Convergence deception

It is not difficult to understand how NWO and EU have been lying for decades. Per capita income convergence is a big lie and the main reason citizens in poorer countries want to be in EU. EU's deception has to do with the concepts of productivity and competitiveness that are related. Productivity is also related to per capita income. We will give an example. There are some simple mathematics. We will make it as simple as possible.

Let's take two hypothetical factories that make athletic shoes. In Factory A, a worker produces 100 pairs of sports shoes, in a certain period of time. In Factory B, a worker produces 135 pairs of the same shoes, in the same time period. Factory B is more productive than Factory A. This has an effect on the cost of production.

Let's say time period is 1 month or 160 working hours with 8 hours working days. In reality, working days per month are 20 - 22, so there are 160, 168 or 176 working hours per month. We assume that workers get paid 6,25 euros per hour. If we do the calculations, we will find that in Factory A, labor cost is 10 euros per pair of shoes while in the more productive Factory B, it is 26% lower, 7,4 euros per pair.

160 X 6,25 = 1.000     1.000 / 100 = 10     1.000/135 = 7,4

The most productive factory has lower labor cost per unit of product. We mentioned in previous articles that not only productivity but also price level has an effect on competiveness. Suppose the two factories are in different countries, with different price levels and different hourly wages. More productive Factory B is in a country with higher price levels and therefore higher hourly wage. Workers are getting paid 8,44 (8,4375) euros per hour. Then, labor cost becomes 10 euros per pair of shoes, the same as in Factory A

160 X 8.4375 = 1350     1.350 /135 = 10

In the example, hourly wage in Factory B was chosen so that labor cost per pair would be the same as in Factory A. If hourly wage in Factory B is below 8,44 €, Factory B would have lower labor cost per pair, compared to Factory A. If hourly wage in Factory B is above 8,44 €, Factory B would have higher labor cost, compared to Factory A.

So what determines which factory will have higher labor cost is comparison of two ratios. Factory B is 135/100 = 1,35 times more productivy than Factory A. If hourly wages are 1,35 times higher in Factory B, the two factories will have same labor cost per unit.

6,25 X 1,35 = 8,4375

If hourly wage in Factory B is less than 1,35 higher, Factory B will have lower labor cost per unit. If hourly wage in Factory B is more than 1,35 higher, Factory B will have higher labor cost. It is possible for a less productive factory to have lower labor cost, if hourly wage is low enough. Labor cost is related to competiveness.

Labor costs are not the only costs but a significant percentage. Most likely other costs will also be higher in a country that has higher price level. Total per unit cost affects the price of the product. The price of the product is the cost plus a markup. Markup is the difference between cost and selling price. The two factories produce same shoes, same type and same qualiy.

No consumers will buy a product when they can buy the same type and quality at a lower price. Factory A is clearly non-competitive, if it has the same price level as Factory B. It is possible to be able to compete with Factory B, if there is enough difference in price level. Countries with lower per capita income have lower productivities. It will be explained in following articles.

Let's assume that Factory A is in an Eastern European Country 1 and Factory B in a Western European Country 2. Factory A could also be in a relatively poor Western European country. The same reasoning applies, to a lesser extent. At the bottom in Western Europe are; Portugal Spain, Italy, Malta, Britain, France. Factory A will have lower productivity. If the two countries have approximately the same price level, Factory A will not be able to compete with Factory B.

The athletic shoe manufacturing industry consists of many factories. Industry productivity is the weighted average of all factories. In Country 1, athletic shoes industry will have lower productivity compared to Country 2. Since in damned EU, there is free movement of goods, Country 1 will not able to protect domestic industries from competition inside EU. Country 2 will take a large share of the athletic shoe market in Country 1.

Domestic production of athletic shoes will be significantly reduced. This will redude GDP (Gross Domestic Product) and per capita income which is GDP divided by population. So, Eastern European Country 1 will become poorer and Western European Country 2 will benefit. In order for Country 1 not to get poorer, it needs to get an equal part in terms of total sales, from another market in Country 2. This is not possible though because products in Country 1 are not competive due to lower productivity.

NWO and EU have been fooling everybody for decades. They promised poorer countries that they will converge with richer in terms of income. In reality, it is exactly the opposite happening. EU participation has negative effect on their economies. They would be much better off if they did not participate. Convergence is a big lie and it is the main reason citizens in poorer countries have a positive view of EU.

There is another important issue that arises. These people, NWO - EU, are obviously big time crooks. How can an Eastern European country remain in EU another day when NWO's and EU's vicious cabal have been fooling them for very long time? When you realize that your business partner is stealing money from you, the partnership is over. When you realize that your love partner is cheating on you, the relationship is over.

Eastern European countries should leave EU ASAP and form their own group. This is the only way they can prosper. This is the only way they can reach Western Europe's per capita income in 25 - 30 years. EU has been fooling them and cheating them all along. It is better late than never. But they should not be any delay because everyday they remain in EU, hurts them a lot.