Imagine two companies. A company pays its workers £2 and competes with B company that pays its workers $2. Both buy materials on the international market and both sell end products there. Whichever currency is weaker effectively pays less in wages.
The skill of the workforce isn't directly linked - its more a product of the education system and the training schemes within the company
>>1062251 say you're producing suits in Bulgaria. You need X bulgarian leva to buy linen, Y leva for equipment amortization and upgrades, and Z leva for personnel. Let's say a total of 500 BGN for a suit, which you would export abroad for 300 USD.
Then, the dollar gets more expensive, or the lev becomes cheaper, whatever, and suddenly 500 BGN is equal not to 300 USD, but to 200 USD.
You are now equally happy to export suits for 200 USD, compared to selling them for 300 before.
Of course, everything is a bit more complicated, since you might import materials from abroad, and the supply chains are hellishly complicated and intertwined, but that's the gist.
Currencies are paired relative to each other. If the Yuan takes a shit and loses half its value relative to the dollar, the one redeeming thing about it is that the goods they produce can now be sold for half as much as they used to
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