Chinese Manufacturers Face Labor Upheaval
A sea change is happening in the Chinese manufacturing world. China, which built its economy on the back of its massive low-cost labor force, is now seeing an increase in labor disputes as workers demand higher wages and better work conditions. That is especially true in the province of Guangdong in southeastern China. Just across the border from Hong Kong, the area was ground zero for the country’s economic explosion when it first opened to the West in 1980. What is also interesting in this story is that the image they use (shown below) shows NVIDIA GeForce GTX 480 video cards being assembled!
Zhang has witnessed first hand the labor changes in Foshan. His company, Jiaofu Leather Products, has had to pay wages 15 to 20 percent higher since the start of the year; he also pays more for raw materials and charges less for the goods he sells to stay competitive. Salaries are 70 percent of his production costs. Zhang offers workers around $300 a month, plus accommodation and other benefits. He said factories are paying $180 a month in inland provinces, and workers prefer to stay close to home despite earning 40 percent less. “The labor market (in China) is composed of people who move from inland areas to industrialized parts along the coast,” said Joan Brugus, who manages many industrial companies in southern China through GChina, an investment fund.
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