This page has been archived and commenting is disabled.

Visualizing Global Labor Cost Disparities

Tyler Durden's picture




 

In light of recent developments at FoxConn and elsewhere, some pundits have started fretting that labor costs around the world may be rising, further adding to an inflation-deflation schism between the developing and the developed world. However, as the following simplified chart from fixr.com demonstrates, there is very little to be afraid of in the foreseeable future. None of the BRICs is in any danger of catching up with the US in labor costs any time soon. Although, if deflationary pressures in the US persist, coupled with loose monetary and fiscal policy in the developed world, who knows...

 

Click the image to enlarge
The shocking disparities of labor cost
Source: Fixr
 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 06/18/2010 - 14:06 | 421650 Ragnarok
Ragnarok's picture

The sweat on the Indian is awesome.

Sat, 06/19/2010 - 01:29 | 422418 Oh regional Indian
Oh regional Indian's picture

Ragn, it is also very real. India, more than China, is Capitalism's EPIC FAIL!

Used to be a nice country, mired in the past a bit, but in this time, is that really such a bad thing?

Now, cultural hegemony, financial hegemony and it has really been laid waste.

When India explodes, as it will, the sub-surface pressures are GOM like (old old culture too, so evident), it is not going to be pretty at all.

Pimply high school grads get more than their dad's made at retirement to work dead-end call center jobs so they can take their 3 month salary receipt to the bank and buy a shiny and way too expensive and piece of crap motorcycle.

Newspaper delivery boys can buy 1000 dollar bikes.

Tomorrow is so yesterday, now, in the worst of what it represents is all that matters.

Bin dun bad!

ORI

http://aadivaahan.wordpress.com

Fri, 06/18/2010 - 14:31 | 421658 hedgeless_horseman
hedgeless_horseman's picture

Is this an advertisement for an assisted living retirement facility in India?

Good thing they got rid of that caste system that was keeping the masses down.

Fri, 06/18/2010 - 14:11 | 421660 EaseHisPain
EaseHisPain's picture

Awesome chart. Further reason why I wouldn't want to live in China or Russia

Fri, 06/18/2010 - 14:13 | 421664 ozziindaus
ozziindaus's picture

Unfortunately all of my outsourced CAD work to India has to be repeated 5 times just to be 1/2 wrong. 

Fri, 06/18/2010 - 14:43 | 421724 Double down
Double down's picture

So true

Fri, 06/18/2010 - 15:21 | 421792 Ripped Chunk
Ripped Chunk's picture

+1,000,000,000,000,000

But the arguments during the  "quality control" discussions are fun. Especially if you enjoy smashing furniture into junk.

Fri, 06/18/2010 - 20:56 | 422246 trav7777
trav7777's picture

I've been "fortunate" to work with some H1s here in the US; you *really* have to ride them and exercise a strong pimp hand to keep them on task, doing things right, and completing projects.

All this crap I hear about how "smart" indians are...well, it's just BS.  Management, OTOH, loves them because they're cheap, but what executive cares these days if they fuck the company over long-term because of poor projects and shoddy work?  Just get that cost control bonus in.

Fri, 06/18/2010 - 21:33 | 422278 Missing_Link
Missing_Link's picture

All this crap I hear about how "smart" indians are...

They're certainly clever when it comes to giving Americans a run for their money.  Especially American managers.

Fri, 06/18/2010 - 21:29 | 422275 puckles
puckles's picture

Let's do remember Bhopal, a Union Carbide Event (now Dow Chemical).  It occurred during teatime (high tea, of course, the equivalent of supper in the 19th century)...In that respect, nothing has really changed in India.  Oddly, some remnants of the Raj that are most pernicious for further development are those that are most cherished, including the horrid Indian Civil Service, rivaled in efficiency only by the French.  The latter, however, are rarely affected by bribery these days, unless it is on a massive scale (e.g., Giscard d'Estaing and the African diamonds).

Sat, 06/19/2010 - 04:18 | 422465 A Man without Q...
A Man without Qualities's picture

This is an excellent account of the Bhopal disaster, re your comment it occurred at teatime.

http://www.amazon.com/Five-Past-Midnight-Bhopal-Industrial/dp/0446690783.

