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Yakk · 01-21-2007, 10:55 AM

So we have a few problems.

First, there is a world-wide excess of unskilled labour. The supply of unskilled labour, world-wide, is enough to lower the value of unskilled labour below starvation wages.

You can hire someone at starvation wages or better and train them a simple skill. The value of their skill sometimes makes them worth feeding above starvation wages.

The interesting part is, most of the value of their labour is actually captured by regional stability and lack of government regulation, plus sufficient infrastructure to cheaply bootstrap an industrial farm. Regions that are both stable and have governments willing to kowtow to corperations are what the corps. look for and what makes paying the wages worthwhile. People they can get anywhere.

Now, there are interesting demographic shifts going on. Rich people who have old age security tend to have fewer children, so areas that get rich tend to have their population go all pear shaped. This means the supply of labour in these rich areas shrinks -- hence the current immigration issues in the west and the wealthier areas of the middle east/asia.

The end of the cold war caused both Russia and the USA to pull money out of funding random puppet dictators. This seems to be causing a downswing in warfare, and an upswing in the wealth of lots of areas. Africa, while still a basketcase, is starting to bootstrap itself up. More and more semi-Democracies (nearly every state in the world pretends to be a democracy) are actually starting to see power flow based on voting.

If stability spreads, corps. will continue to look for stable areas with infrastructure (or enough to build more), cheap labour, and governments who are amienable.

The real costs are probably the materials and the infrastructure, more than the labour. Some corps. will pay crap for labour, and some will pay more -- but the supply of the cheap labour won't determine the price for a long while. They'll pay based off of the economics of slavery, much like Henry Ford did.

When you pay a worker more, they are more likely to stay around after they have gathered their skills. They are less likely to get sick. And, if you sell luxury goods the worker might want, you can usually recoup most of the costs. Starving a worker, unless skill is utterly useless in the job, is stupid.

Each time a company does this, they build up the local infrastructure. New power, sewer, transportation lines are built. The local economy gets a small infusion of hard currency, which (ideally) is spent by other locals on both importing luxuries and buying the means of production and making money.

Now, remember that the industrial West has been averaging 3% or so real growth for the last 200 to 300 years. 3% over 200 years grows the economy by a factor of 370 -- so don't expect an overnight miracle.

Even if the area has economic growth at 10% per year, it would take 62 years to catch up to the West today assuming they start out where the west was 200 years ago, by which point the West would be 6 times wealthier than it is today. It would take 87 years to catch up completely with the West.

See all those roads, buildings, wires, railroads, ports? Institutions (universities, government bureaus, traditions, companies)? Factories? Habits of peace and prosperity? Canals, education, social safety nets? Having a parent who can catch you if you fall? Geographical building tricks, corner mechanics shops, accountants who understand taxes? Maps that cover the location of mineral wealth, surveys of land, sewer sytems? Playhouses, dramatic traditions, habits of bringing up kids?

All of these things are real infrastructure. The West has been building it, at 3% per year, for 200 years. Most pieces of it stop being useful after 20 to 50 years -- but meanwhile, the next generation is leveraging that wealth to build for the next 20 to 50 to 100 years.

In Stratford, Ontario they are doing a 100 year infrastructure project. They are rebuilding the sewer system to survive 100 years of projected growth. They can do this, because people aren't starving, and they have the excess wealth to make such a project be a minor inconvinience.

Because they can afford to do this, sewer service for the next 100 years will be cheap, reliable and there. This means that a new house or factory or other economic building doesn't have to hire people to carry away the human wastes, fewer people die of sickness, and a million other small differences.

...

Now, lowering the wage in the west to the same level as developing nations would be extremely dangerous to the wealthy and powerful here. The gradiant of wealth correlates pretty damn strongly to the rate of crime, economic instability, and revolution. As a rich person, you want to live near people who are only a bit less rich than you.

A massive boost in the minimium wage elsewhere would cause acute starvation in many areas, and would be unenforceable.

