The NYT tells us that the slowing of the growth rate of China's economy to just over 9 percent, "will make it much harder to supply jobs to the millions of Chinese moving to cities from rural areas in search of work." The very next sentence tells readers that, "any slower growth could prove a shock to workers who have been receiving double-digit pay increases each year, as companies struggle to find enough labor to keep factories open." Okay, the first sentence warns us that growth may be insufficient to absorb the number of workers leaving rural areas in search of jobs. The next sentence tells us that the slowdown in growth will reduce the labor shortage that has been putting upward pressure on wages. We need an editor here. Double-digit wage growth implies that factories were having trouble attracting workers away from rural areas. If the economy weakens, then the rate of wage growth will presumably slow, but the country is not likely to face problems absorbing the flow of workers from the countryside unless the growth rate slows far more than is predicted in this article.
--Dean Baker
