How do real wages typically affect the level of exports in an economy?

Real wages refer to the purchasing power of workers' earnings, adjusted for inflation. When real wages increase, workers have more money to spend, which can lead to higher demand for goods and services. In an economy where workers can buy more, businesses may focus on producing more for local consumption rather than exporting, as they see a chance to meet domestic demand. For example, if a country raises its minimum wage, workers might spend more on local products, reducing the emphasis on exporting goods. However, if the higher wages lead to improved productivity and better-quality products, this can also make exports more competitive, balancing the effects.