Wages are rising across Asia; social networks among the causes

The good news for workers across Asia is that their salaries are going up.  The bad news for toy companies, retailers and consumers is that prices are going up as a result. 

A recent New York Times article, “As China’s Workers Get a Raise, Companies Fret,” quotes Bruce Rockowitz, the chief executive of Li & Fung, “…that the company’s average costs for goods rose 15 percent in the first five months of this year compared with the same period last year.”

Those companies looking to other Asian countries like Vietnam, Bangladesh and Indonesia are finding that wages are increasing there as well, sometimes faster than in China.   Here are a few of the reasons:

  • There is now more work in Asia than there are workers.  When there is a shortage of workers their wages go up in order to attract the available pool
  • Social networks allow workers in one country now know what workers in another country are making.  This in turns increases worker demands. 
  • Workers (particularly in China) are no longer willing to migrate a thousand or more miles to work.  They simply are no longer willing to leave home.

So, will manufacture return to the US and Europe; not according to Mr. Rockowitz of Li & Fung.  Here is his response when asked that question:  “The Western world does not have the work force to do this kind of business…”

Do you agree with Mr. Rockowitz?

3 thoughts

  1. When Mr. Rockowitz of Li & Fung suggests that the West no longer has this type of workforce to do this type of work. He is right only in the near term but when you consider the long term, his statement may prove to not be so accurate. With Asia’s standard of living rising rapidly there will eventually come a time when we could see these manufaturing jobs return to Western nations. The global financial malaise can be directly attributed to decades of misguided Western fiscal, economic, energy and social policies. All of the EU nations are in debt and along with Greece many more are barely hanging on by a thread. America is in no better shape, note the current fiscal crisis which is the direct result of decades of failed progressive policies that focus on social engineering often at the expense of private industry. Indeed it is the reason toys, apparel and other consumer items are made in China, India, Vietnam and elsewhere in SE Asia. The situation in the West will need time to be straightened out and their enormous accumulated debt will cause near unthinkable pain. It is always darkest before the dawn so before that turn around (if it happens) the West will more than likely need to turn to all wealth generating tools to rebuild their economies. And that will include taking on the type of work Mr. Rockowitz says the West does have the workforce to support.

  2. I dont agree that SOcial networks are alone to blame, Its the cost of living in cities which has gone tremendously high..In any industrial city u never earn enough to enhance ur standard of living. The rentals have gone crazy due to spike in property prices..The Food inflation is at an all time high…This is resulting in worlers going back to small town where they belong to and thus crunch in manpower availability… There are still places in Pakistan India Bangladesh where you can get people to work for $20-$30 monthly but there will be no electricity no water no roads, as a result industries are compelled and justified in paying $200 in cities. It had to happen with world becoming samller and smaller

  3. I’ve long held the belief that Americans, by and large, are not afraid of an honest day’s work, and are able to do any job they set their minds to. Hopefully, that theory will be tested sooner rather than later. I’d be honored to buy a G.I. Joe figure that says MADE IN THE USA on the back. Seems like it should, huh?

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