Friday, April 20, 2012

Increased Labor Demand and Higher Wages

The New York Times reports that increased demand for laborers in China is resulting in increased wages, which is exactly what the competitive labor market model predicts. The article also states that as reductions in the number of young laborers in the future due to government birth policies will have even fewer laborers in the future.

So will Chinese economic growth be hindered by this reduction in the supply of labor and even higher labor costs?

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