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Thread: Everything hikes except salary!!!

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[quote=AL32,247833]Paul: don't feel bad about expressing yourself please; we like long answers, even broad discussions, and counter-argumentations...!!!

That said, I will also "try" to be short here in replying to Erencius again...sorry man! ...hehe!

>> "This sentence means that if they have no savings where does the money come from ? From a soaring revenu... Of course poor people do not have any savings, it was exactly what I meant." 
     You're saying the same thing again: ~"they (population) are spending more; so it means they are paid more": 
---> NO!! there is no direct link there --> it could be only due to the rich people spending more or like I said: increasing investments, capital gains and population growth. How can you so eaily affirm that higher spendings absolutely means that salaries are higher?; that: "inflation can be related to savings and to higher incomes" ?? ---> High inflation could also mean that there is more money circulating and that the demand for goods is increasing; not necessarily that people earn more. There are more Mercedes-Benz on the streets, but more people now have no other choice than to eat plain rice. You don't think that this is a possibility????

>> "However if you increase the wages of your employees you create a potential demand so you can try to take advantage of your situation. Higher salaries ----> more market opportunities."
---> this is definately NOT how companies think nor a viable business solution: you don't pay your employees more hoping for them to buy more. You can never stimulate a business revenues (or the economy in general) by giving more to your employees. This argument is totally wrong. --> they will then start saving not return it back to the company (especially in China!!).... Back to economics 101: if you want to sell more, lower the prices; if you want to keep same profit with lower selling prices; lower your cost ---> and that does NOT mean pay your employees more. If you want to improve what you called "inner market" the same rules apply as for the export market: you have to be competitive and always strive to lower your costs. If like in the example of noodles, your raw material goes higher, what is left to lower?: salaries. PLEASE explain me more about how increasing salaries can do anything good to any business because I really don't see...
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