Sunday, June 1, 2008
Near limitless labor supply
China has about 1.4 billion people. Every productivity gain puts millions out of work. If restaurants start using automated dishwashers, millions of people get put out of work. This means China will have lots of labor available for a long time. Of course, it also means labor will be very cheap and there is not much incentive to invest in labor saving devices. Plus what do you do with millions upon millions of unemployed people. Civil unrest results from people without jobs.
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