[quote=Eugene][quote=sdduuuude]
Maybe in China, because jobs may actually start coming back here. When unemployment benefits run out, there’ll be lots of people willing to work for less than the current minimum wage.[/quote]
It’s more complicated than that. You have to think about aggregate demand and exchange rates (particularly the USD/CNY exchange rate).
To put it simply: any attempt to bring back manufacturing/exporting jobs by cutting the minimum wage will be met by the Chinese government with an adjustment of USD/CNY to make sure that Chinese stuff is still cheaper.[/quote]
Not a bad point. That doesn’t necessarily hurt us, though, as we buy so much of that stuff. Plus, devaluing their currency puts pressure on them in other ways. They can’t do it ad-infinitum.
