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The Polish Economy and its future [101]
I think the future lies in Asia for the time being. Not anywhere in Europe or North America, for that matter.
For the time being, being the critical part of that statement.
I remember 15 years ago, when automotive production started moving to Mexico. Canada had enjoyed the benefits of having a lower cost base compared to the US, along with a trade agreement specifically related to Auto parts and production. When Mexico joined NAFTA, there was a giant sucking sound as all the factories picked up and moved south (both from Canada and the US). Only those with a specialty product or process, or niche market were able to survive, and there was an incredible pressure on pricing of products. Eventually, Mexican costs rose (as a result of improved standards - health and safety, environmental, labour laws etc) and narrowed the advantage of the Mexican product. Not satisfied with the level of profits being garnered from Mexican factories, that is when expanded international sourcing started to emerge. Products from around the world started showing up - Taiwan, China, etc. The rest is history. Factories where decent paying jobs once existed were shuttered, the people thrown out, and forced to accept less than they were making before at service industry jobs
"welcome to McDonalds, would you like fries with that?". Now they can't afford to buy the cars that they once produced. A country needs to have well paying jobs in order to grow their economy. Can people who live on a McDonalds wage really afford the SUV, the big screen TV and the monster home?
I am all for capitalism, it has certainly been beneficial to the masses over the last 90 years or so. But globalisation has it's cons, that need to be addressed.
