The better off China is, the better off the rest of the world is

Whoever thought it could happen? The world's most populous country, with what seemed like a bottomless pool of low-skilled workers, is experiencing a labor shortage in its big manufacturing regions. David Barboza of The New York Times reports a shortage of workers at hundreds of Chinese factories, particularly in Guangdong and Fujian, the two provinces at the heart of China's export-driven economy.

At first glance, the result looks like a union leader's dream come true: Wages are going up, and workers are demanding - and getting - better working conditions and benefits. Minimum wages, which averaged $58 to $74 a month, excluding benefits, in 2004, have climbed about 25 percent over the last three years in Shenzhen, Beijing and Shanghai. Wages at larger factories operated by multinationals, which are typically $100 to $200 a month, are also rising.

But it is a far more complicated story than that, a textbook case of how the global economy has developed. During the last 100 years of industrialization, low-paying manufacturing jobs, primarily in the textile and apparel industries, have been the first rung on the ladder to development. America, Britain, and other rich countries all went through an inevitable - but painful - process as their economies grew. When wages in the lower-rung factories increased, manufacturing companies looked for cheaper labor.

In America, that meant moving from the Northeast to Southern states like the Carolinas. Then along came China, which jumped into the textile market with a bang: a seemingly endless supply of workers ready, willing, and able to make T-shirts, bras and other underwear for much less money than workers in South Carolina. Simply put, South Carolina was no longer poor enough.

China's move up the textile ladder will produce the same difficult changes that other countries have experienced - among them the persistent problem of what do with the workers whose jobs leave. But workers in China are seeing their wages and benefits increase, and China's progress bodes well for workers in poorer places like Cambodia, Bangladesh and Madagascar. Factory owners will do what they have always done in such cases: look for cheap labor elsewhere.

These jobs are no picnic. The women and men put in 10 hours a day, six days a week. Much of the time, they have to move far from their families to get work. To make ends meet, most live with five or six others in rooms that have no electricity or running water.

Sometimes it's a fight just to get paid. Factory owners and managers in poor countries sometimes delay salaries through incompetence. But the alternative is far worse. In the developing world, there is too often little work to be found. In Cambodia, young men spend their days leaning against their rickety moped taxis, hoping for passengers. In Ghana, young girls run up to cars at Accra's few stoplights, selling oranges for nearly nothing. For all the toiling and monotony, factory jobs in these countries can mean survival for a family of six, supported by the monthly paycheck from one sister who sews shirts for the Gap.

All this speaks to how woefully misguided it is for members of the U.S. Congress to respond to these pressures by trying to stop the flow of goods from China. The better off China is, the better off the rest of the world is - poor countries because they will get a shot at the jobs that leave China; rich countries because many more people over in China may finally be able to afford the expensive goods that are made in America.

Whoever thought it could happen? The world's most populous country, with what seemed like a bottomless pool of low-skilled workers, is experiencing a labor shortage in its big manufacturing regions. David Barboza of The New York Times reports a shortage of workers at hundreds of Chinese factories, particularly in Guangdong and Fujian, the two provinces at the heart of China's export-driven economy.

At first glance, the result looks like a union leader's dream come true: Wages are going up, and workers are demanding - and getting - better working conditions and benefits. Minimum wages, which averaged $58 to $74 a month, excluding benefits, in 2004, have climbed about 25 percent over the last three years in Shenzhen, Beijing and Shanghai. Wages at larger factories operated by multinationals, which are typically $100 to $200 a month, are also rising.

But it is a far more complicated story than that, a textbook case of how the global economy has developed. During the last 100 years of industrialization, low-paying manufacturing jobs, primarily in the textile and apparel industries, have been the first rung on the ladder to development. America, Britain, and other rich countries all went through an inevitable - but painful - process as their economies grew. When wages in the lower-rung factories increased, manufacturing companies looked for cheaper labor.

In America, that meant moving from the Northeast to Southern states like the Carolinas. Then along came China, which jumped into the textile market with a bang: a seemingly endless supply of workers ready, willing, and able to make T-shirts, bras and other underwear for much less money than workers in South Carolina. Simply put, South Carolina was no longer poor enough.

