Even if all of the gardeners, agricultural workers, household staff, factory workers and others were replaced by technology, it would still cost more. If it were more cost effective, it would have been implemented already. Americans want low prices, they don’t care about working conditions. They do seem to have a problem “connecting the dots” to understand that the cheap products they want actually come with a price and what they are doing isn’t going to make America great again
I think both you and
@Admiral Beez are correct here.
That is to say, low wages stifle investments in productivity and innovation are very much a problem in Canada, not just at the low end of the wage spectrum either.
Industry here (both manufacturing and service) relies heavily on the cost advantage of the exchange rate.
We can actually deliver a TV show or a call centre or IT staff at 1/3 cheaper than the U.S. before factoring in any tax credits.
But the result is that the players here are often slow to innovate, they have a baked-in win......but one that goes away if the U.S.dollar falls/the Canadian dollar rises in a material way.
Business can be quite lazy about making investments that serve the long term, when that might actually depress earnings in the next few quarters.......
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Not every productivity investment is technology it should be said, in the case of gardening, switching to native perennial plants, that can thrive with little attention vs grass or annuals can greatly reduce the need for human
maintenance.
But this is also the technological aspects such as irrigation, or the use of slow-grow grass that may require mowing once every 4-5 weeks instead of every 1-2.
Changing over costs some money and time; but the end result may actually be cheaper.
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The same applies in agriculture. Some of the new Canadian greenhouse operations are very automated, and very efficient. Have a look at the price of all those Ontario-grown English cucumbers
the next time you're in the market. The price isn't rising...........its dropping. You're looking at median prices (off-season/on-season, promo-/non-promo) that under $1.50 per cucumber which is well less than what it was 10 years
ago. Ontario is now so dominant in this space w/this crop, that we are exporting in large quantities to the U.S.
Not every crop lends itself to the same degree of automation. But Ontario has become a leader in greenhouse tomatoes too, and field tomatoes in the U.S. are among the most migrant intensive crops.
In general, where the cheap labour is domestic in the U.S. I would expect a shift (if wages rose) that would lead to a short-term price pop....as the investments in productivity were made, but longer term, I don't see it as all that inflationary.
Where you would see a greater difference is repatriating work that has largely been exported, particularly apparel and linens.
Bringing those back as large-scale industry in the U.S., in their current form, would be highly inflationary, probably on the order of 100% (ie. a $10 T-shirt goes to $20)
However, I would expect, in the event of such a move, that you would seem some automation take the edge off.........again there is no pressure to do that when Nike can churn out shoes at a landed cost of $18 per
pair in the developing world and sell them for more than 10x that here.
Better paid labour would result increases in retail costs.........though not as much as one might think, a 50% increase in employee costs would represent a 5-10% increase in the cost of your combo.