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> and in a globalised world where most of the goods are made in countries where salaries are rising as well as inflation, blocking our wages is only sending us

by vkou 4y ago

> and in a globalised world where most of the goods are made in countries where salaries are rising as well as inflation, blocking our wages is only sending us to the third world . Just throwing this out here, but in a globalized world, by what mechanism would one expect Europeans and Americans will be able to enjoy a greater standard of living than people in, say, Asia? Are they somehow smarter? More productive? In control of more natural resources? If not, why would you expect that the first-third world gap to not continue to normalize?

4gotunameagain 4y ago
well, we _do_ have a head start and stable (post?)industrial societies with mechanisms already set in place.
bboygravity 4y ago
Because the USD is the world reserve currency. That's why.
- billforsternz 4y ago
  That might explain the USA, but it doesn't explain Canada, Europe, Australasia and Japan.
retinaros 4y ago
its normalizing but for the worst in developed economies. housing is now out of reach while decades ago a blue collar salary was enough,to own a house.(in the USA you can still get six digits blue collar jobs that lift you out of poverty and give you access to housing. in france that is merely a dream or a netflix show) today already for many qualified workers (tech for instance) staying in india vs coming to france is better (there are other factors like healthcare or other that are at play but in pure economic power it would just be better to have a good it job in india vs europe) that was definitly not the case 20 even 10 years ago.
- ubercore 4y ago
  Six figure blue collar jobs are not super common in the US.
  - notch898a 4y ago
    Definitely one of those "it depends" situations. For instance, you could be illiterate middle school drop-out and pretty easily make very close if not six figures if you worked near minimum wage canning work all year in Alaska or something by working the season of every available catch (16 hours a day lots of OT). And you'd bank all your post-tax earnings as they provide the housing/food normally too. You may work yourself to the bone but pretty much anybody in the US can make a killing.
    - jonfw 4y ago
      "Just move to one of the most remote and inhabitable places in the world, work twice as much as average, and you too can join the middle class"
      - notch898a 4y ago
        when I did it they paid for my flight, my housing, and my food... qualifications were homeless off the streets of seattle and I-9 (but lol, e-verify is not mandatory in alaska so as you can imagine such requirement was easily bypassed by anyone who wished). There is no real 'moving' process other than getting on the plane, everything is there. when you're working 16 hours a day 7 days a week you don't really notice much outside of the factory floor anyway. Whether it was remote or in Manhattan you wouldn't feel the difference as you do nothing but work. I was working ~112 hours a week when I was in Alaska.
      - ticviking 4y ago
        This is exactly how America became America.
        jonfw 4y ago
wizzwizz4 4y ago
> In control of more natural resources? I mean… yeah. That's not really related to the thread's topic, though. > why would you expect that the first-third world gap to not continue to normalize? I don't think that's the criticism. "Blocking our wages" probably isn't increasing the wealth of the people in Cold War non-aligned countries: is the money going to them, somehow? The direct effect is that employers (= the people who would be paying the extra wages) don't have to spend as much money paying their employees. What knock-on effects would lead to that improving things for people?
billforsternz 4y ago
I've been pondering this exact point for a while. I think we are seeing Western economies regressing to the mean, it's a long term trend. I'm not happy about it, but I can't claim it's not fair.
- RestlessMind 4y ago
  > I can't claim it's not fair. Fair to whom? Why should middle class in the West vote to allow outsourcing to cheaper countries? That will just destroy their well-paying jobs in exchange for some cheap Chinese goods and Indian call centers. I also feel the same way about current "remote first" trend - American software engineers are shooting themselves in the foot by embracing remote work. Wait until your salaries get normalized to Brazil or Indian levels. Anecdotally, my company had multiple rounds of layoffs and has started hiring all the backfills in the third world now.
  - amunicio 4y ago
    > Why should middle class in the West vote to allow outsourcing to cheaper countries? Because you can run but you can't hide. If you institute protectionist policies, you will in turn become less competitive. Hence, you will require even more protectionist policies, that in turn will make you even more uncompetitive. In the end, you will have higher prices for lower quality domestic products. I don't like gravity, but it doesn't mean I can ignore it and jump from tall buildings. While economics is not an exact science (probably not even a science), you cannot ignore its principles. If protectionist policies worked, we would have figured out by now. The truth is that limited protectionist policies might work to give a push to a nascent industry in the short to medium term. But it does hurt the country as a whole in the long term.
    - RestlessMind 4y ago
