Is it true that the denser the population is in a country the more competition their is for wages, like China?

Question

Why or why not?

Answer 1

No that's not necessarily true, it strictly depends on supply AND demand for labor -- it could go either way. In a good-functioning economy, if there is a lot of people available for labor, there is also a lot of people consuming things, so there is large demand for products and services, and a large need for workers.

Answer 2

If the type of job is something anyone can do with minimal training, then, in general, the denser thepopulation the mor elikely there is to be people able to do the job, the higher competition for jobs, and hence the employer can offer lower wages.

However, if the employer wants to hire even more people than available, then despite the 'population density' then wages will not go down but up, due to a relative shortage.

However, if the job is quite specialised and cannot be done even with some training, then the density of th epopulation will have no effect on the wages.

The case of China however doesn't have to do with population density. While the population of China is huge, so is China. The population density in CHina, as a whole is not that high, although it is in metropolitan areas like SHanghai, Beijing.

The reason wages are relatively low in CHina is that the cost and standard of living are also low - outside the metropolitan areas. To someone toiling in the fields everyday to survive, a wage that would be way too low - even below legal minimum in the US for example - would appear very high. That's why people are moving from the rural areas to industrial areas in China for example Shenzen. These people can live in the industrial towns, feed themsleves, send some home to teh family, and even save for a better life when they go back to their hometowns a few years later.

The case of China is more of a low cost of living rather than a population density issue.

Answer 3

Like the supply of all goods and services in free market economies whether the good/service in question is mars bars, cars, clothes, or human labour the price of that good or service is determined by the market forces of supply and demand.

It would therefore seem to be the case that the larger the population in a country the lower the wages should be due to the pressure downwards which increased supply brings about.

However, there are a number of caveats. Firstly if supply of labour increases it will not always push down wages because you must also consider demand. If the demand for labour is also increasing, and indeed increasing faster than the supply of labour then you will find that wages are actually increasing, due to the increasing scarcity of labour.

Secondly, you must also realise that not all labour is the same. There is, of course, a much higher supply of factory workers in a country that there are chartered accountants due to the fact that it is much more difficult to train to become an accountant. Therefore because chartered accountants are much scarcer that factory workers they can command a much higher price in the market place.

Answer 4

This question answers itself the more choice an employer has the less he has to pay,someone will always do it cheaper But only in the manual jobs