In other words, a country's wage rates are not determined by its trading partners wage rates. Wage rates are really a domestic matter. Real wages are determined by the size of the capital structure relative to the working population. Therefore wage rates are lower in most Asian countries because their peoples have fewer capital goods to work with, and this is why their productivity is lower. Economically speaking 'cheap labour' is a meaningless phrase by itself.
Economic goods are only 'cheap' in relation to their costs.
Hence, even though much Asian labour seems 'cheap' to us it is quite expensive in relation to the value of its output. In many instances, then, unit labour costs exceeded the US level. These facts demonstrate that there is no cheap labour in Asia in the only sense that matters. The 'cheap' labour argument would only have any validity if land and labour were the only factors of production. Though this is view is obviously absurd it is, nonetheless, the implicit assumption upon which the 'cheap' labour argument rests.