Why Journalists should learn Economics
The ignoramus in Rajinder Puri states,
'Consider how America got into its present mess. To keep the economy buoyant it was necessary to keep up demand. To do that, wages and purchasing power also had to keep pace. Higher wages meant lower profits. To maximize profits business corporations utilized globalisation to invest in cheap labour outside the US . The obvious giant sweat shop for cheap labour was China . Violating all labour norms, ignoring minimum wage norms, the US big business and China got into a mutually beneficial arrangement. The virtual slave labour in China manufactured goods for western business firms at a fraction of the cost which would have occurred through manufacture in the US itself.'
Violating all labour norms? Ignoring minimum wage norms?
The problem with journalists is they can't and don't comprehend Economic laws. They've no idea about supply and demand and how that drives prices. Instead of being thankful at the fact that these jobs have come to developing countries, Rajinder takes the high moral ground. The last I checked, having a job that pays something is better than not having one at all. Or will Rajinder then tell me its better to starve than to earn what he calls a pittance?
To understand why norms set for minimum wages hurt those very people it intends to protect, listen to Milton Friedman talk about Minimum wage, Maximum folly and Minimum jobs (video above) here.
Also watch John Stossel's take (video) on minimum wage here.
Rajinder Puri with his ignorant rhetoric joins the likes of Barack Obama. Read my take on Barack and his 'shipping jobs overseas' comment here.
Video Source: Via Carpe Diem