China Sets A Minimum Wage: Send For The Tibetans
IN Guangdong, China, workers will get a new minimum wage from Jan 1. Wages could go up by 20 percent. Will prices for goods go up? Or will China just make the stuff you buy somewhere else?
For decades, Guangdong province and China’s Pearl River Delta have been at the heart of China’s economic rise. And while larger manufacturers and state-owned companies have contributed greatly to the boom, smaller and medium-sized private firms have also helped propel China to become the world’s second-largest economy.
As wages, raw material costs and other costs rise, those smaller businesses say they’re being cut out of the mix.
Lau said at the current rate, he expects 30 percent of factories in Guangdong to reduce production or close down this year, in the wake of a minimum wage increase last year. Another 18-20 percent pay rise would decimate the industry.
But Crothall is less than sympathetic, noting that although China’s inflation rate has slowed somewhat, China’s workers still need more to get by.