An excellent point.Baron Von PWN wrote:
Know what really made western wages fall? Winning the cold war. pre- 1989 about a third of the world was completely locked away from capitalist markets, more were partially locked out of capitalist markets due to cold war rivalries making the Soviet Union seem a reasonable alternative capitalism. Following 89 there is gradually movement on a global scale to more open markets and capitalism .
Old capitalist markets previously insulated from all that cheap labor by the cold war now have to adapt, the change is gradual since it takes time for these newly open economies to transition but eventually they get into the market, and suddenly paying someone 18$ to do something a guy in china will do for 2 or less $s an hour doesn't make sense anymore.
Things tend to equalize and overall the freer trade has resulted in higher growth from gains in trade, so it's mistaken to say that the global economy is currently balancing out. It's been growing because overall wealth has been growing. Nevertheless, wages in saturated markets would fall in certain sectors. The labor over time does shift to more highly valued uses, so other sectors grow.Baron Von PWN wrote:The Global economy is currently balancing itself out. Think of the Cold war as the communist building a massive damn against western capital, what is happening in the global economy right now is the aftermath of that damn breaching, capital is flowing out of the western basin into the former communist world. Eventually things will equalize and wages in the west will become comparable to those in the east, however this will occur by necessity after a drop in the west and a rise in the east.
So, the West is kind of experiencing this shift in wages, leading to an overall decrease in pre-1989 open-to-trade countries; however, the global economy isn't necessarily balancing... a majority of certain sectors within all those countries are shifting, that's for sure.




