As Thomas PM Barnett reports in his post on the Financial Times reporting, the workers in China are revolting. Low wages worked for a while but now the Chinese want more. I can’t blame them. The problem with cheap labor is that it is seldom, if ever, cheap for long.

This is what bothers me about some states in the Southeastern US. With the high wages paid to auto workers in the Northern states, arguably because of labor unions, companies have moved south to cheaper labor. It is a good move by the companies because it allows them to produce products at lower costs thereby allowing them to either selling that product at lower prices and higher volumes, or have a larger profit margin. It works great for all concerned until cheaper labor is found somewhere else. That cheaper labor may be found in another state, or in Mexico. Once that happens, where does that leave the Southern auto workers? Easy answer, we only need to look north to see what happens.

Cheap labor may work for a while but, as we see in China, it is not sustainable. I can’t say that I am opposed to the auto companies, and other manufacturing companies, moving south, but I do hope that work continues to work on developing the high-tech R&D capabilities. That, as I see it, is the long-term solution to a sustainable economy.