Anorak News | Why manufacturing jobs are leaving China

Why manufacturing jobs are leaving China

by | 30th, October 2012

YOU may not know that this is true: but it is. The number of manufacturing jobs in China is falling. The reason why is really very simple:

A 16pc annual rise in Chinese wages over the last decade has changed the game.

When you compound that up 16 percent a year becomes over 4 times in only one decade.

At which point we should all be very cheerful because if the jobs are leaving China then some of them are going to come back here, right?

Sadly, no, they won’t. For that rise in wages means not that it becomes cheaper to manufacture using UK labour. The Chinese are still only getting $6,000 a year or so for working in a factory. No, what’s happening to the jobs is that they are disappearing altogether: the work is being done by machines now, not people.

And that’s the Great Truth about “manufacturing jobs” and even Maggie’s evisceration of manufacturing. The UK didn’t stop manufacturing: manufacturing output kept on rising up until 2005 in fact. It is manufacturing employment which has fallen off a cliff. We’re just doing all of the work with machines now instead of people.

What’s going to end up happening is the same as what happened to agriculture. It used to be we needed 80% of the people in the fields to feed us. Now we need about 2%. Machines do all the work. Exactly that will happen to manufacturing.

All that offshoring, all that the jobs going to China, it hasn’t made the slightest bit of long term difference. The jobs were always going to go, the only question was whether they went to machines right away or off to some poor people for a couple of decades. They were always going to go though.

Posted: 30th, October 2012 | In: Money Comment | TrackBack | Permalink