Fire and Knowledge

An international consulting firm determined that the average labor productivity in the modern sectors in India is 15 percent of labor productivity in the United States.

In other words, if you hired an average Indian worker and paid him one-fifth of what you paid an average American worker, it would cost you more to get a given amount of work done in India than in the United States. Paying 20 percent of what an American worker makes to someone who produces only 15 percent of what an American worker produces would increase your labor costs.

—Thomas Sowell, Basic Economics (3rd Edition, Basic Books, 2007), p. 446.