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Open Access Publications from the University of California

Theories of Labor and Industrial Location

  • Author(s): Egan, Edmund A.
  • et al.

In the past 20 years, the threat of competition from low-wage coun­ tries in the Third World has been a recurring theme in the discourse of American economic policy. After two decades of job losses in the key manufacturing sectors of the postwar economy, as we strive to under­ stand the new dynamics of metropolitan labor markets, regional forma­ tions and shifts, and try to plan for our economic future, many are quick to point to high American wages with a kind of fatalism.

Notwithstanding the fact that most of the real competitive ground has been lost to other developed countries, it is the recurring image of a Korean or Mexican worker, willing to work for a fraction of Ameri­ can wages, which continues to haunt debates in a number of fields: trade policy, where opposition to the North American Free Trade Agreement (NAFTA) is precipitated by a desire to protect higher-wage American workers; education policy, where a workforce prepared for the "high-tech jobs of the future• is widely seen as an imperative even before these jobs exist en masse; social policy, where excessive taxa­ tion and regulation, producing an •unfriendly business climate: can ostensibly drive industries to the far corners of the Earth.

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