      > If you institute protectionist policies, you will in turn become less competitive less competitive against whom? If West had not shipped its factories to China, I am sure West would have still stayed competitive against China by miles. In fact, by shipping its technical know-how for manufacturing, West has allowed China to become more competitive. > I don't like gravity, but it doesn't mean I can ignore it and jump from tall buildings. Sure, but outsourcing is nothing like gravity. It is a mixture of greed on part of corporations to reduce labor costs, naivete on behalf of politicians who thought China and others would welcome Western values along with Western jobs and stupidity on part of voters who traded short term cheap junk for long term stable jobs.
avgcorrection 4y ago
Such “normalization” would then also, presumably, apply to the rich. Unless one thinks that a billionaire who makes ten million USD a day is ten thousand times more productive than even a very high-earning wage worker.
- wonderwonder 4y ago
  But are the ten thousand people he employs getting good wages because of his actions? Would they be making comparable salaries if he had not started his companies? He is not paid for productivity, he is rewarded for taking the initial risk and investing his own money.
  - v-erne 4y ago
    I think this story/abstraction of "owning money" has to break at some level. I mean if you believe, as I do, that money (especially at trillion level) is direct substitution for power over people and even whole societies then what happens if we let this global game of Monopoly to play to its seemingly inevitable conclusion ? Isn't this somehow antidemocratic in nature? And if you notice that inheritance is not unlike inheriting stance in aristocratic societies this capitalistic abstraction of ownership through money seems to crack.
    - wonderwonder 4y ago
      Most billionaires don't really have access to the cash that is included in their net worth, they are shares in their company. If they want to be liquid they have to sell the shares, sacrificing their control of their companies. Regarding the rich having an outsized influence in politics, I do agree, but I think the solution is to get rid of PAC's. Give the rich the same donation limits as everyone else. Strict legal enforcement should be put in place. I believe if you set a limit on an individuals net worth, the economy will lose one of its major drivers and job creators will potentially just hit that net worth, shrug and shut their companies down or pass them on to less capable people costing millions of jobs. Depending on the net worth cap, this could happen relatively early in a companies growth. I do strongly agree with a strong inheritance tax for individuals over an arbitrary net worth, something in the hundred millions range.
akhosravian 4y ago
It’s really eye opening how big the gap is not just in labor costs but also perishable goods. When I was in morocco 10 years ago one of the buckles for my motorcycle pants suspenders broke. I was able to get a local leather worker to create a pattern from the broken piece, craft the replacement, and integrate it into my suspenders overnight for under 5 USD. This was arranged by the hotel I was staying at, and wasn’t some special inside knowledge on my part. The mass manufactured replacement were more than 10x that cost, and made of lower quality materials. Morocco is not a rich country, but a lot of the world is even less wealthy.
- jxidjhdhdhdhfhf 4y ago
  You're only looking at that from a consumer perspective. On the other side of that transaction is a person earning only $5 for several hours of labor minus the cost of materials.
  - hcurtiss 4y ago
    And there's not much meat on that bone to redistribute to the elderly.
moonchrome 4y ago
> More productive? Yes. Capital let's you be more productive. Rest of the world is building up capital to increase productivity, but is also increasing demand. Resource limits are blips on the market.
joe_the_user 4y ago
Just throwing this out here, but in a globalized world, by what mechanism would one expect Europeans and Americans will be able to enjoy a greater standard of living than people in, say, Asia? The world standard of living should be equalized globally but it should be the present first world standard, not the present third world standard. This is certainly possible given increasing world productive capacities.
- sokoloff 4y ago
  The present first-world standard is enabled in large part by the present spread in costs of production (roughly: wages) in other areas. Certainly the phone you’re using and almost certainly the clothes you’re wearing were not made by people making a median Western wage.
RestlessMind 4y ago
> why would you expect that the first-third world gap to not continue to normalize? If the third world raises to the first world standards, then great. If that process involves first world standards falling to meet third world ones in the middle at the cost of first-world middle class, then there is a big problem. See where Trump and Sanders got most of their votes and you will start to see a pattern here.
philwelch 4y ago
Lots of Asian countries have a high standard of living too. One of the biggest differences is functioning institutions. As bad as some first world governments can seem from our perspective, they’re way better than the kleptocrats and warlords who rule some parts of the world. And yeah, when you have functioning institutions, you do end up with smarter and more productive populations because children can go to school instead of slaving away in the cobalt mines.

