I live in a developing country now, Thailand, and how all that works out with low pay rates is clearer taking all the background into account. It's not as if Chinese workers or Thai lower class are earning $250 per month and trying to live in the US or Europe on it, where it would barely cover either food or housing, but certainly not both. Of course they are poor, but it's not quite that simple. Oddly that is about the Thai minimum wage for unskilled labor, but some people probably only earn $200.
It's not as simple as their living costs just being lower either, but they are. People would live in circumstances that would be unfamiliar in the West, with less consumption of mass produced goods, without pre-prepared foods, without air conditioning (it's heat that is offset rather than cold here), without a washing machine or dishwasher, etc. All of that is coming though; it's a transition, so even poorer families would embrace those aspects over time. Most of the population have televisions and cell phones; almost all electricity.
It was interesting visiting Laos, further behind the curve, just getting electricity when we first visited nearly a decade ago, and seeing satellite dishes next to grass huts. Part of that seemed so clearly positive, but it made you wonder what could be lost from it. We would see families gathered together around fires in the evenings in poorest villages, then in lower income neighborhoods relatively modern housing with electricity, but still with a fire outside, and people gathered, then in other places just no one, surely replaced by television screens inside instead, at some point with people chatting remotely on cell phones instead of that.
The interesting part to me isn't the development curve path but instead what happens once a country transitions through some of that. As infrastructure, health care, living conditions, etc. improve standard wages do as well, and the supply of inexpensive labor shifts, and new factories are built elsewhere instead. Of course Toyota can build cars in Malaysia instead but a tea plantation is a different thing; supply and demand pressures require resolution at the individual growing areas.