China's move up the textile ladder will produce the same difficult changes that other countries have experienced - among them the persistent problem of what do with the workers whose jobs leave. But workers in China are seeing their wages and benefits increase, and China's progress bodes well for workers in poorer places like Cambodia, Bangladesh and Madagascar. Factory owners will do what they have always done in such cases: look for cheap labor elsewhere.

These jobs are no picnic. The women and men put in 10 hours a day, six days a week. Much of the time, they have to move far from their families to get work. To make ends meet, most live with five or six others in rooms that have no electricity or running water.

Sometimes it's a fight just to get paid. Factory owners and managers in poor countries sometimes delay salaries through incompetence. But the alternative is far worse. In the developing world, there is too often little work to be found. In Cambodia, young men spend their days leaning against their rickety moped taxis, hoping for passengers. In Ghana, young girls run up to cars at Accra's few stoplights, selling oranges for nearly nothing. For all the toiling and monotony, factory jobs in these countries can mean survival for a family of six, supported by the monthly paycheck from one sister who sews shirts for the Gap.

All this speaks to how woefully misguided it is for members of the U.S. Congress to respond to these pressures by trying to stop the flow of goods from China. The better off China is, the better off the rest of the world is - poor countries because they will get a shot at the jobs that leave China; rich countries because many more people over in China may finally be able to afford the expensive goods that are made in America.

Whoever thought it could happen? The world's most populous country, with what seemed like a bottomless pool of low-skilled workers, is experiencing a labor shortage in its big manufacturing regions. David Barboza of The New York Times reports a shortage of workers at hundreds of Chinese factories, particularly in Guangdong and Fujian, the two provinces at the heart of China's export-driven economy.

At first glance, the result looks like a union leader's dream come true: Wages are going up, and workers are demanding - and getting - better working conditions and benefits. Minimum wages, which averaged $58 to $74 a month, excluding benefits, in 2004, have climbed about 25 percent over the last three years in Shenzhen, Beijing and Shanghai. Wages at larger factories operated by multinationals, which are typically $100 to $200 a month, are also rising.

But it is a far more complicated story than that, a textbook case of how the global economy has developed. During the last 100 years of industrialization, low-paying manufacturing jobs, primarily in the textile and apparel industries, have been the first rung on the ladder to development. America, Britain, and other rich countries all went through an inevitable - but painful - process as their economies grew. When wages in the lower-rung factories increased, manufacturing companies looked for cheaper labor.

In America, that meant moving from the Northeast to Southern states like the Carolinas. Then along came China, which jumped into the textile market with a bang: a seemingly endless supply of workers ready, willing, and able to make T-shirts, bras and other underwear for much less money than workers in South Carolina. Simply put, South Carolina was no longer poor enough.

China's move up the textile ladder will produce the same difficult changes that other countries have experienced - among them the persistent problem of what do with the workers whose jobs leave. But workers in China are seeing their wages and benefits increase, and China's progress bodes well for workers in poorer places like Cambodia, Bangladesh and Madagascar. Factory owners will do what they have always done in such cases: look for cheap labor elsewhere.

These jobs are no picnic. The women and men put in 10 hours a day, six days a week. Much of the time, they have to move far from their families to get work. To make ends meet, most live with five or six others in rooms that have no electricity or running water.

Sometimes it's a fight just to get paid. Factory owners and managers in poor countries sometimes delay salaries through incompetence. But the alternative is far worse. In the developing world, there is too often little work to be found. In Cambodia, young men spend their days leaning against their rickety moped taxis, hoping for passengers. In Ghana, young girls run up to cars at Accra's few stoplights, selling oranges for nearly nothing. For all the toiling and monotony, factory jobs in these countries can mean survival for a family of six, supported by the monthly paycheck from one sister who sews shirts for the Gap.

All this speaks to how woefully misguided it is for members of the U.S. Congress to respond to these pressures by trying to stop the flow of goods from China. The better off China is, the better off the rest of the world is - poor countries because they will get a shot at the jobs that leave China; rich countries because many more people over in China may finally be able to afford the expensive goods that are made in America.

Comments

Popular posts from this blog

IMF Executive Board Discusses the First Assessment of Eligible Countries under the Multilateral Debt Relief Initiative

Oil’s chaotic collapse deepens; stocks drop worldwide

Mapping Extreme Poverty Around the World A new report from the