Hi guys. Welcome back to Global Business Environment course two. This is Module 6 and we're in part 5. We've been discussing a variety of issues impacting the global business environment today. One thing that we haven't discussed very much is the impact of labor, labor rates, wage rates around the world. We've talked about the rise of these emerging economies and their increasing importance in today's global society. In many cases we've seen countries receive large amounts of investment, that foreign direct investment which we discussed earlier. We've seen those, major shifts in the emerging economies in receiving all of that cumulative investment. And in many case the foreign companies making the investments in those nations are clearly hoping to receive a competitive advantage by the lower wage rate in the host economy. And so, that's one of the criticisms the taking advantage of, that's leveled at many foreign companies for making these investments is that you're taking advantage or exploiting workers. One thing that has happened, though, is that, as investments have been made in many of these economies, such as South Korea, China as demand has increased for the labor in those markets, that's put upward pressure on the wage rate and increased, the minimum wage by law and also the market-driven wage for labor in many economies. And in some of those places what started out as perhaps entry level assembly, relatively less skilled work has moved upstream. And in many places such as South Korea and China we see much more added value labor. And some of the entry-level lower skilled labor moving to other nations which currently have lower wage levels. And so it's not the case that one country always stays in the position that it might be at any one point in time. A nation might start out at with a low le, labor rate but as, as time moves forward it, it rises and the company the country continues to evolve and develop in a positive direction. And so I just wanted to show you briefly some information about eh, wage rates across the globe. Australia leads the world with the highest hourly wage rate in US dollars, $17.39 per hour. We see many other developed nations dominating this list. In the United States the the rate is at $7.25 and, and the, the data it, you know, it does differ depending on the year that we're looking at. But there is a great disparity of crown, around the globe. Here's South Korea, in 2014 with $4.63. 30 or 40 years ago, this was much, much lower. And so it attracted, South Korea attracted a, a high level of, of foreign direct investment, which was geared towards entry-level assembly and lower-skilled labor. But as I mentioned earlier, has moved upstream. And now, much of the investment in South Korea is directed towards higher skilled work, research and development design engineering level re-, required work. And so this this influence, our impact of foreign direct investment on things like wage rates, can be positive, if the economy continues to evolve. Here we see Taiwan which was also a country that received large levels of foreign direct investment over the last few decades. As we go down this list we see just quite a bit of, disparity. There are some countries that have extremely low levels of, wage rates, and you know, China still weighs in at $1.19 per hour. And that's increased, by, a very high percentage, over, 200% over the last 15 to 20 years. This is considered to be expensive today compared to what it was historically. in, in some places in China the companies have a difficult time finding the, the workers that they need with the skill level they need. And so this has put this upward pressure on this wage, wage rate. Of course, there are differences in in lifestyle and purchasing power and some of this data you can explore tries to account for that. But there are other parts of the world that have comparatively speaking much lower wage rates, and one thing you might pay attention to is the future for foreign direct investment in for example, African nations. Will that be will that be the continent that becomes the new focus the new hot and exciting area for receiving foreign direct investment. Only time will tell but their rage wait, the wage rates in these economies certainly would bear that out. India, still has a incredibly low wage rate, $0.28 per hour, is what we see here. And so, that is that is you know, four times less than what we saw with China. And so there's still a lot of movement and shifting that we should expect to see across borders as companies make new decisions and new investments over time. And so this is just a glimpse at one other aspect of the global business environment, wage rates and labor issues. We will conclude this part, part 5, and pick back with our final part, part 6, talking about one final issue related to today's global business environment. Thank you very much.
