There is a common misconception by U.S. companies that lower wage countries are less productive when in reality the opposite is true. The higher rate of unemployment in many low-wage Asian countries, as compared to the U.S. rate of unemployment, means that manufacturing companies can be more selective about who they choose to hire. The higher rate of unemployment leads to a genuinely lower turnover rate. Therefore, companies can spend more money on training and development in their Asian subsidiaries and production facilities. The end result is not just lower wages, but also higher productivity than in the U.S.
Written by Kelly Kasic, President of GLOBAL ID, LLC
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