by vkou 4y ago

4gotunameagain 4y ago

well, we _do_ have a head start and stable (post?)industrial societies with mechanisms already set in place.

bboygravity 4y ago

Because the USD is the world reserve currency. That's why.

billforsternz 4y ago
That might explain the USA, but it doesn't explain Canada, Europe, Australasia and Japan.

retinaros 4y ago

its normalizing but for the worst in developed economies. housing is now out of reach while decades ago a blue collar salary was enough,to own a house.(in the USA you can still get six digits blue collar jobs that lift you out of poverty and give you access to housing. in france that is merely a dream or a netflix show) today already for many qualified workers (tech for instance) staying in india vs coming to france is better (there are other factors like healthcare or other that are at play but in pure economic power it would just be better to have a good it job in india vs europe) that was definitly not the case 20 even 10 years ago.

ubercore 4y ago
Six figure blue collar jobs are not super common in the US.
- notch898a 4y ago
  Definitely one of those "it depends" situations. For instance, you could be illiterate middle school drop-out and pretty easily make very close if not six figures if you worked near minimum wage canning work all year in Alaska or something by working the season of every available catch (16 hours a day lots of OT). And you'd bank all your post-tax earnings as they provide the housing/food normally too. You may work yourself to the bone but pretty much anybody in the US can make a killing.
  - jonfw 4y ago
    "Just move to one of the most remote and inhabitable places in the world, work twice as much as average, and you too can join the middle class"
    - notch898a 4y ago
      when I did it they paid for my flight, my housing, and my food... qualifications were homeless off the streets of seattle and I-9 (but lol, e-verify is not mandatory in alaska so as you can imagine such requirement was easily bypassed by anyone who wished). There is no real 'moving' process other than getting on the plane, everything is there. when you're working 16 hours a day 7 days a week you don't really notice much outside of the factory floor anyway. Whether it was remote or in Manhattan you wouldn't feel the difference as you do nothing but work. I was working ~112 hours a week when I was in Alaska.
    - ticviking 4y ago
      This is exactly how America became America.
      - jonfw 4y ago

wizzwizz4 4y ago

> In control of more natural resources? I mean… yeah. That's not really related to the thread's topic, though. > why would you expect that the first-third world gap to not continue to normalize? I don't think that's the criticism. "Blocking our wages" probably isn't increasing the wealth of the people in Cold War non-aligned countries: is the money going to them, somehow? The direct effect is that employers (= the people who would be paying the extra wages) don't have to spend as much money paying their employees. What knock-on effects would lead to that improving things for people?

billforsternz 4y ago

I've been pondering this exact point for a while. I think we are seeing Western economies regressing to the mean, it's a long term trend. I'm not happy about it, but I can't claim it's not fair.

RestlessMind 4y ago
> I can't claim it's not fair. Fair to whom? Why should middle class in the West vote to allow outsourcing to cheaper countries? That will just destroy their well-paying jobs in exchange for some cheap Chinese goods and Indian call centers. I also feel the same way about current "remote first" trend - American software engineers are shooting themselves in the foot by embracing remote work. Wait until your salaries get normalized to Brazil or Indian levels. Anecdotally, my company had multiple rounds of layoffs and has started hiring all the backfills in the third world now.
- amunicio 4y ago
  > Why should middle class in the West vote to allow outsourcing to cheaper countries? Because you can run but you can't hide. If you institute protectionist policies, you will in turn become less competitive. Hence, you will require even more protectionist policies, that in turn will make you even more uncompetitive. In the end, you will have higher prices for lower quality domestic products. I don't like gravity, but it doesn't mean I can ignore it and jump from tall buildings. While economics is not an exact science (probably not even a science), you cannot ignore its principles. If protectionist policies worked, we would have figured out by now. The truth is that limited protectionist policies might work to give a push to a nascent industry in the short to medium term. But it does hurt the country as a whole in the long term.
  - RestlessMind 4y ago
    > If you institute protectionist policies, you will in turn become less competitive less competitive against whom? If West had not shipped its factories to China, I am sure West would have still stayed competitive against China by miles. In fact, by shipping its technical know-how for manufacturing, West has allowed China to become more competitive. > I don't like gravity, but it doesn't mean I can ignore it and jump from tall buildings. Sure, but outsourcing is nothing like gravity. It is a mixture of greed on part of corporations to reduce labor costs, naivete on behalf of politicians who thought China and others would welcome Western values along with Western jobs and stupidity on part of voters who traded short term cheap junk for long term stable jobs.

