On: Wage Stagnation

[gregwtmtno]

Those are points I hadn't considered, but what in the US, net exports are negative. Wouldn't that imply the converse effect to what you're describing?

[deogeo → gregwtmtno]

It wouldn't. Say someone in the US buys something made in China - how does that increase demand for labor in the US? There's some marginal US labor required for the last part of the transport, but that's it.

[ultraluminous → deogeo]

Thee last part of the transport is not marginal in the real world. Increased local consumption drives transport, retail, marketing, etc. etc. Real life economic modeling is not a simple supply/demand, widgets made/sold chart.

[ebog → deogeo]

The person pays for the good in US dollars. Where do those dollars go? The Chinese people who now have USD either spend or invest them back in the US.

[raincom → ebog]

Most of the dollars go as profit for the multi nationals. The remaining (very minimal) goes to the contract manufacturers.

[pas → deogeo]

Though thanks to the bigger market the prices can actually decrease, so living standards could increase, even if wages haven't.

[thfuran → pas]

Only if they wouldn't have bought it if they hadn't moved to the US.