Rising Wages in China

Posted by: Michael Mandel on March 20

Take a look at this BW article about fast-rising wages in China. Could make a big difference.

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Reader Comments

Brandon W

March 20, 2006 11:18 AM

This could be both bad news and good news. The bad news is, this is likely to accelerate inflation. Companies will absorb the costs for a time, but eventually they will have to raise prices; and once they start, why would they stop before they hit the maximum the market will bear? As pointed out in your article "Young Americans Take It on the Chin" the under-35 sect is witnessing extremely meager real growth of income and wealth; in fact, if inflation were higher (I think it is, but we'll go with the official numbers for now) they would have a declining standard of living. When inflation does accelerate from this development in China (and I suspect India) it will send those under 35 into a real decline - a spiral they may not be able to get out of. With costs of living going up from accelerating inflation and housing prices inflated out of reach of their weak incomes we're facing a real crisis of standard of living. We've gotten a cheap ride on the back of the rest of the world for the past decade, and that's helped us from reaching the tipping point; but that cheap ride may be over....

The good news? Maybe, just maybe, it will become financially reasonable to move manufacturing back into the United States. Maybe. I'm not holding my breath.

Joe

March 20, 2006 09:55 PM

Rising Inflation

All this talk about rising wages in china causing inflation. I'm a bit confused. I was taught that inflation is caused by an increase in the money supply. How do rising wages in china cause an increase in money supply? Will the Fed print more money because of rising wages in china?

Also an interesting note for economist who are simultaneously against increasing the minimum wage and for productivity gains caused by automation and other innovations. Notice how the rising wages is causing the Chinese companies to be innovative in ways they otherwise wouldn't have. I wonder what productivity gains we are missing out on here: A robot that stocks shelves maybe? A checkout without a cashier maybe? An automated fast food restaurant?

sredni_vashtar

March 22, 2006 10:47 AM

"Last year salaries surged 40%, to an average of $160 a month... With the gap between wages in China and those elsewhere gradually closing..."

Come on, 160 a month? There's still a helluva gap there dude!

Brandon

March 22, 2006 02:01 PM

Brad DeLong offers some interesting predictions concerning Chinese inflation and the trade deficit by way of Martin Wolf's Economics Forum:

"... a wave of domestic inflation in China will appreciate the real value of the renminbi even without nominal appreciation."

"The most likely scenario, I think, is that over the next half decade price levels in Asia will rise substantially enough to curb imports into the U.S. and boost exports, and that the U.S. trade deficit will thus shrink back down to sustainable levels without any great macroeconomic upset in the U.S."

Dyna-Leigh

August 22, 2007 10:02 PM

why can't you show the right literacy wages people are trying to do a assignment and can't find any important information... please hurry up and put information on there...

piece out XxX

Katonks

November 12, 2007 07:44 AM

I think that vast immigration of Chinese workers into Canada into various provinces would benefit corporations in Canada. Without having to raise minimum wages, by having vast immigration of these hard working Chinese immigrants, rapid urbanizations of large cities throughout Canada would result in a very strong economy. Maybe 1 million Chinese immigrants per province would be greatly beneficial.

mike myers

June 10, 2008 10:59 PM

whats the average wage for a chinese woman, who teachs chinese language, in schools there? thanks?

David Fordham

September 4, 2008 03:56 PM

What is the average wage for a Chinese woman who teaches P.E. [Physical Education] in a middle school in Shenzhen

David Fordham

September 4, 2008 03:58 PM

What is the average wage for a Chinese Woman who teaches Chinese Language in a Middle School in Shenzhen

David Fordham

September 4, 2008 03:59 PM

What is the average wage for a Chinese Woman who teaches Chinese Language in a Middle School in Shenzhen

David Fordham

September 4, 2008 04:01 PM

What is the retirement age for a P.E. [Physical Education ] Female Teacher in a Middle Scool in Shenzhen.

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Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.

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