At the same time, in response to low-wage overseas competition, American manufacturers increasingly relied on temporary, lower-paid workers. One governmentestimates these workers now number over a million, half of whom – and one-third of all manufacturing production workers – “rely on food stamps or other federal assistance programs to make ends meet.” These numbers have likely only risen since the pandemic began, as a growing legion of unemployed Americans sought interim work.
How can the Germans get away with paying workers more? After all, they’re competing with the same Chinese manufacturers. Turns out, the Germans’ inflated wage scale may actually be part of their advantage. Helper and Martins make the case that manufacturing firms “with higher wages per employee have more skilled workers who also work more effectively.
3. These so-called “high road” firms tend to adopt other practices that “increase the return to having talented and dedicated workers.”
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