Letters after your name

[Chuck(G)]

Didn't they try this in the UK once before? (sun never sets and all that rot... )

Yeah, but it can be a very mixed bag. I almost accepted a job offer back in the 70's to work in Tehran.

[ThomasDodd]

...and let's see--if someone in Duluth is paid exactly as much as the same person in Mumbai, who's going to have a higher standard of living?

Not sure about higher, just different. Again, that once the overall standard has risen.

The money I make here in MS would go a lot further in the small TN town I grew up in. And it'd be quite low in CA or a city like Dallas, New Yor, or D.C.

But, while I have access to a lot that I didn't have in TN, the city would offer even more. Like here there are a few good resturants, and a decnt movie theater, neither of which were within 90 minutes back in TN. But I still need to travel to find a symphony, art gallery, or 5 start meal.

[Joe Baker]

Until Mubai catches up with Duluth. It will take a long time becaues of the population density, but in 75-100 years I expect India, Taiwan, and S. Korea to have about the same real wages as the U.S. Technology makes it easier for employies to be located in seprate locations. Now that is little difference in me working with someone in CA, NH, London, or India. The only issue is time differentials. Those can be worked around.

...and let's see--if someone in Duluth is paid exactly as much as the same person in Mumbai, who's going to have a higher standard of living?

Let's see--the winters in Duluth are brutal--Mumbai has no winter in the sense that we think of it. India has a fairly well-developed public transportation system, where the US does not. The growing season in Duluth is perhaps about one-half at best of the gowing season around Mumbai, so food's quite a bit more expensive. In short, if you live in Mumbai, you will enjoy a much higher standard of living on the same wage than if you live in Duluth. It cannot be otherwise, no matter how the forces of globalization operate.

Because it's cheaper to live in Mumbai, Duluth will simply be placed out of the competition and Mumbai will continue the downward pressure on wages by competing with the likes of Hanoi....

Remember, cost/desirability of living will ALSO normalize in the long run, providing a much wider variety of tradeoffs between comfort, beauty, safety and price; but market forces will prevent any one place from being objectively superior in all four metrics. Some people will choose, for reasons of their own, to live in more expensive places; others will choose less expensive places -- just as they do now in the US. I don't know where the least expensive place to live in the U.S. is, but someplace must have that distinction. So why don't we all flock to that place? Why do millions still live in NY City, LA, Chicago, Boston -- places that are MUCH more expensive, and (to MY tastes anyway) not nearly as nice as most small country towns? Because there's something there they want more than they want a low cost of living. For reasons of family heritage, community, culture, etc., people will continue to live and work in Duluth, too -- even if a "higher standard of living" could be bought with the same paycheck elsewhere.
___________________________________
Joe Baker, who had to look up "Mumbai" to learn that it is the post-imperial spelling of "Bombay".

[Chuck(G)]

[But, while I have access to a lot that I didn't have in TN, the city would offer even more. Like here there are a few good resturants, and a decnt movie theater, neither of which were within 90 minutes back in TN. But I still need to travel to find a symphony, art gallery, or 5 start meal.

Boy, this one's going OT and perilously close to politics.

But in a global ecomony, the race is to the bottom--produce your product for the lowest possible cost because (at least in theory) everyone in world is a potential competitor. That's why Perdue sets up their chicken-plucking plants in rural South Carolina and not in the Hamptons. They can pay less and their fixed costs are lower. If they could set up a viable operation in Guatemala, I'm sure they would.

The biggest danger of this is not loss of employment, but rather capital flight. Investment goes where it makes money. Right now, we're seeing a bunch of money that might otherwise have gone toward a domestic startup instead heading to East Asia because the market potential is bigger.

[ThomasDodd]

Boy, this one's going OT and perilously close to politics.

Well, we do have a habbit of that don't we. (we being about 10-15 members with lot's of posts)

The biggest danger of this is not loss of employment, but rather capital flight. Investment goes where it makes money. Right now, we're seeing a bunch of money that might otherwise have gone toward a domestic startup instead heading to East Asia because the market potential is bigger.

Bringing it back on topc, a bit.

The people making those decisions tend to have(and use) lots of letters after their name, and little (no?) experience with a startup, or plucking chickens.

[Lew]

I can hire an Indian programmer in Chennai to do for $20/hr, what I have to pay a US based person $80/hr to do.

But you're really spending $100/hr or more toemploy that person in the States. His pay check might say $80/hr, then add what you spend on benifits and employment taxes (FICA, unemployment). ...

To be clear I was comparing a consultant/contractor in the US vs. one in India. My average technical empoyee is paid around $40/hr, plus bonuses, benefits, and other costs that probably bring the real cost to around the same $80/hr.