01-21-2007, 10:55 AM	#23 (permalink)
Yakk Wehret Den Anfängen! Location: Ontario, Canada	So we have a few problems. First, there is a world-wide excess of unskilled labour. The supply of unskilled labour, world-wide, is enough to lower the value of unskilled labour below starvation wages. You can hire someone at starvation wages or better and train them a simple skill. The value of their skill sometimes makes them worth feeding above starvation wages. The interesting part is, most of the value of their labour is actually captured by regional stability and lack of government regulation, plus sufficient infrastructure to cheaply bootstrap an industrial farm. Regions that are both stable and have governments willing to kowtow to corperations are what the corps. look for and what makes paying the wages worthwhile. People they can get anywhere. Now, there are interesting demographic shifts going on. Rich people who have old age security tend to have fewer children, so areas that get rich tend to have their population go all pear shaped. This means the supply of labour in these rich areas shrinks -- hence the current immigration issues in the west and the wealthier areas of the middle east/asia. The end of the cold war caused both Russia and the USA to pull money out of funding random puppet dictators. This seems to be causing a downswing in warfare, and an upswing in the wealth of lots of areas. Africa, while still a basketcase, is starting to bootstrap itself up. More and more semi-Democracies (nearly every state in the world pretends to be a democracy) are actually starting to see power flow based on voting. If stability spreads, corps. will continue to look for stable areas with infrastructure (or enough to build more), cheap labour, and governments who are amienable. The real costs are probably the materials and the infrastructure, more than the labour. Some corps. will pay crap for labour, and some will pay more -- but the supply of the cheap labour won't determine the price for a long while. They'll pay based off of the economics of slavery, much like Henry Ford did. When you pay a worker more, they are more likely to stay around after they have gathered their skills. They are less likely to get sick. And, if you sell luxury goods the worker might want, you can usually recoup most of the costs. Starving a worker, unless skill is utterly useless in the job, is stupid. Each time a company does this, they build up the local infrastructure. New power, sewer, transportation lines are built. The local economy gets a small infusion of hard currency, which (ideally) is spent by other locals on both importing luxuries and buying the means of production and making money. Now, remember that the industrial West has been averaging 3% or so real growth for the last 200 to 300 years. 3% over 200 years grows the economy by a factor of 370 -- so don't expect an overnight miracle. Even if the area has economic growth at 10% per year, it would take 62 years to catch up to the West today assuming they start out where the west was 200 years ago, by which point the West would be 6 times wealthier than it is today. It would take 87 years to catch up completely with the West. See all those roads, buildings, wires, railroads, ports? Institutions (universities, government bureaus, traditions, companies)? Factories? Habits of peace and prosperity? Canals, education, social safety nets? Having a parent who can catch you if you fall? Geographical building tricks, corner mechanics shops, accountants who understand taxes? Maps that cover the location of mineral wealth, surveys of land, sewer sytems? Playhouses, dramatic traditions, habits of bringing up kids? All of these things are real infrastructure. The West has been building it, at 3% per year, for 200 years. Most pieces of it stop being useful after 20 to 50 years -- but meanwhile, the next generation is leveraging that wealth to build for the next 20 to 50 to 100 years. In Stratford, Ontario they are doing a 100 year infrastructure project. They are rebuilding the sewer system to survive 100 years of projected growth. They can do this, because people aren't starving, and they have the excess wealth to make such a project be a minor inconvinience. Because they can afford to do this, sewer service for the next 100 years will be cheap, reliable and there. This means that a new house or factory or other economic building doesn't have to hire people to carry away the human wastes, fewer people die of sickness, and a million other small differences. ... Now, lowering the wage in the west to the same level as developing nations would be extremely dangerous to the wealthy and powerful here. The gradiant of wealth correlates pretty damn strongly to the rate of crime, economic instability, and revolution. As a rich person, you want to live near people who are only a bit less rich than you. A massive boost in the minimium wage elsewhere would cause acute starvation in many areas, and would be unenforceable. __________________ Last edited by JHVH : 10-29-4004 BC at 09:00 PM. Reason: Time for a rest.