Reply To: West rich because Third World poor?


Thanks for the answers. 
Dr. Herbener, you say that over time the wages in the two different countries (mentioned in your example) come together and there ceases to be an advantage in further arbitrage. Accordingly, Americans would receive the same salary here as a factory worker in Vietnam for the same job. Is that correct? 

I think a lot of Americans oppose outsourcing of production because they think they’d receive a higher wage than factory workers abroad, doing the same job. 

But if that’s not the case, then the outrage about outsourcing is completely wrong. I think Americans would not accept factory jobs at such a low salary. Moreover, minimum wage laws and other regulations prohibit such work conditions and the low wage. 
What are your thoughts about all that?

Or, are the wages  really that much lower in foreign countries for the exact same job? In that case, I can at least understand the opposition to outsourcing etc. 

At a recent discussion with friends, someone asked what would happen if the currently developing countries will be  developed one day and american companies will cease to outsource production (because as a consequence the price of labor increases in these countries). I see it like that: These countries can only prosper if they continue to increase production. Perhaps the cheap labor available now won’t be there in the future. However, this mass of workers with low wages will not be necessary. I imagine that it will be replaced by a smaller number of people (with a higher salary) who are far more efficient.  Hence, if these countries become rich, the world economy benefits. 
What do you think about that?