American Workers are Overpaid
Not CEO’s, but American workers are overpaid? I’m sorry, this struck me as funny in a sick sort of way.
American workers are overpaid, relative to equally productive employees elsewhere doing the same work. If the global economy is to get into balance, that gap must close.
Of course, workers in the United States should earn more than their peers in China, Moldova or Vietnam. Americans take advantage of the higher productivity that makes their country rich: better education and infrastructure, abundant capital and a strong work ethic. But how much higher should American wages be?
The answer depends in large part on two measures: the difference in productivity in making goods that can be traded across borders, and the quantity of such goods. Both measures point to a narrowing wage gap.
Many factors are raising productivity in poor countries. Fast development, cheap capital and more efficient shipping all help. Cheap communication via the Internet reduces costs and makes it easy to trade many more goods and especially services.
November 14th, 2009 at 8:01 pm
looks like someone hit the wine bottle before they wrote the piece.
Or, maybe when compared to what workers make in other countries for comparable work the article might not be so off the mark. To reduce American salaries to make the world more equitable is not the solution, I think …although, corporatists being pressured to bring back the jobs they exported to third world countries so they could pay those workers hardly anything, might really want labor wages here in the U.S. to go down. Isn’t raising labor’s minimum wage something that our dear senators generally oppose? They are, as always in the pockets of the corporations.
And on a slightly different note,
We drove through a protest un U.S.1 this afternoon (hatemongering against illegal immigrants,big signs, big American flags, lots of anti-immigrant feelings) Something about it made me think of what Germany must have been like in the 30s/40s with their anti-semitic feelings… also being displayed in this afternoon protest/rally/freedom of speech assembly there were lots of anti-Obama signs. It was all very inflammatory. No facts to support anything they were saying, but lots of emotionality being displayed and elicited.
November 15th, 2009 at 5:33 am
If “the gap must close” by raising the real incomes of workers in other countries, then fine. Of course, the solution the authors have in mind is different, as the reference to American workers’ “excessive pay” affirms.
If free trade is leading to falling wages, higher unemployment, or inflation as a disguised way of cutting wages (the three options the authors offer), then we need to re-think free trade. It was supposed to make things better. Instead we’re hearing a succession of excuses for why it’s making things worse but we have to stick with it anyway because of, well, what sounds more like religious devotion to dogma than any sort of economic reasoning.
Infidel753´s last blog ..Free speech, hate speech
Sage Reply:
November 15th, 2009 at 1:11 pm
I agree.
November 15th, 2009 at 8:36 pm
Why, when discussing free trade, do we think of comparing ourselves to low wage, third world countries rather than Europe? Europe also does manufacturing (my car was made in Belgium), and has a standard of living comparable to ours. Last week the world’s largest cruise liner, built in Finland, was launched.