avgcorrection 4y ago

Such “normalization” would then also, presumably, apply to the rich. Unless one thinks that a billionaire who makes ten million USD a day is ten thousand times more productive than even a very high-earning wage worker.

wonderwonder 4y ago
But are the ten thousand people he employs getting good wages because of his actions? Would they be making comparable salaries if he had not started his companies? He is not paid for productivity, he is rewarded for taking the initial risk and investing his own money.
- v-erne 4y ago
  I think this story/abstraction of "owning money" has to break at some level. I mean if you believe, as I do, that money (especially at trillion level) is direct substitution for power over people and even whole societies then what happens if we let this global game of Monopoly to play to its seemingly inevitable conclusion ? Isn't this somehow antidemocratic in nature? And if you notice that inheritance is not unlike inheriting stance in aristocratic societies this capitalistic abstraction of ownership through money seems to crack.
  - wonderwonder 4y ago
    Most billionaires don't really have access to the cash that is included in their net worth, they are shares in their company. If they want to be liquid they have to sell the shares, sacrificing their control of their companies. Regarding the rich having an outsized influence in politics, I do agree, but I think the solution is to get rid of PAC's. Give the rich the same donation limits as everyone else. Strict legal enforcement should be put in place. I believe if you set a limit on an individuals net worth, the economy will lose one of its major drivers and job creators will potentially just hit that net worth, shrug and shut their companies down or pass them on to less capable people costing millions of jobs. Depending on the net worth cap, this could happen relatively early in a companies growth. I do strongly agree with a strong inheritance tax for individuals over an arbitrary net worth, something in the hundred millions range.

akhosravian 4y ago

It’s really eye opening how big the gap is not just in labor costs but also perishable goods. When I was in morocco 10 years ago one of the buckles for my motorcycle pants suspenders broke. I was able to get a local leather worker to create a pattern from the broken piece, craft the replacement, and integrate it into my suspenders overnight for under 5 USD. This was arranged by the hotel I was staying at, and wasn’t some special inside knowledge on my part. The mass manufactured replacement were more than 10x that cost, and made of lower quality materials. Morocco is not a rich country, but a lot of the world is even less wealthy.

jxidjhdhdhdhfhf 4y ago
You're only looking at that from a consumer perspective. On the other side of that transaction is a person earning only $5 for several hours of labor minus the cost of materials.
- hcurtiss 4y ago
  And there's not much meat on that bone to redistribute to the elderly.

moonchrome 4y ago

> More productive? Yes. Capital let's you be more productive. Rest of the world is building up capital to increase productivity, but is also increasing demand. Resource limits are blips on the market.

joe_the_user 4y ago

Just throwing this out here, but in a globalized world, by what mechanism would one expect Europeans and Americans will be able to enjoy a greater standard of living than people in, say, Asia? The world standard of living should be equalized globally but it should be the present first world standard, not the present third world standard. This is certainly possible given increasing world productive capacities.

sokoloff 4y ago
The present first-world standard is enabled in large part by the present spread in costs of production (roughly: wages) in other areas. Certainly the phone you’re using and almost certainly the clothes you’re wearing were not made by people making a median Western wage.

RestlessMind 4y ago

> why would you expect that the first-third world gap to not continue to normalize? If the third world raises to the first world standards, then great. If that process involves first world standards falling to meet third world ones in the middle at the cost of first-world middle class, then there is a big problem. See where Trump and Sanders got most of their votes and you will start to see a pattern here.

philwelch 4y ago

Lots of Asian countries have a high standard of living too. One of the biggest differences is functioning institutions. As bad as some first world governments can seem from our perspective, they’re way better than the kleptocrats and warlords who rule some parts of the world. And yeah, when you have functioning institutions, you do end up with smarter and more productive populations because children can go to school instead of slaving away in the cobalt mines.