July 3, 2005

A BIGGER SOUTH KOREA:

Chinese City's Allure Fades for Some Firms: With rising costs and tighter regulations in Dongguan, entrepreneurs start to look elsewhere. (Don Lee, July 3, 2005, LA Times)

DONGGUAN, China [...]

Chang Han Wen is having second thoughts. He came here from Taiwan in early 1991 when the area was still largely farmland, launching a shoe assembly line with 200 workers. He has since opened five factories, including three shoe plants that employ 3,000 people and produce 1.5 million pairs of specialty boots and high-end shoes a year for export to the United States and Europe.

But his sixth plant, a garment operation, sits empty. Chang has indefinitely postponed its opening, anxious about China's tense trade relations with the West and the threat of more quotas that would limit clothing exports. That's only part of his worries.

This year Dongguan's minimum wage jumped more than 27%. Even with the increase, employers are struggling with worker shortages. Government inspectors are making the rounds at factories, enforcing work-hour rules and pension contributions that officials paid little attention to in the past. Electricity is in short supply, as is fuel.

All in all, Chang says, things have gotten so much tougher that his next investment may be in Vietnam, where many Taiwanese have gone.

"For manufacturers here, the golden period has passed," he said.


The problem with basing your economy on cheap labor--the next up-and-comer is always cheaper.

Posted by Orrin Judd at July 3, 2005 8:53 AM
Comments

According to the article, the blue-collar workers are in tall cotton.

Doesn't seem like a big problem, more like a maturing economy.

Posted by: Michael Herdegen at July 3, 2005 12:17 PM

Michael,

The problem in China is finding workers skilled enough for even minimal-skill labor like one finds on a shoe assembly line. For all the PRC braggadocio and the Friedmanesque Chicken Little syndrome, most Chinese remain little more than medieval peasants. Thus, a country with tens of millions of itinerant workers moving from place to place looking for piecework can have a labor shortage at the same time.

The average Vietnamese has more exposure to some form of modern society than his Chinese counterpart and would probably do a better day's work.

Posted by: bart at July 3, 2005 1:55 PM

Mining for workers: State's booming industry digs deep for answers to labor shortage
Gargi Chakrabarty, July 2, 2005
Rocky Mountain News

[Colorado's] mining and natural resource sector employed 15,900 at the end of May, the highest in a decade and a 12 percent jump from a year ago. More jobs are on the anvil as new mines are explored and dormant ones are resurrected.

The boom highlights a long-overlooked dilemma: There aren't enough skilled miners in this generation to fill the growing number of jobs.

For one, the handful of trade schools in the state that train electricians, diesel mechanics, heavy equipment drivers and underground maintenance workers can't keep pace with demand.[...]

Average salaries of from $68,000 to $87,000 (for coal miners), health benefits, life insurance and vacations are not enough to lure people to this grime-and-dirt work. Never mind that most mines don't even require a high school diploma. [...]

"Hiring experienced miners for all our hiring needs is not possible," said James Cooper, executive vice president of Oxbow Mining LLC, which owns the Elk Creek mine in the North Fork Valley.

***

The problem in America is finding workers skilled enough for even minimal-skill labor like one finds in a mine. For all the U.S. braggadocio, most Americans remain little more than medieval peasants. Thus, a country with eight million unemployed workers can have a labor shortage at the same time.

Posted by: Michael Herdegen at July 4, 2005 9:16 AM

mh: so you are saying that the average educational level of an american is the same as that in the prc ? i don't know one way or the other, so will take your answer without argument.

Posted by: cjm at July 4, 2005 11:13 AM

cjm:

No, no.

I was just tweaking bart for his knee-jerk prejudices.

The average American is far more educated than the average Chinese. However, most Americans are overqualified for the jobs that they actually perform, and most would do just as well without any education after the 10th grade, just training in their specific job field.

The suggestion that it takes a person of special education or intelligence to be trained to work on an assembly line is nonsensical, as American and English history prove.

Posted by: Michael Herdegen at July 4, 2005 1:35 PM

mh: ok. agreed.

Posted by: cjm at July 4, 2005 2:59 PM

Michael,

As American and other foreign companies that have opened in China have found, the quality of work is just awful. The workers lack even the minimal discipline of American factory workers. Getting them to show up and stay on the job after lunch has proven quite difficult. It is very different from being a farmer in a small village with no running water.

Also, Chinese unemployment is huge. American is almost all the result of people choosing not to work, preferring lavish benefits, or working off the books, instead.

Posted by: bart at July 5, 2005 7:29 AM
« EVERY GENERATION GETS IT WRONG: | Main | ACID REIGN (via Robert Schwartz): »