In addition, higher per capita income alters consumption habits, mainly in the form of more and better foodstuffs (e.g., China currently consumes almost 55 kilograms of meat per year per person, while 10 years ago it was consuming 40 kilograms and, in 1990, only 28 kilograms). Agricultural commodities also show low income elasticity.
But then, the real value of wages was eventually eroded by inflation and depreciation. In the euro zone the second, corrective step, is not going to happen. It is crucially important to recognise that the old automatic stabilizer of real wages – depreciation of the exchange rate – has been put out of action (and for good reason).