Paul Krugman on cheap labour...

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The trendy left's favourite economist has this to say about cheap labour:

These improvements have not taken place because well-meaning people in the West have done anything to help–foreign aid, never large, has lately shrunk to virtually nothing. Nor is it the result of the benign policies of national governments, which are as callous and corrupt as ever. It is the indirect and unintended result of the actions of soulless multinationals and rapacious local entrepreneurs, whose only concern was to take advantage of the profit opportunities offered by cheap labor. It is not an edifying spectacle; but no matter how base the motives of those involved, the result has been to move hundreds of millions of people from abject poverty to something still awful but nonetheless significantly better.

This is absolutely right. Capitalism - neoliberalism if you prefer - is what gets us out of poverty and keeps us out of poverty.

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Manufacturing - no longer the place for cheap labour...

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And this is a good thing because cheap labour isn't just cheap it's dirty, unsafe and unpleasant - replacing the drudge with robots is a good thing:

Some might say that’s terrible: what are we going to do when there’s no more cheap labour? I look at it the other way around. When there’s no more cheap labour then there’re no more poor people, are there? For by definition people who are getting good wages just aren’t poor. So once we’ve run out of places where we can chase that cheap labour then we’ve actually solved one of humanity’s longest running problems. How in heck do we cure poverty? And we’ll have done it by the only logically sound method known: making everyone rich. Hurrah!

There will still be manufacturing jobs but they will look rather different - as I noted a while back:

I visited a manufacturer the other day. Part of a multi-national business in the electronics industry. Big plant in Chadderton employing about 360 people.

Of those 360 people, 54 have PhDs and over 70% have a degree of some sort.

Rather makes the point that, even if we have a boom in manufacturing, it is't going to provide jobs for 16 year olds who have scraped five GCSEs.

Manufacturing soon becomes a high skill, high value added business filled with society's elite - all graduates, many with higher degrees and all creating, thinking and developing the business.

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