 

 

Fri, 06/18/2010 - 14:16 | 421668 ZeroPower
ZeroPower's picture

Whats the min hourly wage in the USA? I realize it varies by State, but please educate me.

Here in QC its $9.5/hr but CAD average is around $9.75. Highest in ON at 10.25/hr.

Fri, 06/18/2010 - 14:22 | 421684 Ragnarok
Ragnarok's picture

It pains me when I go home to Canada and go out to the bar (not club), between taxes and the minimum wage it's like $5.75 CAD.  My bar tabs in Texas for a whole night can be less then $30 if you drink well spirits and Lonestar.

Fri, 06/18/2010 - 14:27 | 421700 ZeroPower
ZeroPower's picture

Wyoming 5.15? Wow..

Ragna: ya well all bars/clubs are a ripoff but pay for the 'atmosphere' i suppose. Worst prices in Toronto by far.

Fri, 06/18/2010 - 14:31 | 421709 Ragnarok
Ragnarok's picture

It a shame too, because all my Calgary buddies are some real alch-ees, but I guess they get paid more...

Fri, 06/18/2010 - 15:20 | 421791 cyclemadman
cyclemadman's picture

The minimum wage doesn't matter if everyone is making above that.  Heck, my daughter is working as a cashier at Wal-Mart and is being paid more than $10 an hour.

Fri, 06/18/2010 - 15:39 | 421841 dark pools of soros
dark pools of soros's picture

that's $10/hour avg with the $50 she makes in the backroom

Fri, 06/18/2010 - 15:50 | 421870 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

This but Wallmart has a life insurance policy on her.  Seriously.

Fri, 06/18/2010 - 14:44 | 421728 Clayton Bigsby
Clayton Bigsby's picture

well spirits and Lonestar?  how much for the hospital bill????

Fri, 06/18/2010 - 14:50 | 421737 Ragnarok
Ragnarok's picture

LOL. A bottle of Advil, iced tea the size of my face, clear schedule and history international cures all that ails.

Fri, 06/18/2010 - 14:19 | 421679 Quinvarius
Quinvarius's picture

I'm moving to India!  I will hire a staff when I get there to report back.

Fri, 06/18/2010 - 14:20 | 421681 Quinvarius
Quinvarius's picture

Actually, this kind of implies the dollar must devalue to .04 for the US to compete with India.

Fri, 06/18/2010 - 15:41 | 421844 dark pools of soros
dark pools of soros's picture

and of course they wouldn't cut wages faster right?  globalization is just a race back to slavery

Fri, 06/18/2010 - 14:43 | 421725 Clayton Bigsby
Clayton Bigsby's picture

is this at PPP, I wonder?

Fri, 06/18/2010 - 17:42 | 422076 ZeroPower
ZeroPower's picture

Doubt it. Everything (literally, everything) is much cheaper in the US than it is in Canada.

Especially now with our strong Loonie, were getting raped paying 1.10/litre of gas (thats $4USD the gallon!), cars are stickered at prices of the 0.7 CAD-USD rate. Food, consumer staples, everything much cheaper in the States. For those that live close to the border its worth it to drive down on an empty tank, fill up, buy your groceries, and save a bit of cash that way.

Fri, 06/18/2010 - 20:48 | 422238 ThreeTrees
ThreeTrees's picture

Prices are slow to adjust, but they do adjust. Certain hobby markets are a good example: parts for competitive karting adjust to exhange rates VERY quickly because they are readily available internationally and domestic businesses are forced to compete.

On a related note, Anyone who says globalization is a race to slavery is smoking some paralytic chronic. Don't you understand that the situation exists as it does today entirely because of currency intervention? Fiat money is a race to slavery, not market competition. This is basic economics. Contemporary balances of trade CANNOT be sustained without paper money.

Fri, 06/18/2010 - 15:03 | 421750 Mr Lennon Hendrix
Mr Lennon Hendrix's picture
Indians have it easy compared to some.  I will not discuss 'Mercans and Europeans. Gold For Bread - Zimbabwe:

http://www.youtube.com/watch?v=7ubJp6rmUYM

Fri, 06/18/2010 - 15:06 | 421758 Ragnarok
Ragnarok's picture

Indians get to have all the fun:

http://www.youtube.com/watch?v=x81iip6psks

Fri, 06/18/2010 - 15:24 | 421801 ozziindaus
ozziindaus's picture

Hilarious. We have some Indian expats still wearing tight flares and lamb chops. 

