The wave to capitalism by developing nations beginning in the 1960s created a great competitive disconnect with developed nations. Beginning with Japan in the 1950s and on to China, India, Brazil, Mexico and more the change in cost of labor and capital for advanced economic nations to produce goods changed dramatically. A 20 times decrease of labor costs changed the competitive advantages with sudden and dramatic affect.
The result of this change is that labor in developed nations lost their bargaining power. This loss of labor's power has resulted in a shift of wealth to management and away from labor. Labor has not received a real raise in income for decades. Without a raise the vast majority of American middle class has stagnated reducing their buying power resulting in economic stagnation. This stagnation will continue until real increases in wealth are realized by the middle class. The stagnation is off-sett somewhat by the increases in wealth by labor in developing nations which increases their purchasing power. American and all developed nations must increase competition in developing nations to maintain economic growth.
Jerry
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