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back to article Shenzhen wage hike causes supply chain jitters

Chinese tech hub and boom town Shenzhen is set to increase the minimum wage of workers there by 13.3 per cent in early 2013, causing a few sweaty palms in the technology supply chain. Shenzhen and the wider Pearl River Delta area in southern China is one of the most concentrated technology manufacturing hubs in the world. …

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Anonymous Coward

In the UK £48 a day or £1300 a month minimum with no benefits, the NHS and before tax. So definately catching up. Sarcasm?

But the jobs won't be moving any day soon.

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Citation...

I am very dubious of the cousin in this article that salaries and benefits are largely clawed back by employers. I suppose it does happen in some cases. However, the Shenzhen job market is very much a buyers market. Any perceived trickery like that results in workers abandoning your plant for one down the road with better net salaries.

The' slave labour' meme makes for good stories, but it's dreadful journalism.

A more accurate story would conclude that factory workers in Shenzhen do pretty well, given the cost of living, though are starting to be squeezed a bit by inflation.

However, that story would hko against the

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Anonymous Coward

Cost of Living.

"The irony, of course, is that despite these wage hikes, workers in plants such as Foxconn still barely have enough to live on once accommodation and living expenses are deducted"

Just like many in the UK & US then?

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Bronze badge

Umm

Not entirely sure why a 14% pay rise should worry anyone. Especially a nominal, pre-inflation, one.

Real wages, that is post-inflation, for Chinese manufacturing workers have been rising at 14% a year for more than a decade now. That's why they're four times higher now than they were in 2000.

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Meh

Still no doubt there will be strong opposition to the wage hikes from industry leaders (in Bentonville and Cupertino) and the local authorities will be forced to back down.

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Stop

Forget it Jake, it's China.

"Forced to back down"? Bentonville and Cupertino may state their objections, but the only power they have is to take their business elsewhere. This is not the United Fruit Company fucking around with Latin American countries too weak to defend themselves. This is a price hike in the 2nd most powerful state in the world. The only people who can force the Shenzhen folk to back down are the crew in Beijing, and they're pretty hands-off with local economic matters.

Anyway, I'm an "up the workers" sort of guy, so I approve of the wage rise. More spending money is good.

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Re: Forget it Jake, it's China.

I'm trying to find the source of the materials that Beijing was trying to implement half-decent (or probably only quarter-decent) environmental regulations, but was stopped by same objectors who did just that, threaten to take their business to countries without such an "onerous" burden, in which case it will be the United Fruit Company vs weak (and corrupt) governments. But agreed, it's good to see that in Shenzhen at least, they're trying to break out of this "race to the bottom" mentality for wages and conditions.

So now the question is... will the United Fruit Company see this as (a) a reason to pull out of Shenzhen and move to, say, Indonesia or even Chongqing, or (b) an excuse to hike retail prices of orders of magnitude higher than the increased wage cost?

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Good for Shenzhen !

The people who make our toys are well worth higher wages - and even if rising wages will lead to the movement of some production from China's southeast to the country's western and northwestern regions, such a shift will be of benefit to these relatively undeveloped areas. As noted in the article, while some manufacturers will indeed investigate the possibility of moving to other countries like Vietnam, Indonesia, etc, where prevaling wages are much lower than in China, the superior infrastructure in the latter will most likely limit such moves....

Henri

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ODM?

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