America_s wages out of balance

America_s wages out of balance - Breakingviews.com -...

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This copy is for your personal, noncommercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers here or use the "Reprints" tool that appears next to any article. Visit www.nytreprints.com for samples and additional information. Order a reprint of this article now. November 11, 2009 BREAKINGVIEWS.COM By EDWARD HADAS, MARTIN HUTCHINSON and ANTONY CURRIE American workers are overpaid, relative to equally productive employees elsewhere doing the same work. If the global economy is to get into balance, that gap must close. Of course, workers in the United States should earn more than their peers in China, Moldova or Vietnam. Americans take advantage of the higher productivity that makes their country rich: better education and infrastructure, abundant capital and a strong work ethic. But how much higher should American wages be? The answer depends in large part on two measures: the difference in productivity in making goods that can be traded across borders, and the quantity of such goods. Both measures point to a narrowing wage gap.
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