Factory Labor Shortage in China

“You can walk into any factory and get a job."

This statement by a 22 year old plastics worker would not be true in the current American economic situtation. However, as reported in the New York Times yesterday by Keith Bradsher, China is facing an growing labor shortage for several reasons. Factory wages have risen by as much as 20% in recent months, telemarketers are spending their time cold-calling random people to offer them jobs instead of calling customers, and some manufacterors are closing down production lines because of a lack of workers. The main cause for this shortage is that China once drained its interior population to find workers for the blossoming factories in the coastal areas. Now, after a major stimulus from the Chinese government to create jobs in the interior, many workers are not returning to the coast after going home for the Lunar New Year. Two other impacting trends are the rapid exspansion of higher education -- which decreases the number of people looking for factory jobs -- and the One Child Policy.

This shortage has the potential to impact Americans because of the possiblity of higher priced imported goods from China, as the minimum wage might be increased and many bonuses are being offered. Unfortuntely, in the past, higher wages have resulted in inflation for the Chinese economy. The article also reveals a decreasing regional cleavage between the coastal and interior regions. Where the coastal regions were once the economic center, more and more jobs are being created in the interior, often due to government projects like rail and highway construction. Social cleavages are also briefly discussed in the article as those normally accustomed to "white-collar," desk jobs are being forced to participate in more hard labor. However, the Chinese labor shortage could also be a positive factor for the Obama Administration in the renminbi-dollar negotiations.

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