http://www.huffingtonpost.com/2010/0...30.html#s96150
Why The END Of Cheap Chinese Labor Is Near
Foxconn Suicides
After the suicide deaths of ten workers (and three attempted suicides), Foxconn, the world's largest contract maker of electronics and a large producer of Apple products, said that within three months it would double the salaries of many of its assembly line workers, reports the New York Times.
China's State-Owned Media Speaks Out
Long considered the mouthpiece of the Chinese Communist Party, China's state-owned media has called for a "new proletariat revolution," says the Business Insider. In China's state-owned newspaper, the People's Daily, columnist Li Hong writes:
Higher Wages At Hyundai
When 1,000 workers at a Hyundai parts factory in Beijing went on strike on May 28th, management quickly promised them a "15 percent pay rise soon and a further 10 percent rise in July," reported the Global Times, a daily Chinese newspaper. The next day the workers returned to their jobs.
Honda Strikes
Although Honda offered its Chinese workers a 24 to 32 percent pay increase, and a Honda spokesman in China previously said operations had resumed, workers have staged another walkout at a Honda parts factory in southern China, reported the Times.
Proliferation of Social Networks
Workers were able to organize the Honda strike by using social networking tools like Internet chatrooms and a popular Chinese instant messaging service called QQ, says a Reuters report.
Beijing's Minimum Wage
According to the Global Times, on June 6th the Beijing municipal government announced it would raise its minimum wage 20 percent to about $140 a month. Thirty provinces or municipalities have raised or will raise their minimum wage this year, the paper reports.
China's "One-Child Policy"
China's "one-child policy" has reduced the birth rate, and resulted in a labor shortage that is pushing up wages. The country's under-40 workforce has fallen by 20%, according to the Financial Times, and economists predict that the number of Chinese between the ages of 15 and 24 will likely drop by one-third in the next 12 years. Fewer workers mean more collective bargaining power.
China's Economic Stimulus Spending
Also contributing to the labor shortage is the Chinese government's half-trillion dollar stimulus program that has created jobs in the rural areas of China. Millions of migrant workers have left the factories in China's coastal cities, and returned home to find jobs waiting for them in China's rural interior, according to a New York Times report.
The 2008 Labor Contract Law
Enacted in 2008, China's labor contract law requires employers to give their workers written contracts. It also limits overtime, requires one month's severance pay for each year worked for laid-off employees and sets minimum wages, according to the New York Times.
Foreign-Invested Capital
As the Financial Times points out, China's supply of cheap labor was "a means, not an end," and it appears to be coming to an end. Once used to lure foreign investment, low wages don't benefit China's domestic economy like they once did. Twenty years ago, foreign multinationals that wanted to take advantage of the country's cheap labor market had to enter joint ventures with the Chinese government. These days, foreign companies are able to own 100% of the capital they invest in in China.



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