Low wages isn't the answer... Sweden and Denmark have very high wages but are still productive. Labor flexibility is the key here, not wages.
I am no economist so would not be 100% on the mark but for my understanding the Low wages mean: Folks will not be able to afford drive thru coffee each morning for $1.99 or so. The coffee shop loses business and they in turn bring their prices down. Same holds true for car manufacturers, gadgets, construction etc. Lower prices mean American goods and services become more competitive globally. America exports more and better yet brings lost jobs back home. Folks sitting idle are now working and paying taxes, government balances the budgets, improves current account deficits. My figures might not be 100% correct but some place I read that a car of $20K has the 'out of the factory door' cost of only $5K. Rest of the 15K is to do with middlemen and related markups. Even in this $5K factory cost, wages account for nearly 50-60% of the total. This example alone tells as to how much influence do the 'wages' have on the American goods and their competitiveness both domestically and in foreign markets. Good part is that countries like BRIC have started consuming a lot more and a 'clever market' always seeks a higher quality for a good price. American goods are already in the top three rankings in 'quality vrs price' logic. How many countries would opt for Boeing 787 if costs $20M less than its Airbus rival. I bet a lot more than currently on the list. China can sell 100 Million T-Shirts to US for $100M and US can turn around and sell 1 Boeing jet like 737-800 for $100M and offset the trade imbalance. So a Boeing employee making $50/Hour and painting the same door panels for 20 years does not make sense when it comes to fielding goods in the competitive markets.
Most of you on ET are fools and even in the bible it says not to argue with FOOLS. So, I let the FOOLS stand on their own. Cheaper doesn't mean better. Lower wages only hurt those making it. I am not in that arena. I make very good money. However, when I do deal with the lower wage earning population, ie; Most of your "Service Industry", I find them not very happy. As wages fall, like they are in the US, the cost of living is not falling with it you brain dead fools. The COST OF LIVING IS RISING. I'm for free markets, let the markets dictate wage. Some jobs will be low wage and some will not. But the idea that Low Wages will cause "PRICES TO DROP" is not only a fucking stupid and illogical call, it isn't worth discussing. Second, your wrong on foreigners. Most foreigners are far more educated than the local US population, on many subjects. To admit this is not to sell the US short, the fucking retards in this country have already accomplished that, but it is to wake up and make yourself more 'Competitive'. Half you nitwitz will be on the Gov's tit in a few years anyway.
Unions have had a big hand in killing the industries like Airlines, Auto and most of the manufacturing in the US. Other side of the double whammy, CEOs/CFOs making $20M for 6 months of 'mere attendance' is another 'excessive payout'. Does anyone know what does a CEO of WIPRO makes annually including salary and bonus (India software company that imports lots of jobs from US). Mere $2M a year. This is cream of the cream. Average CEO salary in India is $500K tops including salary and bonus.
'But the idea that Low Wages will cause "PRICES TO DROP" is not only a fucking stupid and illogical call, it isn't worth discussing.' It's not worth discussing because it is soooooooooo true. Basic demand and supply equation. Why do companies introduce a product at low price and then jack it up afterwards when demand goes up. US has the capacity to retain quality with lower wages and I am not talking 50%.................mere 10-20% will show results easily.
Because American unions are a disease to free markets. Don't blame foreign labor. Blame the CEO's who hire them and the unions who force them to so they can compete globally.
this thread is a complete waste since it starts from a wrong assumption. the bottom line answer is that debt. an overpaid and an overlarge government sector is killing the US. add excessive regulation of private industry means the US is headed for disaster. lowering wages in the private sector are not the cure.
do you know how many people does government employ. Roughly 21 Million. So smaller government better mean lesser wages to these 21 million rather than laying off 2 to 5M folks and creating a chaos in the society. bottomline message is: HARD PILL IS THE WAY TO GO. US had easy going on credit and debt financed parties and now time to tighten up. Better to have 21M employees earning 80% of salaries before than having extra 5 million unemployed asking government to issue unemployment and welfare checks.
do you know how many people does government employ. Roughly 21 Million as of 2006. http://www.data360.org/dsg.aspx?Data_Set_Group_Id=228 So smaller government better mean lesser wages to these 21 million rather than laying off 2 to 5M folks and creating a chaos in the society. bottomline message is: HARD PILL IS THE WAY TO GO. US had easy going on credit and debt financed parties and now time to tighten up. Better to have 21M employees earning 80% of salaries before than having extra 5 million unemployed asking government to issue unemployment and welfare checks.