New York Times: Chinese Labor, Cheap No More
... But while China’s industrial subsidies, trade policies, undervalued currency and lack of enforcement for intellectual property rights all remain sticking points for the United States, there is at least one area in which the playing field seems to be slowly leveling: the cheap labor that has made China’s factories nearly unbeatable is not so cheap anymore.
China has experienced sporadic labor shortages, which in turn have driven up its once rock-bottom labor costs. This trend is particularly evident in the weeks following China’s Spring Festival, or New Year, when more than 100 million rural migrants return to the countryside to spend the year’s biggest holiday with family. Coaxing those same migrants back into the urban work force has proven increasingly difficult. ...
... Numerous factors underlie China’s mounting labor woes. Until now the country has been able to achieve its stunning economic growth by shifting large numbers of farmers into nonagricultural jobs. Over the past several years economists have warned that China may be reaching the so-called Lewis Turning Point — the stage at which the rural surplus labor pool effectively runs dry and wages begin to rapidly increase.
At the same time, China’s population has been steadily aging, and by 2020 the nation will have more than 200 million people over age 60. Furthermore, rising living costs in urban China coupled with markedly improved conditions in rural areas are encouraging many would-be migrant workers to look for opportunities closer to home.
In addition to a shortage in the sheer number of available workers, China’s labor problems are further exacerbated by a shift in the quality and character of its work force. For the older generation, there is very little that a factory or foreman can dish out that seems too difficult to deal with, given that they witnessed, or grew up with parents who had witnessed, the nation’s rocky ride through the Communist Revolution, collectivization, the disastrous Great Leap Forward and the Cultural Revolution. These are the people who pioneered the model of migrant labor on which Chinese manufacturing has come to depend: long hours in substandard conditions, all for a fraction of what United States workers earn.
As illustrated by the recent headlines over working conditions at Foxconn, which makes components for Apple, there are plenty of migrant workers still living and working under that model. But by and large China’s younger generation is no longer willing to endure hardship without clear expectations that it is a temporary means to a more comfortable end.
According to the government report, a full 70 percent of rural migrants are now under 30. That means they are members of the so-called after-’80s generation — a euphemistic Chinese term to describe those who grew up during the nation’s economic revival and have thus never experienced real deprivation or acquired a taste for the chiku (“eating bitterness”) work ethic championed by previous generations.
In the past, China’s migrant workers were just thankful not to go hungry; today they are savvy and secure enough to start being choosy. Higher salaries, basic benefits, better working conditions and less physically taxing jobs are only the beginning of their demands, and for many factories, these are already too costly to be tenable. ...
Mark Perry links this story and several other stories about labor in China.
China illustrates the common economic development experience. Starting factories in pre-industrial societies leads to disruptions. What appear to us as "sweatshops" are frequently viewed as great opportunties by the people who choose them. That is how bad their daily existence is. And yes, those with governmental and economic power will often abuse the workers brought into industrial jobs.
But as more workers work longer at jobs, they become more proficient. They find themselves able to demand higher wages. As wages increase, they end up with more property. With more property, they have more at stake in having just governmental and economic systems. As they demand more just systems, producitivity increases leading to the creation of more business and more jobs. And upward the spiral goes.
I'm not saying we shouldn't be working against slave labor and that we shouldn't be pressuring corporations to behave in ethical ways. But too many activists see businesses in the these economies in purely static terms, believing that wages and conditions fixed unless someone strategizes to change them. It think it is often more helpful to see these firms on a trajetory of change, looking for ways to faciliate next steps toward a more just and prosperous society.