Xinhua recently reported that, for the past several years, the shortage of workers in China’s developed regions has been troublesome and may become a big problem after the Chinese New Year. Workers from inland typically go home for the New Year’s celebration. Many of them choose not to go back to their previous work largely due to the fact that they have found more and more opportunities in many under developed regions. The increase in the cost of living in those large cities has made it hard to justify the return unless a significant pay increase is offered. Based on the independent research of several companies, it is not unusual for a 20 percent base salary increase to be required to retain workers. The small towns in Mid-West China are becoming more and more attractive to workers. Many workers also decided to work near their homes in rural villages in order to stay closer to their family members, especially the kids. Another important factor in the worker shortage issue is the lack of experienced workers. The new generation workforce is getting younger and the quality of education they receive has been, on average, fairly low. Meanwhile, the new workers expect a much higher pay level than their parents. The report concluded that all these factors have added to the cost of labor in China’s manufacturing industry.
Source: Xinhua, February 15, 2014