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For a long time since the reform and opening up, China’s labor wages have been at a low level in the world’s impressions. Therefore, China has a greater appeal to the world's manufacturing capital, and China has become a depression for international capital flows. Foreign investment and exports play an indispensable role in China's rapid growth. It can be said that low labor costs are a major feature of the Chinese economy, and the labor dividend is China's biggest dividend. However, in recent years, this situation has quietly changed.
Enlightenment from the withdrawal of Japanese-funded enterprises
From many parts of China, including the southeastern coastal areas, as well as the northeast and central and western regions, there are indications that the growth rate of foreign capital utilization is declining, foreign capital is being withdrawn in some countries, and the difficulty of attracting investment in some areas of the country is increasing. The most obvious performance was the divestment of Japanese companies.
Japanese companies began to withdraw from mainland China in 2006. There are political reasons for this. For example, since the Diaoyu Islands issue, Japan has been looking for emerging markets to replace China. Prime Minister Abe played the "Abenomics" card and conducted monetary diplomacy, including visits to India and Southeast Asian countries, and signed cooperation. The agreement provides a platform for Japanese companies to withdraw from China and move to India and Northeast Asian countries. Of course, there are also domestic political anti-Japanese political tendencies, and occasionally the impact of boycotting Japanese goods.
The main reason for the divestment of Japanese-funded enterprises is that in the economy, the focus of capitalist investment is making money, and sometimes they are not political. The global financial crisis is an important incentive for Japanese companies to withdraw their capital. The financial crisis has caused the Japanese economy to sink sharply. The Japanese economy has been in a downturn for many years and has been stumbling since the 1990s. The house leaks and slantes even the rain. The 2008 financial crisis has once again brought the Japanese economy into a quagmire, and GDP once experienced a double-digit negative growth in a quarter. The sluggish domestic economy has directly affected the operation and survival of Japanese-owned overseas companies. Therefore, the impact on China’s investment will be reduced in a short period of time, and funds will flow back.
In fact, the reason for the divestment of Japanese-funded enterprises is the increase in labor costs in China. Many scholars hold this view. Lu Wei, vice president of Dongbei University of Finance and Economics, believes that although China's labor costs can still be classified as lower in the world, there is no longer a clear competitive advantage in Asia. The labor costs of some Southeast Asian countries are already lower than those of China. . These countries have already engaged in strong competition for China in attracting foreign investment and obtained some investment from Chinese divestment enterprises.
The author also believes that China has no competitive advantage over foreign capital due to environmental degradation and labor. The divestment of Japanese-funded enterprises reflects the sensitivity of international industrial transfer to labor costs to some extent. 20 years ago, Japanese companies transferred their production lines to China, because Japan’s labor costs were 20 times that of China; so why now transfer to Southeast Asia and India? Because the wage level of the Vietnamese labor force is one third of the coastal area in southeast China. Obviously, due to the increase in labor costs, the Chinese market is no longer as unparalleled and irreplaceable as Japanese capital and other countries' capital. The author visited Vietnam several years ago. From Haiphong to Hanoi, it is about 100 kilometers away. There are dozens of Japanese-funded enterprises on both sides of the road.
In fact, Korean-funded enterprises have experienced large-scale divestment in Shandong and other places before Japanese-funded enterprises. US-funded enterprises also began to withdraw their capital in the later period of Obama, and European companies followed suit and began to transfer some production capacity to Southeast Asia and India. In 2012, Nike and Adidas moved some of their factories in China to Southeast Asia, which had a great news effect and caused many concerns.
Constantly rising wages
The increase in labor costs is mainly reflected in the increase in wages, especially the increase in wages for migrant workers. In recent years, the wage level of Chinese employees has undergone a process of substantial improvement. In 1995, the average wage of employed persons in urban units in China was 5,348 yuan, which was 10,834 yuan in 2001 and 41,799 yuan in 2011. The number in 2011 was 7.82 times that of 1995, which was 3.86 times that of 2001, with an average annual growth of over 10%. The price growth rate in the same period.
