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Old 2013-01-02, 17:35   Link #3581
Knight Errant
Join Date: Dec 2007
Location: Dublin, Ireland
Age: 29
Originally Posted by Vallen Chaos Valiant View Post
Planet-wide? Yes. Nation-wide? Only if the industry stays local. The "higher wages" you speak of currently occur in China. The owners of the industries might be American, but most of their employees aren't. Without serious incentives, any desire to improve the industry practice would involve transfering profits to overseas ventures.
Originally Posted by Anh_Minh View Post
Yes, but right now it means higher wages for Chinese workers. Who are more numerous, so maybe in the grand scheme of things it is, indeed, better. But that's not the same as saying it's great for everybody. Especially in the short term, and nobody here will be alive to see the long term anyway.
That is an incorrect way to view things. For one, within 10 years it's entirely likely that China will have lost what wage advantage it currently has. It is not a long term prospect.

Secondly, Industrial production today is not the same as the industrial production of your grandpa. That type of industry, driven by unskilled, cheaply payed workers who do repetitive and monotonous tasks is gone. It was destroyed by the Japanese in the 70s and 80s. Industry today is built on fewer skilled workers, not a mass of unskilled drones. Many people want to cling onto that idea, but it is a dead one. If you want to go back to those days, then prepare to go back to cheap, unreliable and flimsy products.

The primary factor in an industries success is not how low it's wages are, it's how productive it's workers are. 5 skilled skilled Japanese or Americans will always beat a legion of uneducated Chinese farm boys.

If Chinese industry is to beat American industry in the next 20 years, it will not be because of it's cheap labor. It will be because Chinese companies were willing to embrace the innovations that western companies weren't.

People blamed Japan's success on low wages too, they were wrong, Japan did not become an industrial behemoth based on cheap disposable factory labor. It became a behemoth because it was better then everyone else, and everyone else only responded by trying to block Japanese products and factories from being built.

If the basis of China's success is only it's wages and warped currency, then we're quite fortunate. Chinese industrial growth will inevitably collapse in that case.

But if China is genuinely better then us (and it's entirely possible that they are), then building a wall and plugging our ears will achieve nothing. They'll just keep getting better and better, and we'll just stagnate.

The reason American(and also European) industry took such a dive in the last 30 years is because they took the easy way out and still tried to compete with the rest of the world based on low wages, rather then focusing on improving worker productivity. And one of the best ways to improve productivity is to expose industries to the full force of the world market.

If we look at some of the best manufacturers in the world (think Toyota), they have not closed down their plants at home, because their workers cannot be easily replaced by cheap foreign drones.

I agree that Outsourcing is something that should be discouraged, but for me it's a question of labour laws, not tariffs.
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