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I don't know what percentage of labor that has been shifted to rural areas or to other other countries like Vietnam.

With regards to rural areas in China, according to the New York Times article I quoted (and linked to wrongly above):

Visiting villages from tropical Gaoyao in the southeastern corner of the country to dusty Houxinqiu in the northeast, it is striking how few young adults remain after so many have left for the cities. A recent government survey of 2,749 villages in 17 provinces and autonomous regions found that in 74 percent of villages, there were no workers fit to travel to distant cities, according to the official Xinhua news agency.

A separate report by the Chinese Academy of Social Sciences warned of coming labor shortages even in rural areas as soon as 2009.

Wages Up in China as Young Workers Grow Scarce

According to Asia Times,

According to official statistics, the total number of rural laborers is now about 500 million. The Ministry of Agriculture estimates that at least 170 million laborers are needed to sustain the country's agricultural production and another unspecified, but considerable number is needed for other rural labor. Another 150 million are estimated to be working at township enterprises run by farmers themselves.

Various estimates put the number of rural migrants working in cities at between 80 million and 130 million. That means available surplus rural labor is between 20 million and 70 million. Not many indeed, considering the current labor shortage in economically developed regions such as the Pearl River Delta, where the annual shortage alone is estimated to be at least 2 million.

And things may become worse as the countryside absorbs more surplus labor under Beijing's policy to boost rural development and farmers' income.

The shortage will eventually trigger a demand for higher wages, possibly as soon as in three years, the CASS green paper says.

China's cheap labor pool running dry

i.e. "things may become worse" for employers and businesses, but better for workers.

With respect to Vietnam, here is a headline from 1995:

Unemployment Looms in Vietnam : The Baggage of Reform

Now, despite adding 1.3 million workes a year to the labor pool, Vietnam has cut its poverty rate from 51 percent in 1990 to 8 percent in 2006, and here is a headline from this August:

Labour market forecast to be hot at year's end

A survey of the HCM City Job Service Centre shows that the serious shortage of labour continues to occur at textile-garment, footwear, wood processing enterprises and in the tourism field.

According to Navigos' recent human resources report, the need for labour of 45/46 fields increased remarkably in the second quarter of 2007, focusing on jobs that require high skills and qualifications.

Recently, banks expanded their networks and as a result, their human resources increased by 57% in the second quarter, followed by accounting and financial institutions with 42%, waste treatment with more than 40%, real estate and translation, 39%.

Though the supply of labour rose in the second quarter the source of supply didn't catch up with the demand: the supply increased by 30% while the demand was up by 142% compared to the first quarter.

Labour shortage, thus, is forecast to not be solved in the remaining months of the year.

Is it unreasonable to expect that while labor costs are still cheaper in Vietnam than in China, just as in China, they will get higher -- and so will standards of living -- as more production is shifted there, as competition continues to grow for labor, and as wages go up to attract and keep workers?

Truth unfolds in time through a communal process.

by marco on Sun Oct 28th, 2007 at 06:21:57 PM EST
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I just found an article that confirms there are serious problems among foreign direct investment companies in Vietnam:

According to the survey, which was conducted by the Worker and Trade Union Institute and the Vietnam Confederation of Labour in HCM City, Dong Nai, Binh Duong, Ba Ria-Vung Tau provinces in the south, Hanoi, Vinh Phuc, Bac Ninh, and Hai Duong in the north, only 16.6% of workers in FDI enterprises feel easy in their work and only 26.3% have good relations with their employers.

Some 44.4% of workers said that their salaries were low and insufficient for living. Some 15.4% complained that they often had to work overtime.

<...>

According to Nguyen Manh Thang, an expert from the Worker and Trade Union Institute, Government Decree 3 on minimum salary (VND710,000 and VND790,000 per month) is to prevent employers from paying salaries lower than these levels and the foundation for them to define official salaries and allowances, not be the real income of workers.

However, in many FDI enterprises, the real income of workers is the minimum salary set by the above decree. As a result, only one-third of workers participating in the survey said that their incomes were sufficient for living.

To have extra income, 42.5% of workers have to work overtime and it is 54.7% in textile-garment firms.

Around 6.5% of the workers have to work 10 hours per day on average, 18% from 8-10 hours and 52% eight hours per day. However, around 65% work six days per week and 25% seven days per week.

In Hanoi, more than 300 workers of Yangmin Enterprise, a motorbike component manufacturing company of Taiwan, recently went on strike because they had to work two more hours a day and work seven days per week.

Workers in FDI enterprises not satisfied

The article concludes:

Improving salaries, wage mechanisms and supervising the implementation of regulations on labour is a need at FDI enterprises.

The Worker and Trade Union Institute suggests that the Ministry of Labour, War Invalids and Social Affairs compile collective labour agreements at sector, regional or industrial zone levels to make legal frameworks for enterprises.

The institute also proposes the amendment of laws on labour disputes and strikes. Many grassroots trade unions said that formalities on strikes were complicated so it was difficult to ensure a strike was legal or to distinguish what was temporary job quitting and what striking because the definition of a strike is temporary job quitting.

All mechanisms and policies related to the rights and the interests of workers must be legalised to facilitate negotiations between trade unions and employers.

So yes, while competition for labor is improving things in Vietnam overall, it is clearly still not sufficient on its own.

Truth unfolds in time through a communal process.

by marco on Sun Oct 28th, 2007 at 06:35:10 PM EST
[ Parent ]
Thanks for these detailed replies, bruno-ken - I only just remembered my question and had to search for it to get back here!
by afew (afew(a in a circle)eurotrib_dot_com) on Sun Nov 4th, 2007 at 01:00:11 PM EST
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