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Wages in China have increased by 500% from 1994 to 2024, by far the highest rate of increase of any country
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this post was submitted on 22 Oct 2025
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The only suspicious part of that is that its out of date.
PPP is just purchasing power parity, and (vastly oversimplifing) it's basically saying that if you live in a country where you need $200 a week for you needs, your $1 is worth more than someones $1 in a country where they need $300 a week for their needs.
PPP is the product of statistical analysis. So what we have is analysis stacked on another statistical analysis with a currency conversion squeezed in there somewhere. I just feel like there are too many moving parts for this analysis to be taken too seriously.
What we have is a methodology for measuring purchasing power, that is, the ability to buy things. This is superior to a methodology of measuring spreadsheet numbers (which is what money is in the modern world), where the numbers are measuring non-equivalent quantities.
Currency exchange rates are not objective, they are pegged specifically to international trade, not domestic. So if I have 1 dollar and you have 1 yuan, the exchange rate tells me how many dollars you can buy and how many yuan I can buy. What it doesn't tell me is what is the average grocery bill in China and what is the average grocery bill in the US. It doesn't tell me the average cost for a KwH in China versus the US.
What we want to know, economically is not who has more fiat currency in their cash flow. We want to know who is better able to feed their kids using their income.
This 500% increase would be perfectly understandable if we said "carrying capacity of Chinese households increased by 500%" because it's relatively clear we can measure that. The comparative nature of the problem is obvious - the basket of goods for household carrying capacity is potentially different based on country. But the fundamentals are the same: shelter, calories, hydration, fitness, medicine, clothing, education, etc. Chinese people are able to obtain 5x more of this basket than they used to be able to.
Meanwhile, I am sure you are familiar with how it's going in the US
So what's the correct interpretation of this graphic when comparing between countries? Is it supposed to say that Americans can afford 5 times as much stuff? That doesn't seem right to me, so how come these PPP adjustments don't bring China closer?
Yeah an apartment in a major city in China costs like 2 years wages where in usa it is like 20 years wages.