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Wages in China

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Today’s New York Times reports [2] that "wages [are] rising 10 percent or more a year in many Chinese cities."

If true — and, for the reason that follows, I find this stat to be believable — such a rise in wages is no surprise.  Such a rise in wages is the natural result of more market-driven investment, greater commerce, and economic growth.

And if true, this stat is difficult to reconcile with those pundits and politicians who argue that strong, independent labor unions are necessary to ensure that workers enjoy the benefits of economic growth.  In China, independent labor unions are illegal.  I confess to being no expert on the realities of the operations of labor unions in China, but I suspect that this reality is not remotely close to the model that the Robert Kuttners, Harold Meyersons, Paul Krugmans, John Edwardses — and John Sweeneys — among us believe should be adopted in the U.S. so that American workers can prosper.

Wages generally rise — and wages rise generally — because of market forces that improve worker productivity and encourage economic change and growth.   Labor unions are not the source of a general rise in real wages [3].

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