What is the labor Intensive Technique in Economics?

Answer 1

(A) Slavery or (B) Low wage sweatshops. This is opposed to high technology automation of factories by robotics and advanced production line machinery and computerized machine tools.

In the 1960s North American school children were shown pictures of road construction in China. In the picture there would be several thousands or even tens of thousands of manual laborers picking up rocks and walking over with them to drop them off elsewhere. This meant that people were in such plentiful supply that it was less expensive to have tens of thousands of workers possibly injuring themselves doing manual labor than to have a high technology grater, powered back hoe, and powered roller operated by a small handful of expert road work crew to make the roadways. No doubt the manual labor work was more dangerous and probably involved people dying from terrible accidents. This meant that human life was cheap also. That the leaders there did not value the lives of their workers because the injured or dead workers could be replaced many times over with others waiting to work. The same kind of work would be happening in other countries that were over populated like India where the people at that time were very poor and had terrible living conditions, would drink from polluted puddles of water and get sick.

The first world of industrialized, wealthier nations has seen in the years since 1980 a rise in the number of free-trade agreements and trade zone liberalizations that have reduced the democratically elected laws, and sovereignty of these nations that ends up with the manufacturing factory jobs moving overseas to cheap labor markets in the Far East, and making there be no import taxes to prevent import dumping of cheap goods. Without import taxes on these goods to make them as expensive to buy as locally made products, the local factories would not be able to compete with the overseas sweatshops, and therefore have to close down and lay off workers.

At one point in history a toy Cabbage Patch doll sold in the USA for the equivalent wages of the persons who manufactured the doll in Mexico, Japan or India or Malaysia, Thailand or Singapore or Hong Kong or Taiwan or China for what they would earn in two months of work so that the workers would be unable to afford to buy any such dolls for their families because the greedy money men who owned the factories and stores selling the dolls did not want to pay them hardly anything for their work efforts.

The people in the USA who were earning good wages in the factories were all fired or laid off. The factories were closed. The money men could then move production elsewhere to hire cheap labor in the Far East or Mexico. Now all of these laid off USA workers were in as bad or worse a situation as the foreign Far East workers because all of the necessities of life like food, shelter, heat, medicine, and other goods and services in their local area were comparatively more expensive than those in the Far Eastern countries.

These trade policies are just a way to make the average Joe Six Pack in America, Canada, and Europe lose their jobs to these other places where there is cheap labor, and pollution laws are not enforced by the governments there, and so this free trade laws and factory closing activity thereby lowers the standard of living of all such Americans, Canadians, and Europeans. But the rich owners of the stores and companies selling the products were able for a while to get more rich with the extra money that resulted in having to pay the foreign workers only a tiny amount of money while charging about the same price for the products sold back in America.

With time, the demand for lower prices (from the lowered standard of living domestically) caused the rich owners to have to lower the prices to levels that could sustain sales and maintain a reasonable profit margin. The end result was usually a lowering of product quality / durability, an increase in product breakage, and a corresponding increase in garbage land fill site usage for the faster accumulating broken junk.

In the last decade or so, it has come to be realized that transportation costs have risen as the price of oil changes. The fuel costs to move cheap products from far away may end up raising the price on the product to levels that again make locally produced products competitive against the foreign one--a catch-22 situation for the rich owners.