ACCUMULATING PERIPHERALS


Why US industry can compete with East Asia by mattsteinglass
June 14, 2010, 3:14 am
Filed under: China, Economics, US, Vietnam

Infrasnargle

I saw this guy Sunday afternoon risking his life while attempting a routine maintenance task in our neighborhood here in Hanoi, and it reminded me of why US industry still remains potentially competitive in many sectors with industry in East Asian emerging markets. Things here are simply much, much less efficient. The country has extremely pressing infrastructure needs to fulfill just to ensure it won’t have continuing blackouts knocking out power to factories, traffic jams that prevent goods from getting to port, sewers that don’t flood streets with excrement every rainy season, and so on. And of course the incredible tangle of wires that is the residential power, phone, and internet system, which I hereby dub the Infrasnargle.

All of these contribute to the fact that Vietnamese workers are vastly less productive than American ones. PPP-adjusted output per worker in the Vietnamese manufacturing sector in 2008 was $8100. For Chinese workers, it was $22,000. For American workers, it just passed $300,000 this year. (I’m not really clear on why we’re using PPP-adjusted figures here; for purposes of comparing competitiveness in exports, the flat dollar value seems more appropriate. But regardless, it’s clear that workers in the US economy can produce vastly more value per hour.)

That said, Vietnam is frantically investing in infrastructure improvements, and if we want to keep American workers competitive, we need to do the same.


1 Comment so far
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Incidentally, I think this photo also suggests why organized labor isn’t the handicap folks would like it to be. Workplace safety rules can be an advantage.

Comment by citifieddoug




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