Snapple?

No, too fruity.

Fri, 06/18/2010 - 15:48 | 421864 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

You may find yourself, dancing ontop of a mountain.

http://www.youtube.com/watch?v=ZA1NoOOoaNw&feature=related

Fri, 06/18/2010 - 15:06 | 421759 cbaba
cbaba's picture

This is an excellent chart,

this is how the world will adjust to itself naturally in future and this labor numbers will balance reaching to  an equilibrium.

We will always suffer from monetary policies, budget deficits, future explosion of fiat currencies. The chart shows from top to bottom who is going to explode first.

If we are looking for a just world, which eventually we will come there in an unknown future time, we can only slow down the process, a labor for the same job should be close to each other in each countries. A labor can earn a 1 hr labor credit and will spend this credit anywhere in the world. This credit will be the future money. Rates will be different for different levels, skills of work but this will be the logic.

This is my dream, you can call me crazy; i don't mind.

 

Fri, 06/18/2010 - 15:42 | 421851 dark pools of soros
dark pools of soros's picture

"labor numbers will balance reaching to  an equilibrium" = $0 and change. . um i mean chains

Fri, 06/18/2010 - 18:19 | 422108 -Michelle-
-Michelle-'s picture

Until, of course, we meet up with the Ferengi...

Fri, 06/18/2010 - 20:17 | 422221 robobbob
robobbob's picture

and don't worry about carrying cash, all your credits will be on your linked to your implanted RFID chip, as will all your biometrics.

http://www.youtube.com/watch?v=_LVPf1-wRts&playnext_from=TL&videos=xY4GOQCkmXg

are you kidding me? the banksters are bad enough with marginal national political constraints. we still have the option of departing for greener pastures. I know many "third worlders" with that plan. Work a few decades in the "West", then retire home as kings. just wait until TPTB hold the reins of your one world utopia. Just think, the UN and their Goldman/JPM/InterAlpha/SoGen overlords can just link your credit account straight into their government bond/tax collection/carbon offset trading desk. Afterall, can't have all those credits sitting idle in a "personal" account can we?

 

Sat, 06/19/2010 - 09:56 | 422546 -Michelle-
-Michelle-'s picture

I know many "third worlders" with that plan. Work a few decades in the "West", then retire home as kings.

 

Shoot, I know many "first worlders" with that plan, especially close-to-retirement military with third-world wives.

Fri, 06/18/2010 - 15:13 | 421765 CharlesBronson
CharlesBronson's picture

Germany?

Mexico?

Italy?

Without Germany, well, its kinda useless....top exporter....

 

 

 

Fri, 06/18/2010 - 15:44 | 421856 dark pools of soros
dark pools of soros's picture

germany is probably close to france so it would of been redundant

Fri, 06/18/2010 - 15:27 | 421810 Rusty_Shackleford
Rusty_Shackleford's picture

Let's arb the spread.

Fri, 06/18/2010 - 19:21 | 422163 ZeroPower
ZeroPower's picture

aka... outsourcing

Fri, 06/18/2010 - 15:43 | 421852 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Oh and China is about to raise wages; their way of doing the Treasurie's bidding and lowering the value of the doelarr.  This to increase exports...of the doelarr.  The doelarr is the US' only export now.  That and bullcrap, we export mad bullcrap.

Fri, 06/18/2010 - 17:52 | 422090 Our Man in Havana
Our Man in Havana's picture

He should have added Cuba.  That would be 62 years and 8 months, working para Pesos Cubanos to earn the equivalent of one year of US minimum wage.  Since the United States is in the process of developing a Cuban-style economy, it would be appropriate to consider their wage scale as a reference for our future expectations in regards to dollar purchasing power.

Sat, 06/19/2010 - 01:44 | 422427 Oh regional Indian
Oh regional Indian's picture

I find the India dissing comments interesting.

On that note, the attitude towards "foreigners" in general is going to get a rude re-adjustment in the white world.

