Third World Countries

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Third World Countries

When countries are in a very bad economic situation, salaries may start dropping to prevent very high shortages. Gradual reductions will continue, until the country finances are in balance or improved to a lower level of shortages.

Lower salaries reduce the cost of education, the army, health and government. They also reduce tax income from the population but the drop in cost is more significant while income from corporate tax may become higher.

A drop in salaries will also influence all state corporations and the country may end up with a very low salary level that will in fact turn it into a third world country.

Such countries may become attractive to private corporations because of the very low salary level. Producing in such countries will become very profitable.

Automatic drop in salaries will only kick in if a country is in very high debt and no cash and its monthly loss becomes such that the country can run into bankruptcy.

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