All you have to do, is to try and see it from the rich mans eye.
Here's an exmple
A factory in west, costs N € per hour. This is the running costs. If it's put up in the eastern block, it costs N/2 €. If it's put up in Asia,
it costs about N/4 €.
Previously shipping costs would be enormous, from the East to west ... but it's not merely wages that are high, it's also transport cost is high. So
transport "within" the west, is equivalent to transport from the east.
Second, when you pay wages to a person in Europe you have to pay 50/50 to the individual and to the government. Which is quite expensive of course.
Now, assuming that you have to pay about 26% taxes from what you make, from a business ... that means, that you'll save about 50 percent, by letting
Now, seen from the entire "system" perspective ... it's like this. If a person get's salare X, then the government gets about 30 percent of that
salary from the individual, and another equivalent amount from the company. It amounts to about 50 percent of the salary. This demands
transportation systems, health care systems, etc., as people go to work it requires a lot of other systems to be "better" functional than otherwise.
The streets must be taken care off better, as the tearoff factor is greater ... iwhat it means is this, more people in employment means greater
transition, and that means that offical or public infrastructure must be greater, with greater transportation, as an example. This means, that you
can in fact cut this amount in half, to about 25% to being actual tax money coming into the box office of the government.
Now, you can run the numbers again ... the government gets at most 50 percent from the tax payer, with increased cost factor, marginalizing this down
to about 25 percent. (think lesser income from companies, and increased public employment costs). Or it can get 26 percent, that can go up to about
40 percent with increasing income tax from companies, that start at 26 percent.
What it amounts to, is that people running the government office and public employees will see two curves that will have a common point. On one side,
you have a factor which will give the government good amount of money but decrease, with increasing labour factor. Or decrease labour factor, and
Since the government is being increasingly run as a company, unemployment is actually profitable. Seen from a national point of view, if your country
gets in $1 billion, then the "rich" people can decide wether to pay "minimal" salaries (through government securities) and increase their "capital" or
pay you "more" and decrease theirs. In fact, the government being run increasingly as a company sees this the same way ... and in this case, it's
against you the individual tax payer, and it's a profit organisation for the rich.
Which is basically why the saying goes "The rich get rich, and the poor get poor" ...
edit on 20/5/2012 by bjarneorn because: (no reason given)