I'm not saying that wage level is the only factor for growth. But it is
extremely significant.
If you want to keep higher local wage levels, you rely on other comparative advantages (easier access to capital, better education, better political stability), and all those tend to erode over time. As they do, you either lose your wage advantage or the whole industry, there is no alternative.
> Otherwise Mexico and Russia would be industrial superpowers catching up to EU and the US, if all it took was neighbouring you and having cheaper labor than you.
They are! Just compare vehicle production for an easy proxy: Mexico had >100% growth over the last 2 decades, while US numbers are basically flat. Russia is a bad example now because of war, but they did a lot of catching up before.
If your theory is that all western manufacturing struggles just because every single company is stupid and spends too much on lawyers and accountants then I don't know what to tell you.
If you want to keep higher local wage levels, you rely on other comparative advantages (easier access to capital, better education, better political stability), and all those tend to erode over time. As they do, you either lose your wage advantage or the whole industry, there is no alternative.
> Otherwise Mexico and Russia would be industrial superpowers catching up to EU and the US, if all it took was neighbouring you and having cheaper labor than you.
They are! Just compare vehicle production for an easy proxy: Mexico had >100% growth over the last 2 decades, while US numbers are basically flat. Russia is a bad example now because of war, but they did a lot of catching up before.
If your theory is that all western manufacturing struggles just because every single company is stupid and spends too much on lawyers and accountants then I don't know what to tell you.