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People need to first understand that the minimum wage in america allows you to save more money as a single male then working as an engineer in a large part of I

People need to first understand that the minimum wage in america allows you to save more money as a single male then working as an engineer in a large part of India and many other poor countries. The salary in my own country for a mid level software engineer is 600 dollars a month ! Think about that for a moment . . . . Now imagine if you are a company, you can hire a developer with 10-20 years of experience at the cost below your junior developer. Why won't you do it ? The other part of the equation is the fact that if you do not do it you are a strong competitive disadvantage compared to companies. Now many people on HN might want to crack down on this Donald Trump Style. But actually cracking down on it will make matters worse. Software, IP is really global these days. So as soon as wages are pushed up in america, the flow of FDI ( which is growing at 5x every year in India ! ) will shoot even higher. Someone made this argument that I find the best explanation for what is going on. Countries like India have more untapped computational power compared to the US, just due to having 4x the population and not even 1:1 the wealth. There is nothing immoral about what is going on. Its capitalism working as intended - I also do not think americans are losers in this game, it just means they will not see any investment or improve in their standard of living while private money is busy improving the lives of everyone else.

theocean154 10y ago
Arbitrage in labor markets results in a regression to the global mean. Every year that wages do not grow in the US, the buying power of those wages decreases due to inflation (increasing the cost of living). This will result in the standard of livings of the US moving towards that of India. And as a US citizen, I do not want this. If capitalism worked as intended, we'd be a world full of slaves fighting for pennies and shitting in open pits while our masters live like kings.
- wrong_variable 10y ago
  I think that is not what is happening. Standard of living in the US is growing - but very slowly. While standard of living is increasing rapidly in developing countries. You can see the same issue in China, where standard of living has actually grown rapidly. I am not arguing to make American standard of living regress at the expense of improving the standard of living for other developing nations. Standard of Living would have risen regardless of FDI money moving into India and China - the only difference is that western capital is allowed to make money off that development. The issue is that the amount of money that is required to bring any massive improvement in living standard in western countries is really large. Things like self driving cars are much harder to create - then just copying current technology and distributing it. This is why it should have been upto western govt to channel a lot of public money and tax multinationals aggressively so that western countries can have accelerated rate of growth.
atombath 10y ago
Well it sounds like with all those advantages that India is in a prime position to start building software solutions at 1/4 the cost that western countries would charge! Good luck, guys!

theocean154 10y ago

Arbitrage in labor markets results in a regression to the global mean. Every year that wages do not grow in the US, the buying power of those wages decreases due to inflation (increasing the cost of living). This will result in the standard of livings of the US moving towards that of India. And as a US citizen, I do not want this. If capitalism worked as intended, we'd be a world full of slaves fighting for pennies and shitting in open pits while our masters live like kings.

wrong_variable 10y ago
I think that is not what is happening. Standard of living in the US is growing - but very slowly. While standard of living is increasing rapidly in developing countries. You can see the same issue in China, where standard of living has actually grown rapidly. I am not arguing to make American standard of living regress at the expense of improving the standard of living for other developing nations. Standard of Living would have risen regardless of FDI money moving into India and China - the only difference is that western capital is allowed to make money off that development. The issue is that the amount of money that is required to bring any massive improvement in living standard in western countries is really large. Things like self driving cars are much harder to create - then just copying current technology and distributing it. This is why it should have been upto western govt to channel a lot of public money and tax multinationals aggressively so that western countries can have accelerated rate of growth.

atombath 10y ago

Well it sounds like with all those advantages that India is in a prime position to start building software solutions at 1/4 the cost that western countries would charge! Good luck, guys!