Hence, the amount of money available to spend on what workers’ families consume is not increasing. How then are businesses doing so well? To a great extent, they are saving money by utilizing low labor costs overseas, using robotic technology in their plants here and selling a significant part of their products to consumers other than American workers.
Meanwhile, the real pay of American workers continues to spiral downward until it will stabilize at the pay level of Asian workers, which is simultaneously spiraling upward. This is not a pleasant prospect for neither the workers involved nor the entire American economy. Without consumer spending, it cannot recover.
World Wide Youth Unemployment
Early Retirement on the Beach
The latest headlines indicate that the North and South Koreans, after a few months of North Korean bellicosity, are talking again about reopening the Kaesong Industrial Complex, where South Korean manufacturers, headed by Hyundai which manages the place, utilize dirt-cheap North Korean labor to aid in the manufacture of South Korean goods. See my earlier postings on this topic. I anticipate Kaesong will be back in business, once again undercutting Chinese labor costs, within a few months.