According to the research of the research group of the Development Research Center of the State Council, the average wage of employed persons in urban units nationwide increased from 10,834 yuan to 36,539 yuan in 2001-2010, with an average annual growth rate of 14.6% and an actual growth rate of 12.4%. In terms of industries, the per capita wage growth rate of mining industry is the highest, the average annual growth rate is 16.7%, and the average wage has increased from 9541 yuan in 2001 to 44196 yuan in 2010; the per capita wage of manufacturing industry has increased from 9891 yuan in 2001 to In 2010, 30,916 yuan, the average annual growth rate was 11.1%, the growth rate was lower than the national average; the per capita wages of electricity, gas and water production and supply industries have been maintained at a high level, but the average annual growth rate is slightly lower than the national average. The average level is 12.0%. The per capita wage of the tertiary industry increased from 1,1894.4 yuan in 2001 to 40,738 yuan in 2010, and the average annual growth rate was 12.8%, higher than the national average. At the same time, the wages of agricultural laborers also rose rapidly. The wages of wheat, soybeans, rice and corn workers increased by more than 9% annually, and the wage growth rate of Apple employees reached 11.3%.
The phenomenon of labor shortages that began in some parts of the southeastern coastal region in 2004 indicates that the price of labor resources has started to rise. The Labor Contract Law promulgated in 2007 and the Social Insurance Law implemented in 2010 have increased the rights and interests of workers and further increased labor costs. In 2011, a total of 24 provinces across the country raised the minimum wage, with an average increase of 22%. By the beginning of 2013, the minimum wages for all provinces in the country are as follows. Increasing the minimum wage standard has led to a rapid rise in labor costs, and the cost of labor for enterprises has continuously increased. So how about the rise in labor costs? The author roughly analyzes that labor costs increase by about 10%-15% annually.
From "the tide of migrant workers" to "the shortage of migrant workers"
Analysis of the reasons for the current rise in labor costs cannot but ignore the changes in the supply and demand relationship in the Chinese labor market.
In the 1990s, every year before and after the Spring Festival, there was a word that was particularly eye-catching, that is, "the tide of migrant workers." In the middle of the first decade of this century, a new and distinct vocabulary emerged, that is, "labor shortage." According to the report, after the Spring Festival of the previous year, the operating rate of Wenzhou's garment enterprises was less than 40%. Why? No workers!
A new era has arrived. An economic term was fulfilled in China.
This new era is the era of labor shortages. Cai Wei, director of the Institute of Population and Labor Economics of the Chinese Academy of Social Sciences, pointed out that during the "Twelfth Five-Year Plan" period, China's economy will undergo relatively scarce changes in capital and labor factors. In the past, the price of cheap labor factors will rise. This is evidenced by the “labor shortageâ€. The employment survey of enterprises in the Research Office of the All-China Federation of Trade Unions has found that the proportion of rural migrant workers in the eastern region has rapidly declined, and the supply of skilled workers is in short supply. Skilled workers are generally difficult to recruit. The imbalance between labor supply and demand areas directly leads to the first increase in labor costs in the eastern coastal areas.
This economic term is "Lewis Turning Point." "Lewis Turning Point" comes from the theory of the 1979 Nobel Prize in Economics and the American scholar Lewis. That is, the turning point of labor surplus to shortage means that with the gradual transfer of rural surplus labor to non-agricultural industries, rural surplus labor gradually decreases and eventually exhausts. Lewis believes that there is a large surplus of labor in the rural areas of developing countries. The marginal labor productivity of these surplus labors is zero. The transfer of these surplus labor from rural to urban areas and from agriculture to industry does not affect agricultural output because of the marginal labor rate. It is zero. However, after the transfer to cities and industries, the output is greater than zero, so the process of transferring the rural surplus labor to the towns and industries is the process of accelerating the development of the country. The driving force for development comes from urbanization and from the transfer of rural labor. Once the rural surplus labor in this economy reaches a critical point, the critical point is that the marginal productivity of rural labor begins to be greater than the marginal productivity of urban or industrial labor. Indeed, although China's labor resources are very rich, the phenomenon of labor shortage that began to appear in some southeastern coastal areas in 2004 shows that the price of labor resources has begun to rise, and now the labor force is gradually shifting from unlimited supply to partial shortage. Now, the situation of oversupply of labor has ceased to exist, and the balance between supply and demand has arrived. Due to the rapid expansion of domestic demand, the accelerated development of the service industry, and the continuous advancement of urbanization, China's labor market will enter a substantial shortage in the next few years.
Another important feature of China is the aging. It is predicted that by 2030, China’s elderly population over 60 years old will account for 30% of the total population. The United Nations estimates that the Chinese labor force will enter negative growth in 2017 (the population will enter negative growth in 2032). At present, the working-age population of less than 60 years old and less than 60 years old is more than 900 million. Since 2013, China's labor resources and the working-age population are gradually declining. Cai Wei and other scholars also believe that the growth of China's working-age population has slowed significantly. At present, the number of labor required for urban areas is mainly met by rural labor transfer. In the next few years, the number of working-age populations transferred from rural areas will not be enough to compensate for the needs of cities.
