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Negative-Productivity Administration Officials

Here’s a letter to the Wall Street Journal:


Walter Russsell Mead rightly criticizes the Biden administration’s scheme to restructure America’s economy in the image of those who are nostalgic for the 1950s (“‘Progressives’ Want to Go Back to the 1950s,” May 2). This scheme is rooted in ignorance of basic economic realities, not the least of which is that, despite its many problems, the U.S. economy today generates real per-capita income at an all-time high. Today it’s 236 percent greater than its peak (in the second quarter of 1959) in the 1950s, and 30 percent greater than it was in 2001, the year China joined the WTO.

The administration further errs by falling for the protectionist canard that foreign-workers’ low wages give them an advantage over American workers. But low-wage foreign workers are paid low wages because, having less and worse capital to assist them than do American workers, these foreign workers are less productive than are American workers. In China, for example, the average hourly productivity of a worker is a paltry 19 percent of that of the average American worker. If we more accurately called low-wage foreign workers “low-productivity foreign workers” – and called high-wage American workers “high-productivity American workers” – everyone would immediately see the absurdity of asserting that low-productivity foreign workers have an advantage over high-productivity American workers.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

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