China’s pricey workers

last updated 8 January 2015

Michelle Dammon Loyalka

The New York Times

China’s proverbial cheap labor “is not so cheap anymore,” said Michelle Dammon Loyalka. For years, China achieved phenomenal economic growth by shifting millions of rural migrants to manufacturing jobs in cities, where they worked long hours for low wages. But there are signs that scheme isn’t working anymore. This year, urban factories have had a hard time coaxing workers back to their posts after the annual Spring Festival, when more than 100 million people return to the countryside. The holiday fell this year in late January, but cities like Beijing, Shenzhen, and Guangzhou are still short hundreds of thousands of workers, despite employers’ offers of sizable bonuses and higher wages. Many former migrants are now seeking opportunities closer to home, and the growing shortage of urban workers will drive up wages further. Seventy percent of migrants are under the age of 30; having grown up in the boom years, they’re “savvy and secure enough to start being choosy” about employment. This is uncharted territory for a country that owes its revival to a large, cheap labor force. And it means “America might be back in the manufacturing game sooner than expected.”