Saturday, March 17, 2012
China's Wage Hikes Ripple Across Asia
The article reports that more and more asian governments across Asia now are increasing wages as a way to prevent outbreaks of labor unrest by pressing businesses like increasing the minimum wage level. Malaysia has approved the country's first-ever minimum wage to be imposed soon. Other regions in the region from Thailand to Indonesia follow efforts by China over the past two years to boost pay after years of widening gaps between rich and poor. All these efforts raises the specter of higher manufacturing costs for global companies and the products they sell world-wide.
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5 comments:
This was a nice article to read and good to see that workers rights are increasing in these countries that were considered 3rd/2nd world countries. This change in workers rights and wages reminds of those in America in the early 1900s where the government started to side more with the workers to earn more fair wages and rights.
This is interesting after listening to an NPR broadcast on Cambodia and its working conditions. The working conditions there are based on those in France and the wages are higher than those of teachers and police officers; however, the country is suffering because companies are pulling out and relocating in other nations that are cheaper to produce in. If other Asian nations were to also have higher wages, Cambodia would once again become more interesting to companies wishing to export.
While I agree that countries may be scarcer for near completely-favorable production policies, I don't think most companies will be unable to find lands unwilling to deal with low payment. Although the "3rd world" countries may adjust slightly, it is too idealistic to see this article as a trend that will be maintained throughout developing regions.
Improvement in wages in China is a good thing for local workers, especially for workers in the manufacturing factories. The rigid working situation for workers in those factories has become a political problem in coast provinces. However, when cost of labor increases, the Chinese economy and employment situation can be hurt, as the GDP growth rate of the last year is lower the 8%.
I agree with the opinion upon that the increasing minimum wage in China could influence the economic growth in China. The investing countries could possibly transfer their plants to other countries with lower labor cost such as India and Vietnam.
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