While rich Americans or Europeans may like to believe their countries’ dramatically higher wages are somehow justified by a more efficient or better-educated workforce, the overwhelming economic evidence shows that this is not the case. A large part of the difference is simply a “place premium”: Workers are paid more in rich countries because they live in highly productive societies where they are relatively scarce and, therefore, can negotiate a higher wage. One way to see that is to compare the wages of McDonald’s workers, who, by design, do identical work across the world and yet are paid
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