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Subj: Re: Thought experiment...
Posted: Sun Oct 19, 2008 at 12:37:55 pm CDT (Viewed 598 times)
Reply Subj: Thought experiment...
Posted: Sun Oct 19, 2008 at 07:13:44 am CDT (Viewed 552 times)

> > The ways to increase value are either to lower the cost (wage), or increase the productivity. That could be done by having a better educated worker, better facilities and processes, better leadership, etc.
> This comment interested me, so I engaged in a thought experiment.
> First, I tried imagining if, for any job type which is competitive on the global labor market, American workers could, without assistance from business owners or the government, somehow emerge so superior to their foreign counterparts that their unavoidable higher wages would be offset. Try as I might, I can't make this work in my head, because I know of no labor category for which the American worker is born superior to others or somehow nurtured to be superior to others. Left to random selection, the American worker will, on average, be no better than the foreign worker, and therefore will always be less desirable than the worker in the third world, due to the lower consumer prices that permit the third world worker to subsist on far less income.

Well, they could technically ask for lower wages (or not ask for higher wages), without the help from businesses or the government. That would increase their value, but not your requirement of increased productivity.

> So then I tried imagining what would happen if business owners or the government took a direct hand in this. I can see two things they could do. First, they could test young children for superior aptitude in a specific labor category, and steer those children deliberately in the direction indicated. Second, advanced training techniques could be applied to these naturally more apt children, to maximize their potential for the specific labor category. Short term, this would work. But eventually some third world countries, surely China and probably India, would copy both the test-and-steer process and the advanced training techniques, and we'd be back to square one, because China and India will surely have just as many naturally apt children and plenty of teachers to apply the advanced training to those children. Long term, competition would devolve once again into selection of the worker who can absorb the lowest wage, and that will always be the third world worker/consumer composite person who faces lower prices in the consumer market.

What you are talking about is separating children based on intelligence, and separating them so that they can specialize. Lots of countries already do something like this. Not all children have access to the same level of education.

I disagree with your thought that manufacturing will always come down to whichever worker can work for the cheapest wage. It will always come down to which country can produce a product the most efficiently. And I'll list some ways that the American worker can increase their efficiency.

1) Increase Education. More people need to go to, and finish college. The government can do this through various ways, such as the state providing tuition (like Georgia does), provide tax breaks for tutition, or help in other ways. This will simply allow for more innovation, one of the few things Americans do better than anyone else.

2) Specialize Education. I think that every member of society should have a basic level of education. But there should also be specialization in for certain students. In certain schools, students are allowed to joint enroll, having high school classes count as college classes, and vice versa. Do the same thing, but for students looking to get into technical and vocational fields. This will help to lessen the burden on manufacturing jobs alone, since those students will have something else to fall back on.

3) Reinvestment in American business. Update the factories, technology, and processes at American factories. As I mentioned earlier, the US steel industry is badly outdated. So are oil refineries. Everyone knows they need to be updated, but no one actually wants to spend the billions to do this. Things will have to change to encourage this, like reducing the corporate tax rates and personal income taxes, and even reducing capital gains taxes. Vote McCain! \:\)

4) Reduce wages. Get rid of, or drastically lower the minimum wage. Get rid of the vast power of labor unions. In the same way, get rid of the alot of the dumb rules that labor unions make companies use. Non safety rules of course.

I could probably keep going.

> My thought experiment leads me to conclude that, long term, the American worker's best strategy is to abandon the global labor markets to the third world, and focus exclusively on labor markets that are local, which means, primarily, focusing on service jobs.

The problem is, as EcMan noted, service jobs are also being shipped overseas. We all have experiences with foreign customer service employees, but other jobs are getting shipped as well.

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