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Inflation rose 3.1 per cent in the year to March but salaries climbed just 2.4 per cent, according to the Employment Cost Index. In the final three months of 2004, real wages fell by 0.9 per cent.

   

I suppose one of the culprits in the US, which is where this article is from, is the above average gas and heating prices. Oddly this article makes no reference to any reason for the difference.......sounds like an agenda article to me.

   

Balance of power shifts to the employers

Offshoring or 'globalisation' has been the cause of the decline. This article was a part of the former under 'A surfeit of workers and the threat of off-shoring are allowing companies to call the shots on wages.' So while there has been clearly job losses from globalisation there has also been a more profound degrade in the wages of those who manage to keep their jobs. Meager pay raises vs a steady climb in interest rates has dropped the average weekly wage. That is not opinion, thats the cold reality.

This is not something to be blamed on Unions either.

Clearly the worker is getting the shaft.

   

You keep quoting US sources...........what's your point?

   

Deep integration. We sleep too close to the elephant not to be adversely affected by this. Our wages are on the same slope because we are subscribing to the same policies of globalization and outsourcing.

   

Unless you can come up with a direct correlation between the two, you're just generalizing. You've provided nothing other than opinion in the linking of the two.

   

That is an astute observation. Perhaps your could elaborate with a counter point as to why the real wage has dropped 0.9% in 3 months if not for outsourcing and thus all a part of a larger mosaic of globalization? I would gladly entertain your suggestions. I have come to the conclusion that the hemorrhaging of the real wage can only be from the broken boarders and bizarre trade pacts that we have sign on to.

   

I am more inclined to believe that companies are driven to improve the bottom line, and with any given work force the item that invariably comes up as a target under the column of fixed costs is "net salaries and wages".

Driven by ourselves (the investors) that demand double digit returns on our investments, North American coroporations are starving for opportunity to increase margins.

Outsourcing to other countries is possible is some industries, but I do not consider these to be the majority...perhaps I am wrong.

Corporate necessity to meet increasingly ridiculous quarterly profit growth in order to satisfy the investor (that would be us) is driving this trend imho. It is to a point now where if you increase revenue 15% over last years quarterly results your stock will tank because analysts expected 20%.

Part of this results in international outsourcing, but I believe the majority is simply reduction of the most "controllable" line item in the budget. "Do more with less" is one of the most common buzzwords in the corporate world today.

My views are more in line with this article....

cheers
m

   

There is a distinct difference between a free market economy and globalization. Under globalization there will be the few extremely strong feeding on the many extremely weak. They will constantly be working on the fringe and will be eaten up by the companies who can use unfair trade practices.

Operating at a loss in one market to undermine a competitor who is restricted to that market or country while supplementing the losses from other operations running in other countries is an example. Once the waiting out game plays out and the domestic industry is 'staved' out of its own market the multinational moves in and jacks the prices while paying slave wages.

This is an oversimplification of the overall process but it cuts to the quick. Such amoral behavior by multinational globalists will sell out to anything and anyone for a buck. Case in point China. They will easily support the butchers of Tienanmen over domestic production in a heart beat if it means increased market share.

I am not in favor of protectionism or tariffs in a free market but when it is unfair trade practices that are undermining the social fabric there comes a time when there should be a greed tax on these companies and it should be right at the source, the shareholder.

   

Scape - although interesting, I don't find your post speaks to the topic of wage decline in North America.

m

   

Globalizations chief component is the eradication of the boarder and the induction of cheap labour from markets that do not have a social safety net. Example Mexico, China or India.

Global: Politicization of the Trade Cycle

   

Scape you're trying to connect the dots with generalizations. You're either for protectionism or you're not. Which is it? Also don't the people in those other countries you mentioned deserve jobs as well? Maybe you should ask them if they like working at the expense of rich North Americans.

   

Like the article said: It’s hard to argue with the theoretical benefits of globalization. However, we have to take a sober look at what is going on and where we are headed. From 1970 to today the manufacturing base in the US of A and in fact all western countries has dropped in half. These jobs are the heart of any countries economy for with out the high pay and benefits we can't afford the lifestyle which we have so richly have become accustomed to. Like having a car but not being able to afford the gas it's not going to do us any good if we can't maintain our rich society is it?

I am for protecting our society that has education, health care and an army to defend it vs a society that simply exists to produce. We need to get off the bandwagon that China has us on or we will end up subsidizing their growing middle class with our hard fought for social fabric that took us decades to put in place and maintain.

I would be against protectionism with like minded countries or trading blocs, IE trade with the UK should not be subject to a greed tariff as they have a social safety net.

The people in China have every right to a better life but not at our collective expense, we have sacrificed far too much to have it sold from underneath us in under a generation.

   

China is just one country. What about the other two you mentioned? They aren't worthy of jobs.

   

To be fair to countries that are developing such as Mexico, India or Russia there could be degrees of a tariff to be sure. I do not believe that labour working in Mexico under a corrupt regime should be on par with an auto maker in Ontario.

Example GM and FORD are now Junk bonds, why? Spiraling costs for benefits and health care for workers. Should we 'reward' off shoring in this case because they want to bail on their own responsibilities?

The trouble we have with China and the like is not necessarily all Chinas fault. In fact they are just playing along the game that the west has set out before them.

They didn't spend more than they produce, drop personal saving rate to nearly zero or swing the federal government’s budget from surplus to deficit measured in the trillions. The US is going to tank at the rate of $2 Billion a day in red ink. Doesn't it stand to reason we should be circling the wagons a little at this point?

   

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