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Some Evidence on Competition in Labor Markets

Here’s the core of an e-mail that I received this morning from Cafe Hayek patron Kerry Welsh (with a link added).  I thank Kerry for his kind permission to share his e-mail here.

I am really enjoying your minimum wage articles.

FYI I spent over a decade making products in China, and there’s an anti-minimum wage lesson to be learned that I’ve never seen in any story.

China has over a billion workers, tremendous poverty and no trade unions, so if there’s one place on this planet you’d expect workers to earn minimum-wage it’s China.

Yet we had to pay 40% over minimum wage to attract even the lowest unskilled workers, such is the demand for labor.

And here’s the (wonderfully named!) product that Kerry’s company produced in China, and sold in the U.S. mostly through Wal-Mart and Costco.