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> Some goods and services are tradeable Most goods are tradable, and for decades now manufacture of consumer goods relocates relatively quickly in search of lo
by wahern 5y ago
> Some goods and services are tradeable
Most goods are tradable, and for decades now manufacture of consumer goods relocates relatively quickly in search of low cost labor. This leaves a surplus of workers behind, suppressing wages in industries with low costs of entry--remaining manufacturing but especially non-professional services.
IOW, labor markets are strongly globalized from the perspective of capital. A little less so from the perspective of laborers, though their wages remain stagnant all the same, so in many ways it's a distinction without a difference.
- eru 5y agoYour logic would suggest that workers in tradable industries get paid less than those in non-tradeable goods and services, wouldn't it? That's something we can look into.
- wahern 5y ago> Your logic would suggest that workers in tradable industries get paid less than those in non-tradeable goods and services, wouldn't it? Not necessarily, as the laborers displaced by off-shoring are now competing in the labor pool for many other non-tradeable industries. That's what I meant when I said, "suppressing wages in industries with low costs of entry--remaining manufacturing but especially non-professional services." An increase in supply relative to demand usually will mean a lower clearing price (i.e. more people for fewer jobs usually means lower accepted wages).