I recall reading something which claimed that higher labour costs made up only a tiny fraction of the higher cost of doing business in the US(the rest being things like higer corporate tax rates and burdensome regulations), but I can’t seem to find it again. Does anyone know what I’m talking about?
Higher labor cost makes up no part of the higher cost of doing business in the US. Labor cost isn’t some arbitrary number, but a function of the productivity of labor. In the absence of government meddling, labor cost is always constant in relation to the the value it produces. The only reason labor is less competitive in the US is because of taxes, regulations and unions. For instance someone making 50k in the US actually has to produce like 80k of value to be worth employing.