- From China to Malaysia and Vietnam, Asian factory workers’ wages are on the up as manufacturers struggle to attract staff – especially the young
- Moving to Mexico, or ‘nearshoring’, may not be the answer to keeping costs down, either. And the trickle-down effect on prices has already begun
The same goes for a wide range of products Americans have grown used to splurging on, including clothes, TVs, furniture, and toys.
That’s because factories across Asia that have traditionally produced many of these goods are struggling to find workers, The Wall Street Journal reported. In response, many manufacturers are raising wages and offering other perks – including yoga classes, better cafeteria food, and subsidised kindergarten for workers’ children.
While this is good news for Asian workers, it could be bad news for American shoppers when factories raise prices to offset their rising labour costs. The days of cheap stuff could be coming to an end.
“For US consumers that have been used to having goods at a certain and relatively stable part of their disposable income, I think that foundation is going to have to be rejiggered,” Manoj Pradhan, a London-based economist, told the Journal.
Over the past two decades, cheaper overseas manufacturing costs in Asian countries like China have driven down prices for a variety of goods. But factory work isn’t quite as cheap as it used to be. In China, manufacturing workers’ wages have more than tripled over the past decade, and factory workers in Vietnam, Malaysia and Japan, have seen notable pay bumps as well.
The trickle-down effect on prices has already begun. Companies like the Barbie manufacturer Mattel, the toymaker Hasbro, and Nike are facing elevated labour costs in Asia that have contributed to price increases.
Experts attribute Asia’s factory labour shortage to a variety of factors. It starts with young workers, many of whom have little desire to work in the industry. Some have pushed back on the working conditions, while others are holding out for higher-paying jobs more in line with their education levels. China’s unemployment rate among workers aged 16-24 hit a record 21 per cent last quarter despite the fact many factories are in need of workers.
“After a while, that work makes your mind numb. I couldn’t stand the repetition,” former Chinese factory worker Julian Zhu told Voice of America News in November.
In 2001, Nike’s typical Asian factory worker was 22 years old. Today, the company’s average Chinese and Vietnamese workers are aged 40 and 31 respectively.
https://www.businessinsider.com/toys-clothes-electronic-prices-going-up-asia-worker-shortage-2023-8
