Bye-bye Cheap, Chinese Labor

With implications both local and global, minimum wages and prices are on the rise in Guandong province, a region that’s been at the center of China’s manufacturing and economic rise. Government goals include moving beyond the low-end manufacturing that has long characterized Chinese industry and dealing with mounting inflation while keeping unemployment low. But these might be contradictory goals. Chinese small-business and factory owners are protesting the mandatory wage increase, which increases their expenses at a time when other costs are also on the rise. Companies are looking to poorer countries for labor, but the scale of the labor force in neighboring nations offer no quick alternative to China’s. The wage hikes signal the end to a large, inexpensive labor force at the world’s beck and call – as well as affordable Chinese-made products. – YaleGlobal