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Avoid wage-price spiral

Aggregated Source: Jiang's Information Office
May 11, 2008|

The residents real income has shrink dramatically as the CPI keeps rising rapidly. Should the salary be linked with the CPI to avoid inflation? The government will take the prices into consideration when adjusting and regulating the wages. But it is inadvisable to link the wages to prices directly. It merely appears to delight us, but it is not necessarily to bring the labors the material benefit, which has been proven both home and abroad. Because wage-price spiral will push up the cost and increase the risk of overall inflation.

To prevent the inflation from threatening people's livelihood, we can try to link the minimum wages or the personal income tax exemption to inflation.

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