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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: Sam who wrote (24835)	1/18/2004 7:07:45 PM
From: Dayuhan	Read Replies (3) \| Respond to of 793681

As long as workers don't have collective bargaining power, and as long as governments don't support that they won't, wages will continue to edge downward as jobs flow to low wage areas The emergence of collective bargaining power is a consequence not only of the presence or absence of unions, but of the relative supply and demand for labor in a given area. It is impossible for collective bargaining to move wages for low-skill jobs upward in a market with a huge oversupply of low-skill labor. What does happen, over time, is that as the relatively cheap labor supply draws manufacturers into a market, the labor surplus is reduced, and bargaining power increases. Productivity generally increases as well, as workers gain experience, and if government is at all competent, the increasing revenues gained from greater economic activity result in improved infrastructure. As these factors come into play, wage costs can increase without decreasing the market’s appeal to investors. This has already happened in many places in Asia: countries like Korea (which is NOT, by the way, a third world country) and Taiwan, which were once havens for labor-intensive export oriented industry, are now well into the medium-wage category, and are themselves investing in other countries. Malaysia, China, and Thailand are moving along the same track. Countries like Vietnam or Bangladesh have no real competitive advantage other than low labor costs, so initially they have little choice but to try and attract the sort of labor intensive low-skill processes that Korea and Taiwan have outgrown. It would be pointless to insist that Vietnamese workers be paid a Malaysian wage, let alone an American wage. If the investors have to pay Malaysian costs, they’ll just go to Malaysia, which does nothing at all for the Vietnamese workers. What a worker in an export-oriented plant in Vietnam earns relative to a Malaysian or American worker is irrelevant. What matters is what that worker earns relative to what he’s be earning if the job wasn’t there, which is often nothing. A low-paying job is better than no job, and as the low wages attract more companies, the labor surplus will come down, allowing wages to rise. Eventually more sophisticated manufacturing emerges, and the low-skill jobs move on to a new location. Hopefully someday Vietnam and Bangladesh will be where Thailand and Malaysia are now, and those low-paying jobs will migrate to Africa, where they could make the difference between survival and starvation, just as they do in Vietnam and Bangladesh today. Another critical item in this equation is the relationship between the cost of labor the market value of the goods and services being produced. Many Americans have grown accustomed to the notion that any working person is “entitled” to a wage high enough to allow comfortable living. If wages are escalated to a point out of proportion to the value of the products and services the workers are producing, the jobs will go somewhere else, no matter what anybody says or does, and no matter what the workers think their entitlements are.