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Old 03-18-2010, 12:04 PM   #90 (permalink)
dippin
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Quote:
Originally Posted by aceventura3 View Post
The comparison in dollars can be misleading. Chinese people don't generally buy goods and services in US dollars. On the surface it appears the median wage ratio of 19.5:1 would translate to living standards, but it may not. For example what is the cost to feed a family of 4 in China compared to the US? Is it still 19.5:1? What about the cost to shelter a family of 4, 19.5:1? Costs for other necessities? Then what are the things that are required in the US that may not be required in China. Then we could also look at taxes, perhaps after taxes (all taxes) that $39,000 per year is really $24,000 and that $2,000 may be equal $12,000 in benefits from national wealth based on the way the country distributes its wealth, I don't have exact numbers, I am just using some numbers to illustrate that the 19.5:1 ratio may be different than it appears on the surface.

Taxes is only one variable.

First, I reported the number in purchasing power parities.

Second, from the point of view of a company, what a salary does or does not buy is irrelevant. The investment decision is "x amount in the USA or Y amount in China?"
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