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I am an old man. I read this thread carefully and it is clear to me that few of the commentators have a clear understanding of how wealth is Created by Economic Development. Some observations:
In '76 I joined the SA subsidiary of a USA company in Marketing. On my first trip to the USA I booked my Sunday trip from NY to Chicago via Los Angeles as I wanted to get a Top Picture of the USA. I got a window seat and for hour upon hour I saw actively used farmland passing below, interspersed with villages, small towns and industrialized cities. My neighbor on one of these legs, an American and I started talking and I said that I am amazed at the economic development I saw in the USA.
He claimed that this development was largely due to only two words - “You're Fired” -. According to him this phrase works in both directions. If you are a good worker and the boss pays you too little you can fire the company and find better work elsewhere. If you are not good enough the company fires you and no employer wastes money correcting your errors. Pretty soon employers learn to pay you what you are worth and good employees learn to be good enough to earn well. After a few firings even poor workers learn to bite the bullet and do a good job.
This creates jobs like no other (Go Research Unemployment in the USA compared to anywhere else. Just remember to also compare average wages as well) and pretty soon Emplyees become a scarce commodity and employers have to find ways and means to afford the productively. Refer this article from The New York Times of August 29, 2007 by Keith Bradsher on Chinese Wages [URL="http://www.nytimes.com/2007/08/29/business/worldbusiness/29labor.html?n=Top/Reference/Times%20Topics/People/B/Bradsher,%20Keith&_r=1&"] In this article Bradsher, discussed Chinese wages and told the story of Mr Zhang whose “wages” for a 45 hour week had increased between February and August 2007 by 34%. However if one reads a bit deeper you find that Mr Zhang's basic “wage” really only increased by 10%. He was paid per piece produced and although his pay per piece produced was increased by 10%. He figured out and applied productivity increasing methods that enabled him to increase his output in units by about 25%, resulting in a 34% increase in total income while working the same 45 hour week.
Many South African workers lost their jobs because of cheaper Chinese products produced in this manner. Is this perhaps the difference? I have sat at Wage Negotiating tables with a COSATU Union many times. From this experience I cannot even imagine trying to negotiate a piecework wage deal successfully. I would like to quote two sentences from this article:
“For decades, many labor economists said that China's vast population would supply a nearly bottomless pool of workers.”
And
“But factory owners and experts who monitor the nation's labor market, say that businesses are [now] having a hard time finding able-bodied workers and are having to pay the workers they can find, more money.”
What a change. This change is the result of economic development based on using one's Strengths. Namely Low cost wages of large unemployed population leads to the exporting of unemployment. Greater domestic employment leads to larger domestic markets through internal market growth and higher wages due to greater learned productivity and labor scarcity. See this video of a Chinese invented productivity gain in T Shirt Folding http://www.youtube.com/watch?v=3MtIqopmEFM as an example.
As long as our legislation allows Communist inspired Trade Unions to dominate the labour scene - FEW JOBS WILL BE CREATED and our economy will be difficult.
I have been researching a book on Why Africa is so Poor. If you would like a read of my present draft in .pdf form let me know at pieter.d.rossouw@gmail.com
In '76 I joined the SA subsidiary of a USA company in Marketing. On my first trip to the USA I booked my Sunday trip from NY to Chicago via Los Angeles as I wanted to get a Top Picture of the USA. I got a window seat and for hour upon hour I saw actively used farmland passing below, interspersed with villages, small towns and industrialized cities. My neighbor on one of these legs, an American and I started talking and I said that I am amazed at the economic development I saw in the USA.
He claimed that this development was largely due to only two words - “You're Fired” -. According to him this phrase works in both directions. If you are a good worker and the boss pays you too little you can fire the company and find better work elsewhere. If you are not good enough the company fires you and no employer wastes money correcting your errors. Pretty soon employers learn to pay you what you are worth and good employees learn to be good enough to earn well. After a few firings even poor workers learn to bite the bullet and do a good job.
This creates jobs like no other (Go Research Unemployment in the USA compared to anywhere else. Just remember to also compare average wages as well) and pretty soon Emplyees become a scarce commodity and employers have to find ways and means to afford the productively. Refer this article from The New York Times of August 29, 2007 by Keith Bradsher on Chinese Wages [URL="http://www.nytimes.com/2007/08/29/business/worldbusiness/29labor.html?n=Top/Reference/Times%20Topics/People/B/Bradsher,%20Keith&_r=1&"] In this article Bradsher, discussed Chinese wages and told the story of Mr Zhang whose “wages” for a 45 hour week had increased between February and August 2007 by 34%. However if one reads a bit deeper you find that Mr Zhang's basic “wage” really only increased by 10%. He was paid per piece produced and although his pay per piece produced was increased by 10%. He figured out and applied productivity increasing methods that enabled him to increase his output in units by about 25%, resulting in a 34% increase in total income while working the same 45 hour week.
Many South African workers lost their jobs because of cheaper Chinese products produced in this manner. Is this perhaps the difference? I have sat at Wage Negotiating tables with a COSATU Union many times. From this experience I cannot even imagine trying to negotiate a piecework wage deal successfully. I would like to quote two sentences from this article:
“For decades, many labor economists said that China's vast population would supply a nearly bottomless pool of workers.”
And
“But factory owners and experts who monitor the nation's labor market, say that businesses are [now] having a hard time finding able-bodied workers and are having to pay the workers they can find, more money.”
What a change. This change is the result of economic development based on using one's Strengths. Namely Low cost wages of large unemployed population leads to the exporting of unemployment. Greater domestic employment leads to larger domestic markets through internal market growth and higher wages due to greater learned productivity and labor scarcity. See this video of a Chinese invented productivity gain in T Shirt Folding http://www.youtube.com/watch?v=3MtIqopmEFM as an example.
As long as our legislation allows Communist inspired Trade Unions to dominate the labour scene - FEW JOBS WILL BE CREATED and our economy will be difficult.
I have been researching a book on Why Africa is so Poor. If you would like a read of my present draft in .pdf form let me know at pieter.d.rossouw@gmail.com
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