4 ms·

What other strategies have other countries used?

roenxi 4y ago
I'm, thinking mainly of China. They maintained globally low wages, had special low-tax zones like Shenzhen and bulldozed through any NIMBYs to build a huge amount of physical capital - power plants, ports, transport links, etc. The dividends for these actions are a population that is roughly an order of magnitude more wealthy than when they started and catapulting a jaw dropping number of people out of poverty. India might be a similar example but I haven't checked; my understanding is they started copying China and building stuff rather than maintaining a socialist policy that was keeping them poor. A strategy like higher wages or forcing better conditions for workers through legislation is basically the exact opposite. In 20, 30 years time people's material living standard is going to be determined by how much productive capacity was bought to bear and how much new capital was built. Minimum wages are a sideshow that don't move the levers that make people wealthy. If average wages halved and people were allowed to build out cheap energy stations like China has (be that whatever tech), we'd probably find living standards going up rather than down. The key to me, I suppose, is if the goal here is for people to be better off, we have very serious examples of people becoming better off quickly. The superficial evidence to me is that it was investing in new capital, especially manufacturing capacity and energy. Which makes sense, because to live a comfortable life we need an overabundance of manufactured goods and energy. Minimum wages are a policy that pushes against that in a small way. If wages go up, if it does anything it will probably reduce manufacturing. If that happens that happens (China is so wealthy now that people aren't rushing across the globe to manufacture there for example), but government intervention to force wages up is a terrible idea. The goal should be for living standards to go up because there is so much stuff available it is hard for them not to. If you look at the USs energy per capita stats, the raw total figure is dropping. It doesn't matter how much time people spend lobbying for higher wages, if the energy per capita stat is dropping then someone is going to have less energy available to them no matter how much kicking and screaming there is. Less energy means less stuff & less comfort. If they get wages up that won't change the physical reality, at best it'll mean some different group of people will get really stomped with shortages. That is not an environment where anyone is likely to thrive.

I'm, thinking mainly of China. They maintained globally low wages, had special low-tax zones like Shenzhen and bulldozed through any NIMBYs to build a huge amount of physical capital - power plants, ports, transport links, etc. The dividends for these actions are a population that is roughly an order of magnitude more wealthy than when they started and catapulting a jaw dropping number of people out of poverty. India might be a similar example but I haven't checked; my understanding is they started copying China and building stuff rather than maintaining a socialist policy that was keeping them poor. A strategy like higher wages or forcing better conditions for workers through legislation is basically the exact opposite. In 20, 30 years time people's material living standard is going to be determined by how much productive capacity was bought to bear and how much new capital was built. Minimum wages are a sideshow that don't move the levers that make people wealthy. If average wages halved and people were allowed to build out cheap energy stations like China has (be that whatever tech), we'd probably find living standards going up rather than down. The key to me, I suppose, is if the goal here is for people to be better off, we have very serious examples of people becoming better off quickly. The superficial evidence to me is that it was investing in new capital, especially manufacturing capacity and energy. Which makes sense, because to live a comfortable life we need an overabundance of manufactured goods and energy. Minimum wages are a policy that pushes against that in a small way. If wages go up, if it does anything it will probably reduce manufacturing. If that happens that happens (China is so wealthy now that people aren't rushing across the globe to manufacture there for example), but government intervention to force wages up is a terrible idea. The goal should be for living standards to go up because there is so much stuff available it is hard for them not to. If you look at the USs energy per capita stats, the raw total figure is dropping. It doesn't matter how much time people spend lobbying for higher wages, if the energy per capita stat is dropping then someone is going to have less energy available to them no matter how much kicking and screaming there is. Less energy means less stuff & less comfort. If they get wages up that won't change the physical reality, at best it'll mean some different group of people will get really stomped with shortages. That is not an environment where anyone is likely to thrive.