American Wages and Foreign Competetion

American Wages and the Foreign Competition.
By T.S. Khanna

It has been a tradition in the US economy for the unions to increase their wages free of competition and regardless of the effect on the overall economy. Since the early twentieth century, the US had been foremost in industrial development free of foreign competition and could sustain such increases.

Now the foreign competition is getting to be stiff and real. The traditional approach to wage increase spiral has been inflationary, more like chasing a mirage to quench thirst.

United Auto Worker’s recent strike against General Motors, Chrysler Corporation, or Nurses strike against hospitals must not be viewed merely as a dispute between the “poor workers” and the greedy corporations. The US wages are already way too high to compete in the world market. Each time the wages or benefits are increased through strike, the US economy falls behind that much more in competition.

Now it seems imperative that the wages in the US economy be adjusted and enforced to be consistent with the public interest in economic growth, monetary stability, and foreign competition.

Outsourcing of jobs cannot be blamed on the President, or NAFTA; the unions must take the blame. By ignoring the wage adjustment, the US economy will become like third world economies with poorly paying service jobs only. The very unions now forcing wage increases will be seeking those jobs with a greatly depreciated dollar value.

The President and the Congress must examine the matter on high priority.