The problem is sub-living wage is something subjective and varies greatly while skills required to execute a particular labor function are relatively fixed.
This is exactly why outsourcing happens. The “living wage” in China is significantly lower than the “living wage” here. Yet the skills required to put together an iPhone are the same. China’s workers have a competitive advantage even after you factor in various transportation costs and IP theft costs.
The solution offered by US labor is to not allow businesses to access this more competitively priced labor and force them to use higher cost labor because people in America deserve some kind of minimum standard of living.
I don’t really have a problem with the goal of raising the standard of living and GDP for the citizens of America. I just believe that government interventions via regulations and labor protectionist policies isn’t the best way to grow the economy. Purely focusing on the consumer demand side for the pass 30 years has lead us to this slow growth economy we’re in now. Protecting labor from the natural forces of competition slows down innovation and growth.[/quote]
First, I would argue that the past 30 years have seen the transition from focusing on demand/labor to focusing on capital. Just look at our tax, labor (we’ve lost protection for labor in many ways over the past 30 years), immigration, and trade laws and regulations for evidence of this. Additionally, look at how income and asset accumulation have shifted over the past 30 years. There is no way one can argue that we have been focusing on labor/consumers over this time period.
I also don’t see how protecting labor inhibits innovation and growth, as long as it’s done wisely. We’ve had decades of incredible innovation in this country at the very time when labor was at its strongest. Might corporations have lower profit margins? Yes, but that doesn’t mean that innovation can’t exist, nor does it mean that growth will slow. Well-compensated labor is what causes the demand that spurs growth. Additionally, we need to differentiate between healthy growth and growth “for its own sake.”
Second, if we’re supposed to be concerned with opening up all markets to competition, then that should apply to corporate/business competition in addition to labor competition. No more IP protection, no more laws limiting who we can purchase goods or services from. No more licensing laws, just mandate that the existence or absence of a license must be fully disclosed. Every individual/entity should be able to compete with banks in lending, with stock brokers (or brokers of any type) in brokering deals, naturopathic/homeopathic doctors and herbalists should be able to practice without interference from the FDA or other agencies, etc. We should be able to choose our energy providers, cable providers, etc. We should be able to use paralegals or other representatives instead of attorneys whenever it suits us, etc.
The truth is that consumers do NOT have the ability to choose the lowest-priced provider of goods and services. These markets are highly regulated and controlled to keep competition out and to protect the interests of our corporations, educational system (mandated licensing), and the wealthy individuals who benefit from these things. Presumably, we do this to protect society, in general. I think an equally (or more) compelling case can be made for the protection of labor. Societies do not benefit when immense wealth is concentrated in a few hands while the masses live in sickness and squalor. Additionally, it is (well-compensated) labor that creates the demand necessary for these corporations to thrive.
