Monday, December 14, 2009

I honestly don't understand how some things can be ignored

For example, there's this:
The average wage of a Chinese manufacturing worker in comparison to his American counterpart remained constant over the past 30 years, hovering around 2%. This means that despite the massive increase in Chinese exports to the US, a Chinese factory worker still earns a 50th of his American counterpart, just like in 1980. In comparison, the average wage of Japanese manufacturing workers in comparison to their American counterparts went from 7% in 1950 to nearly 60% in 1980. Korean manufacturing workers enjoyed a similar relative increase in their buying power between 1975 and 2000, as did their counterparts in Taiwan.

Though, I share some of the doubts expressed by Yves in the above link, I doubt that it's that great an exaggeration. Still, I find it hard to imagine awareness of that fact eliciting much more than than a shrug from the average American.

Well, if you subscribe to Harper's Magazine, it's something you might want to bear in mind when you read the January Notebook.

The issue it seems to me is that the reason is that China has a much greater reserve of labor.

At present only a small portion of the Chinese population is involved in manufacturing and many many millions are continuing to migrate to the cities in search of a better life. Wages will not begin to rise until a much large portion of the population participates in the economic expansion.

Japan and Korea both had far smaller economies and populations, requiring far less time to affect the entire national economy.

Japan in particular had reached a fairly high level of industrialization prior to WWII and was recovering from the war and so had significant abilities already in place.
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