refusing to take wage cuts. The economy will not normalize until people understand that in a globalized society, 10,000 dollars a year is more than enough.

 

I agree and would like to add that for $10,000 a year in America, you couldn't afford your own crapper. :nopity:

 

I didn't make it clear enough in my earlier statement, that the price of goods needs to come down dramatically in this country. Globalization is meant to increase production and competition moreso than the profit margins of the already established companies. The reason it is not working is that instead of passing the savings onto the consumers, these companies are monopolizing the market in the states. If product prices were to represent fully the reduction in production costs, a reduced salary in the states woudl be more than enough.