Interesting, walking Leicester Square in London one evening, a decade or so ago, some white boys, kicked a football too close to a group of Coloured folks, us blacks and browns.

Tough coloured guy picks up ball and growls at white boy and white boy grovels out a sorry and turns tail and runs.

All the tough talking anglo-saxons, walking tall on the shoulders of colonial fore-fathers get to pay the piper.

It is written and it will be. Cycles turn relentlessly.

On another note, having lived, worked and traveled extensively, I know this much for sure, no one has a lock on smartness. Different kinds of smarts, is all. Sure, an aborigine will have trouble programming, but watch him scout a trail, something we could not learn in a week, or 4 years at school or a lifetime even.

If you are better at something (say programming), it's because it's been around longer in your part of the world. Simple matter of familiarity.

The rest is more divide and rule, culture mish/mash/clash, pure cost arbitrage by decision makers, bowing to bigger decision masters.

If we don't begin re-adjusting our inner compasses for what is surely and obviously bearing down upon us, more than most of us are going to be left battered, bruised or dead.

That too is written.

ORI

http://aadivaahan.wordpress.com

Sat, 06/19/2010 - 09:35 | 422538 Absinthe Minded
Absinthe Minded's picture

I couldn't agree more. Smart is a relative term, many "smart people" would be much better off with common sense. I also find many of the smart people who complain about the "dumb" people do so only to feel better about their own inept selves. Knowledge attained is derived from the skills necessary to thrive in ones culture and environment. Life as we know it is about to change, whether it's for the bad or worse is a matter of opinion. But I do know having worked with people of many races, the ability to treat all with the same level of respect bridges many gaps. We are all humans.

Sat, 06/19/2010 - 11:31 | 422605 Oh regional Indian
Oh regional Indian's picture

Well said Absinthe.

And what I meant was exactly that by the inner compass comment.

We can be divided only if we let ourselves be divided.

The inner, unitary I knows no such thing as division.

ORI
http://aadivaahan.wordpress.com

Sat, 06/19/2010 - 12:11 | 422627 Cathartes Aura
Cathartes Aura's picture

On that note, the attitude towards "foreigners" in general is going to get a rude re-adjustment in the white world.

and not a moment too soon, eh? judging by some of the posts here. . .

the white western man's cultural imperialism is on its last leg down, feeding on itself now, not a pretty sight. . .

what makes it bittersweet is knowing that how some of you here view your "slave workers" is an echo to how the financial class feels about you, like so many replaceable parts. . .

Sat, 06/19/2010 - 12:29 | 422648 Oh regional Indian
Oh regional Indian's picture

Very True CA.

Hubris is blinding.

But anyone who understands that cycles are everywhere, since we do live in a fractal world, should be able to look in the mirror and take the blinders off.

Really hard though. Some have to have them ripped off.

ORI

http://aadivaahan.wordpress.com

Sat, 06/19/2010 - 09:05 | 422526 AnAnonymous
AnAnonymous's picture

Big mistake in the OP. Wages cannot fall in the US as people have to live in the US. And living in the US comes at a certain cost. Costs that is functional to the natural resources the US have been using to better and accomodate to human wants their environment.

 

What will happen is that certain activities will no longer take place in the US.

The US will not be able to subsidize all the low valued activities indefinitivel y.

Not because of a lack of USD but because of a lack of resources to maintain the business.

Sat, 06/19/2010 - 11:20 | 422592 Grand Supercycle
Grand Supercycle's picture

 

EURO bullish signals I warned of during the past few weeks - has resulted in the recent rally and the daily chart remains bullish.

The DOW/SP500 counter trend rally suggested on June 13 continues, however ...

http://stockmarket618.wordpress.com/about

Sun, 06/20/2010 - 09:52 | 423446 casey
casey's picture

We move back to a world of trade barriers and regulations to bring manufacturing jobs back to the west or we continue down this road of globalization and we'll all be in the graph with the poor Indian shovelling.

 

The BRIC nations are the way they are because they are corrupt and have allowed a system where the few take everything and the rest fight for crumbs.  We in the west have moved from egalitarian democracies and are quickly moving toward corrupt governments selling out to a few at the top.  Grab your shovel everyone.

Do NOT follow this link or you will be banned from the site!