Market micro-subject reaction
Enterprises, especially small and medium-sized enterprises, are particularly sensitive to changes in the supply and demand relationship in the labor market and the increase in labor costs.
During the Spring Festival, the author talked with a young man working in a private enterprise. He is less than 30 years old and is from the mountainous area of ​​Liaodong. After studying in a vocational training school for two years, he has been working in a machine and enterprise for 7 years. When it comes to wages, he is still very satisfied. He said that when he first entered the factory 6 years ago, his monthly income was more than 800 yuan. After continuous salary increase, he has now risen to 2,300 yuan. At the end of the year, the company will also issue bonuses according to work performance. In the previous year (2012), it won a year-end award of 5,000 yuan. Last year, the factory operating situation was general, and it also got 2,400 yuan. Such a typical industrial worker (unlike the special industry, Shenyang has a "golden card month", serving the month, can earn more than 7,000 yuan a month), and the annual income is almost 30,000 yuan. We are here to give him a calculation, and the annual salary has increased by more than 10% every year.
Of course, for the salary increase, in different positions, the feeling is different. The directors and managers of small and medium-sized enterprises have sighed that wages have risen year after year. Although the magnitude is not large, in order to retain workers, they have to go up and have a long stream of water. Now the cost of labor in enterprises is rising at a rate of 10% per year. It is not a development. The problem is that the pressure to survive is getting bigger and bigger. For low-end manufacturing that “produces 100 pairs of socks to make a profit of 1 dollarâ€, the salary increase directly reduces the profit margin of the company. The impact of rising labor costs on China's export-oriented economy is more direct. The rise in raw material prices and labor costs will constrain the international competitiveness of Chinese products, and the export situation is not optimistic. According to a recent survey report released by the China Entrepreneur Survey System of the Development Research Center of the State Council, nearly 80% of business operators believe that the increase in labor costs is one of the biggest challenges facing enterprises in the future.
Policy changes have also put tremendous pressure on companies. The "Labor Law" has been implemented. The "five insurances and one gold" of the employees must be on, and the private enterprises can no longer use the probation period as an excuse to evade the "five risks and one gold" constraint. Originally, migrant workers did not need to pay pension insurance, medical insurance, maternity insurance, work injury insurance and unemployment insurance, while local employees mostly participated in local rural cooperative medical insurance. The burden on enterprises in this area is not heavy. Now, companies are required to pay “five risks†for their employees. This extra expense is indeed a big burden for small and medium-sized enterprises.
Also, some business owners report that the rise in labor costs is not only a question of wages, but also a lot of hidden costs. Sometimes these "labor remuneration" acts as much as wages. In order to meet the requirements of employees, the company's investment in employee education, training and corporate culture construction is also increasing.
The rise in labor costs is a "double-edged sword"
The rise in labor costs is not a short-term, partial phenomenon, but a long-term, global phenomenon. From a long-term trend, the rise in labor costs has only just begun. The hourly wages of Chinese workers are only 1/17 of that of the United States. In particular, pension coverage is still very low, and migrant workers are often excluded from the pension system. Benefits such as basic medical insurance that are taken for granted by developed countries are usually low in China. Therefore, there is still a lot of room for China's labor costs to rise in the future.
The rise in labor costs is a stage that cannot be avoided in China's economic development process. It has a dual role in economic growth. On the one hand, rising labor costs provide more intrinsic motivation for China's economic growth, which is conducive to raising the wage income of residents. If residents are swollen, they can expand consumption, which is the most fundamental way to stimulate domestic demand; Level, narrow the gap between the rich and the poor; help reduce the excessive dependence on low-end product exports and foreign investment, promote faster and better economic transformation; help enterprises to actively adjust the industrial structure and enhance independent innovation capabilities.
However, on the other hand, rising labor costs are also a “double-edged swordâ€. We are faced with a dilemma: accelerating the pace of innovation, promoting structural adjustment, narrowing the gap between the rich and the poor, and strengthening the internal driving force for economic growth, requiring us to get out of the era of cheap labor; but the increase in labor costs will weaken the competition between industry and products to some extent. Force, reduce employment, cause economic growth to stagnate, and form a disconnect between economic and social development.
For the negative impact of rising labor costs, we must pay great attention to it, make early research, and work hard to develop countermeasures.
China enters the era of rising labor costs and high costs
The Chinese economy has entered a high-cost era, and the first impact is the rising labor costs.