How Low Would Pay Go If Minimum Wage Law Were To Be Abolished Like The GOP Wants?

[pampango]

32. Actually the average manufacturing wage there is around $3.25 an hour now. It was under $1

an hour 10 years ago.

http://www.forbes.com/sites/timworstall/2012/10/29/the-revival-of-american-manufacturing-but-the-jobs-still-arent-coming-back/

This is happening just as other clusters of manufacturing – machinery, electrical products, transport equipment, furniture, etc – are “re-shoring” back from from China to the US. A 16% annual rise in Chinese wages over the last decade has changed the game.

It is true that this re-shoring is happening. But again there’s not all that much extra employment that is going to come from it. And the secret to that is in that Chinese wages number. Those wages have indeed risen by 16% a year for a decade: and two years ago we could have said by 14% since the millennium. But just 16% per year for a decade means they have risen over 4 times. Yes, really, Chinese manufacturing wages are over four times what they were only ten years ago. This is quite probably the fastest and largest rise in general wages in the history of our entire species. The thing is, such Chinese manufacturing wages are still only in the $6,000 to $7,000 a year range. Much better than they were but still nowhere near as high as those in the US.

Which is where our problem comes in for the US job count. Because China is also losing manufacturing jobs. No, not just those being re-shored. They’re losing many more than that. And they’re losing them to machines. Take Apple‘s fabricator, Foxconn, they’ve just over 1 million people working for them at present. And they’ve announced plans to install 1 million robots over the next three years. Even at a cost per worker of $6,000 a year it seems that it is cheaper to use a robot, a machine, than a person. And as we can all note, a US employee costs rather more than $6,000 a year in wages. So there most certainly won’t be a mass flood of jobs from China to the US. Just as there isn’t a massive expansion of jobs from those natural gas prices.

Simply because in most of manufacturing it is now cheaper to buy a machine than it is to hire a worker.