Low Wages Are Not High Returns For Enterprises.

Facts have proved that any labor cost deliberately lowered is implying a huge external cost. Moreover, this external cost may eventually be returned to the management in an abnormal way.

The situation seems to be more and more clear. For countless Chinese manufacturing enterprises, salary increases are becoming more and more inevitable. There are two options for business owners. They either passively wait for the Labour Party to fight, or take the initiative to raise the remuneration of the workers, and eliminate the danger of stoppage at the end of Qingping, for example, Beijing modern. Although the stoppage has happened, it has done a quick and active way to minimize the losses.

Low wages are not equal to high returns, but they are likely to be high risk.

At the moment, the ultra low wage, ultra-low welfare development mode of ultra-low cost will be gone forever. The question we need to face is how macroeconomic policymakers and entrepreneurs respond to the "post demographic dividend" era of comparative advantage.

However, for macro managers, this is not necessarily a very pessimistic issue. In a sense, the "comparative advantage" of low labor costs may itself be a wrong imagination. The so-called "comparative advantage" contains the logic of "absolute disadvantage".

Because the ultimate goal of economic development is to increase people's well-being and happiness. If China's economy grows at a high speed, the income level of labourers will not increase at the same time, or even much lower than the growth of wealth created by them. Moreover, the gap between the rich and the poor in the society is widening because of the distorted distribution of wealth. This result just deviates from our original intention of developing the economy. Undoubtedly, the "comparative advantage" at that time has become an "absolute disadvantage" and has promoted all kinds of social crises. Not only the low-income people, but also the happiness of the whole society has been reduced.

For a long time, economic policymakers have been calling for the expansion of domestic demand, but from the beginning, they all lack the support of citizen's income growth. Ultimately, in order to maintain economic growth, they have to fall into the trap of high investment again. 3 years ago, the International Labour Organization pointed out that China's per capita output growth was much higher than that of neighboring India and ASEAN countries, but wage growth was slow, resulting in a prolonged consumption slump.

If today's manufacturers do not allow their producers to enjoy the due rewards created by wealth creation, then human civilization will return to a period when the minority people occupy absolute social wealth in the pre industrial era. The difference is that the production mode and scale at that time were not as severe as demand today.