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General, innovation

Fixing Britain’s Economic Woes 2


Economic theory suggests an excessive minimum ...

Economic theory suggests an excessive minimum wage may raise unemployment as it fixes a price above demand for labour, although a reasonable minimum wage enhances growth because when poorer workers have more to spend it stimulates effective aggregate demand for goods and services. (Photo credit: Wikipedia)

Further to my earlier posts here and here, it was a breath of fresh air to watch the BBC 2‘s TV show , The Town Taking on China,  reviewed somewhat unfairly on the telegraph here. I’m not in the least bit impressed by the efforts of this single cushion factory. Not really, and its not because their efforts are not commendable. Truly and sincerely, efforts such as these are worthy of praise and much support, and are a good example of the enduring spirit and innovation of British industry.

Its just that it is meagre compared to what would realistically be required to get Britain making such commodities on an industrial scale again. In any case, during the series, someone correctly observed that China has no minimum wage or labour laws, and that gives them a significant advantage over everyone who has. Which is why, while I wholeheartedly support ideas such as that of Hiut Denim, that has begun manufacturing jeans(briefly putting aisde the £230! price tag :-|)  in the small Town of Cardigan, in Wales, something more ought to be done, if Britain is to reduce its unemployment and revive its manufacturing sector.

For example, its not beyond imagination, for retailers who buy in wholesale from such companies (Hiut Denim, Caldeira Retail Ltd, etc ) to be provided with incentives for doing so. The point is, if Asia has one over you as a result of a complex number of factors (including the absence of the minimum wage mentioned above) , its obvious to diversify your own industry and use other suitable measures to encourage your own industry. I know British Industry (including retail) relies heavily on Asia, and wouldn’t for once advocate an immediate switch. Instead, to put it in a different way, if China somehow dissappeared overnight, many western economies would be thrown into instant chaos. Disrupted by events occuring thousands of miles from their borders.

That couldn’t possibly be a good thing.

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Discussion

One thought on “Fixing Britain’s Economic Woes 2

  1. Those who say the tipped minimum wage is due for an increase argue that the growing restaurant industry can withstand it. Throughout the fits and starts of the economic recovery, the restaurant sector, much like retail, has served as one of the few reliable bright spots when job numbers are issued.

    Posted by mercadeo internet | June 10, 2012, 5:35 am

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