Originally Posted by tedwinters

2 competing problems... Competitive advantage and globalization.

Basically, globalization drives down the price people are willing to pay for manufactured goods - shipping those low paying, non-technical jobs overseas where wages are lower. Forcing workers currntly employed in those jobs elsewhere.
If a country had a strong competitive advantage in certain sectors/economies, (eg: China/India has labour, Canada has natural resources, America *used* to have science and technology), then jobs should flow into those economies producing more goods and services in which it has a natural advantage in, allowing trade for the cheaper goods.

This ideally generates jobs in higher paying sectors, driving up average pay elsewhere.

The problem stems from losing your competitive advantage.... You can't just 'raise wages' without people having to pay more... And if you suddenly have to pay more for your goods, you'll find other ways to buy them... (EG: with globalization increasing, you'll order your new clothes straight from china, rather than off the shelf in walmart, you'll get your gadgets from dealextreme rather than bestbuy/circuitcity..)

it's a downward spiral to just try and 'raise wages', you need to fix the economy by focusing on areas in which your country/county/state has a natural competitive advantage in.