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Thread: Everything hikes except salary!!!

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[quote=ERENCIUS,247919]Quote:
"PLEASE explain me more about how increasing salaries can do anything good to any business because I really don't see..."

For sure, have you ever heard about fordism, this is how, during the 30s especially, that the standard of living in the US increased especially for the poor population... Heard of this? And more interesting: the conditions are good to implement it in China since the population growth is high, markets are far from being glutted, and the place of the services in China is definitly not as important as in Europe.
You ll ask what is Fordism, I ll answer first it is a production model used in the industry. The caracteristics of it are mass production (because of work division)  mass consumption (possible because of an increase of the wages) but most important, the consensual sharing of productivity gains between producers (profits), workers (higher wage), consumer (lower price). It could be applied in China... Needs to improve productivity to increase salaries that's all. And for sure selling in the country you are from and selling abroad is not the same. In this case it will be more efficient if the target working population is poor since they have basic needs and cannot afford buying foreign products... Chinese case matches... Strange isn't it? 
You also said in this case as the price of raw materials are increasing, they cannot pay higher salaries to the workers. I totally agree on this, I was saying this in general (it works especially for good which VAT is high). For the prices of wheat, well I said in my very first answer that it could be a reason for the price to rocket like this please read it.

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"High inflation could also mean that there is more money circulating and that the demand for goods is increasing"
I never said the contrary, but you are right I didnt mentionned the quantity of money circulating in the Economy but there is a reason for this, the Chinese currency is totally controlled by the Chinese governement, not suffering from the speculators' influence and it s money is not accepted anywhere but in China, so its effects are quite reduced (it is part of it I m not denying it).[/quote]

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