19th Century Economists observed that except under special circumstances
, an "Iron Law"
will direct market wages towards subsistence levels
. The 20th century saw a universal tendency of politically stable, developed countries to take steps to alter labor markets-including restriction of immigration.
We have hired mouthpieces
promoting slogans that "markets are global",
without any understanding what it would mean if that were really the case.
The BLS reports "Average wages and benefits
" in the US at $29.18 per hour-suggesting that most of the US GDP relates to US market wages. That has nothing to do with what 19th century economists were talking about-most of the earnings of labor they would see as either return on human capital
or broadly held forms of economic rent
||GDP(PPP)/Worker Thousand $
19th century economists lived in a world with little restriction on movement of labor beyond issues of language and endemic cultural prejudices. Until WW I, only Czarist Russia required a passport for entry. Workers in India and China live on less than $8.3K per year- because there is substantial return to the capital stock and land in those countries.
The workforces of China, India and even poorer countries are much larger than developed countries. At the average GDP per worker of India and China, the entire workforce of the US could be replaced for less than $1.286 Trillion or less than 9% of the US GDP if we assume no movement of prices from such a big transaction. That price wouldn`t replace workers with all important skills in the US-but it would replace all but the most highly skilled workers if we had true open borders, no trade barriers and a libertarian fantasy
that would permit supporting workers in the US at Chinese/Indian living standards.
As bad as post 1965 trends have been, there is still a long race to the bottom ahead for American workers.