Pay Rises 10-15% in China
Chinese wages are on the rise. No reliable figures for average wages exist; the government’s economic data are notably unreliable. Factory owners and experts who monitor the nation’s labor market say that businesses are having a hard time finding able-bodied workers and are having to pay the workers they can find more money. All this due to China’s one child policy.Chinese companies are already passing along some of their higher costs to overseas customers. Prices for goods from China, after years of gradual decline, have risen 1.2% since February, according to the Labor Department.
Chinese companies and contractors are also passing on the cost of the rising value of their currency, the yuan, up 8.8% against the dollar in the last two years. For decades, many labor economists said that China’s vast population would supply a nearly bottomless pool of workers. So many people would be seeking jobs at any given time, this reasoning went, that wages in this country would be stuck just above subsistence levels. As recently as four years ago, some experts estimated that most of the perhaps 150 million underemployed workers in the countryside would be heading to cities. In interviews, factory executives across the country complained of being forced to give double-digit raises in order to find and keep young workers at all skill levels. Now those shortages have spread to factories up and down the Chinese coast. Who’s the most effected? Plant owners’ refusal to hire blue-collar workers over 35 or 40 is colliding with the demographic reality of China’s one-child policy. The number of workers in the 20-to-24-year-old range is already shrinking as more of them go to universities instead of entering the work force after high school. Rising overall incomes in China also affect American inflation indirectly. Higher incomes in this country contribute to soaring demand by Chinese for cars, air-conditioners and other energy-consuming products.
