Quote from: Rassah on July 13, 2011, 04:04:11 PM

I'm not an Austrian economist, nor do I know any books where you can get quotes, but what you are saying is indeed fact, and is readily evident in our emerging economies, such as China, India, and Brasil, where rapid growth has created an ever widening wage inequality between those who are educated (either formally, or just with personal experience in management/business) and those who aren't. Though a simpler explanation for all this is just supply-demand. If demand for skilled/educated workers is high, their wages will go up. Uneducated, untrained workers are available en masse, so their wages are generally very low. Though, China and India are now reaching a point where they are actually running out of unskilled cheap labor to hire, so wages for unskilled labor are starting to go up alarmingly fast, too.

India actually has a very... strange issue. In their job culture it is actually assumed that you will be allowed to grow very fast and become a manager within a year or two. If that's not the case, then the job is not worth it, and so the employee turnover for low-level service jobs is very high. If this trend actually continues, and the companies go along with it, they may end up with a situation where mid-level (self-described, not necessarily skillful) managers are abundant, but low-level workers who are skilled in basics such as answering phones are in lower supply, which may (though unlikely) result is unskilled low-level workers being in higher demand and earning more than the skilled but overly abundant mid-level managers.

I would argue, that the abundant mid-level manager would penetrate the more thriving unskilled-market, so that the wages in the two sectors can at a max converge. For germany for example I can tell how the labor market changed after the so called "Bildungsexpansion" lit: education-expansion. The government put a lot of effort to get the masses to get higher educational degrees, resulting in 50% people with higher school certificate (Abitur) and tenfold the number of university students. One result is, that people with medium education replaced the unskilled workforce which now has a much higher risk of being unemployed. A lot of people with a masters degree dont do any academic job. This is also somehow dissatisfying, because everybody feels a bit unchallanged. But this gets too far into politics (equal opportunities) and away from theoretical considerations I think.