While a raise in wages for China will definitely increase prices, Eric Liu argues that this is actually a good thing for Americans. As wages increase in China, so does the amount of people that can afford American goods, potentially leading to higher wages in America.
http://ideas.time.com/2012/02/22/why-chinas-rise-is-great-for-america/
1 comment:
While I see some benefits for the higher wages in China, I think the most obvious impact will be the shift of manufacturing to other countries with lower production costs, perhaps in Southeast Asia. The increased demand for American products will changed as well but since the US is more of a service based economy, I'd be interested to see if average wage actually changes that much.
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