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Countries with the Most Economic and Political Freedom Tend to Have the Highest Cost Labor. Do You Know Why? Lex Loeb Contributor Network . America has had higher labor costs for most of it's history . In talking about America I mean The US and Canada and not Mexico so much because it's labor costs have usually not kept up with the rest of North America. The cause of labor being inherently less expensive in Mexico is not necessarily in any way related to over growth in population but is related to class stratification of basic citizenship in their own country. The US and Mexico had periods when labor was so expensive slave plantations seemed to be one solution to having adequate labor for production purposes. Slavery passed from the scene in both countries and some blame the slave like conditions for labor in parts of Mexico that remain there to unfair land distribution/ redistribution, poverty and lack of education. Those may not actually have anything to do with the real reason. The real reason maybe that most people in the lower economic levels of Mexican society don't have the freedom of economic and political choice that the people to the North have. The really stunning thing is that Mexican Immigrants to the US once presented with an economic political environment that maximizes free choice become as wealthy as the rest of American citizens whether they become citizens or not. The mystery is why the same opportunity does not exist on the opposite side of the border. It may come down to economic freedom of choice as economic freedom is joined at the hip bone with political freedom. Here is one theory why: What a lot of people don't know or realize about the US economy is that in a country where people are most free labor costs the most because people who are free don't have to and are not easily forced to give it away. That alone can put the US economy above most others even the Sweden Norway and Switzerland's of the world. The French , German and British Economies not to mention the Japanese all became their best when labor became more expensive when the people were most free. Most middle eastern and African mediterranean countries are populated with the unfree as we see in Libya and Syria and their net national production is scarce - More freedom including economic freedom of choice means the top and bottom can propell itself. Less people in the US work for top multinational corporations than you find working in small companies. Most of our cities were not built by people of all economic wealth classifications which is why we have and not by central planning. Oh my i have seen plenty of central planned cities that were complete disasters including where I lived on The South Side of Chicago between the centrally planned projects that were almost universally a complete and utter expensive failure. People who have the freedom of economic choice don't have to go to work for anyone at all even themselves. That significantly by itself limits supply of available workers to do labor. In the Grand old soviet union where everyone was supposed to have an assigned place and station in life and society, the cost of labor barely advanced beyond the poverty level for manual labor. Unions maybe getting more credit than deserved for raising wages in the US because it might not be union demands that have much to making good labor rare but just the personal freedom to find something else one can do to spend or sell one's time and efforts. Freedom by itself does more to raise wages than tight top down government control and resource allocation. Government naturally wants you to believe the opposite. They are always telling you that you have far too much freedom and we need to pay them to make most if not all of our choices for us because that somehow leads to utopia . At least that is what they tend to be telling us and then there is the tale of two cities. That centrally planned and managed by the government and that which came about in natural disorganized organic growth that causes environmentalists control freaks and government officials to swoon in fear of. We get to see the relative success of no planning verses central planning and the economic results. Ever notice how public school teachers seem to be paid more than average wages in society and complain that they should be paid a lot more. Yes they complain constantly about being under appreciated because for some strange reason tax paying corporations and businesses can compensate their workers better in many cases. Why the disparity in wages? Again it is freedom of economic choice involved. There are plenty of low tier jobs that don't pay very well and not nearly was well as the unionized public school teacher jobs do. There is choice and trade offs in the entire job market. Once upon a time government service was supposed to be as much a mixture of self sacrifice for the good of the community as it was about getting paid like it still is in the military. Government jobs are almost unknown that are self sustaining and don't require tolls or taxation to support them. It should seem amazing to people who work for the government that anyone can do better economically than they do without all the central planners fostering their own economic futures. Al these people tell us that everything is "over developed" in the US only to add to that that we need their tax paid services as central planning authorities? Whether you go to West Palm Beach or to viable working class neighborhoods this country tends to be built by the people who live there and is not planned. The central planning thing is way out of control in Portland and extremely costly. The results are funny in that people tend to appreciate all the buildings built by free people in the past more than by the central planning goon squads today. In order to sell central planned condo sites over the old rail way yards in NW Portland the developers came up with plans to build the buildings with separate identifying characteristics to hide the central planning aspects of how the government decided it wanted to pack people in supposed to save the environment from sprawl. The interesting thing is it all looks and feels fake to the core. The best thing that had been done by the central planners was to re-introduce mixed uses instead of segregating them which is one of the worst mistakes of prior planning authorities and also in spite of all of their mass transit ideology they allowed underground parking to go into the area in a big way. The question then is why didn't they just let the developers build condo towers as high as they felt like or do what ever they wanted to on land they owned because the net effect of the planning is just to make it look like there was a lot less planning involved. You see that and then go off to the Portland suburbs where planning departments had a lot less prohibitions against letting light and heavy industry in and allowing Costco and walmart in and the boom out in the burbs is spectacular along with an obvious wealth disparity that favors them over the central city. The planning is either all political--bribe as you go or ideological utopia coupled with nuisance laws. Now the city planners have achieved one of the worst nightmares they could have imagined with commuters forced to leave the city limits to find day jobs so Portland has become a jobless bedroom community except for the lawyers. give the American back more of their freedom of choice and they can do amazing things you won't see elsewhere. If you notice the whole idea behind carbon dioxide control to prevent global warming is to reduce personal choices of theamerican.com people and to attempt to prevent Americans from consuming what ever they want to. They want central planners to allocate choice not just goods to the rest of us. I was in Yugoslavia at a communist hotel for workers when it was a communist paradise and that is exactly what you got--what you were allocated. That was the same idea Jimmy Carter had when he came up with the great idea of having controls on how much gasoline one could buy instead of just letting the market price rise and allowing people to either find alternatives or be more conservative in their use. It was no better than Nixon and Ford wage and price controls. So many stupid mistakes have been made in government trying to control what just comes naturally with what were once unexpected adverse consequences but are now known to be what should naturally be expected. Freedom of Economic Choice is as important as political freedom in raising wages in any country. It can be seen all over the world including in Asian countries that include, Singapore, Korea, Taiwan, Hong Kong, Japan and Now China and India. Countries with the most economic freedom are automatically allocating much more wealth to much larger populations of people. It is amazing to watch the progress there and then to sit back and wonder why we have so many people in our own country that want to do everything possible to prevent free economic choice usually making some environmental quality excuse or confabulating stories about how bad economic choices like producing carbon dioxide emissions will somehow lead to the end of the world that is only emissions from mineral hydro carbon resources and not from trees! The real goal seems of the carbon counters is probably to raise unemployment and give our society the ambiance of Mexican back to nature wide spread poverty. .