A friend who works at an international financial institution sends this thought:
China might be—probably is—beginning to experience something of a labor shortage. Unskilled peasants are still flooding into the cities, but not in the numbers they once were and, frankly, given the demographics of the country, probably won't again for another half century at least.
So wages are going up, even for mostly unskilled workers. Up by a lot, very quickly.
This is forcing some employers of very low-end labor in businesses with very severe cost pressures to relocate out of high-cost China to other places with bigger surpluses of peasants and other low wage people. The stable ones—Vietnam, Malaysia, Indonesia and India— and even the unstable ones—east Africa, Pakistan, Honduras, El Salvador.
But think about the scale of that problem. A country of more than a billion people that we once thought had an essentially unlimited
supply of ultra cheap workers just doesn't have as many as we thought a decade ago.
supply of ultra cheap workers just doesn't have as many as we thought a decade ago.
My very rough and inexpert, off the top of my head calculation is that all those places with remaining surpluses of ultra low-cost labor have, maybe, 20 or 25 years of supply on hand.
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