China Wage Inflation means no more Cheap Goods to Western Countries

China Wage Inflation means no more Cheap Goods to Western Countries

It is engaging in a big wage hike.

WSJ reports that according to a company announcement, minimum wage workers may see a more than doubling of wages, while others will see at least a 30% hike -- previously the company had indicated a 20% wage hike to deal with the problem, so this is already an expansion.

This is obviously a tough move for the company to have to take given the notoriously low margins facing Chinese manufacturers, plus the fact that the yuan has already been de facto revalued higher due to the collapsing euro.

But obviously the previous situation is untenable, and we wouldn't be surprised to see this move reverberate across the country, and then, by extension across the world, to consumers that enjoy the fruits of cheap Chinese labor.