Thomas Sowell

The tragic fact is that productivity is far lower in poor countries. That is the fundamental reason why they are poor in the first place. You cannot pay American wages to workers whose average productivity is a fraction of that of American workers, without driving up the cost of production to the point where businesses will take their jobs to some other country.

The real comparison is not between what people are paid in Third World countries compared to what people are paid in the United States. The comparison that affects outcomes is what Third World people are paid by multinational corporations compared to what they can earn otherwise. By and large, multinational corporations pay about double the local pay in Third World countries.

Third World workers line up for these jobs and even bribe insiders to get them such jobs. If economically illiterate Hollywood busybodies and other mindless crusaders succeed in establishing more costly pay scales without regard to productivity, that will undoubtedly lead to fewer jobs, just as similar policies do in other countries. There is no free lunch in the Third World, any more than there is elsewhere.

The net result will be people feeling good about themselves in Hollywood, in academia and in the media, while leaving havoc in their wake among the Third World people they claim to care about.

What the Third World needs are more multinational corporations, not less.

As more multinational corporations move into a poorer country, the people there not only get additional economic opportunities, they acquire skills and job experience that raise their productivity and earnings potential, even if that outrages the economically illiterate in Hollywood.


Thomas Sowell

Thomas Sowell is a senior fellow at the Hoover Institute and author of The Housing Boom and Bust.

Creators Syndicate