01 Jan 15
Originally posted by wolfgang59Australian skilled labor can command labor/accommodation/travel costs for the company 5 times that of unskilled local labor because they are more than 5 times as productive.
So what is the link between productivity and wages?
That's a very round figure, it depends on a lot of factors. If we could hire more locals at lower rates and get the same production we would do it, even if it meant bending rules.
Another example is a piece of one off prototype machinery recently developed. Manufactured in Korea even though it would have been cheaper to manufacture in China.
I concede that quality in both cases is a driving factor but then producing a quality product versus producing something of low quality is a factor of production is it not.