Labor rates rising, but labor is still “cheap” if you get more value.

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Labor rates rising, but labor is still “cheap” if you get more value.

In a response to the much blogged and tweeted Economist article “Is the era of cheap Chinese labour over?“,  Economist guest contributor Tyler Cowen answers the question intelligently in his response “The important thing is Chinese productivity is rising“.

Anyway, the money quote comes at the end of the article:

In the question stated above, “cheap” is a misleading word. The more productive China becomes, the cheaper its labour will be, at least relative to what you get.

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