Wage Surge Will Promote Pformation And Upgrading Of Textile And Garment Industry

"Raising wages is the trend of the times."

In an interview with reporters, insiders and listed companies reached a consensus on the trend of rising labor costs. Many enterprises have already increased their wages after the "labor shortage".

China's manufacturing industry, which relies on cheap labor to win, is facing the challenge of rising labor costs. Statistics show that in many Chinese manufacturing industries, textile and garment industries are the most affected industries. In the more severe competition in the future, industry concentration and industrial upgrading will become an inevitable trend.

The pay rise has become a trend.

Several textile and apparel companies listed by the press have said that the salaries of ordinary employees have been raised this year, and the magnitude of the increase is different.

Among them, Changshan shares just raised wages in 4 and May, and Guoguang in January also rose wages in Guangzhou.

Lu Tai A said that the company usually raises two times a year, arranged at the beginning of the year and the end of the year, each time the salary increase is not large, and the labor cost is gradually improving.

Lu Tai A securities affairs representative Zheng Weiyin told reporters that the company's wage level is far higher than the minimum wage stipulated by the local government, which is also higher than the average level of many local industries.

After deducting social security, pension and other benefits, the average worker gets 1500-1600 yuan a month, and the minimum wage stipulated by the local government is 910 yuan / month.

Company welfare is also very healthy, so the workforce is relatively stable, they are basically local people.

It is not a problem for the company to sign a useful agreement with the local Polytechnic and technical institutes.

As for salary increase, the enterprises interviewed have had psychological anticipation. Last year's "labor shortage" made many enterprises feel the urgency of raising salary.

Liu Zhaohe, who is in Huzhou, Zhejiang, said that during the last year's meeting with local enterprises, the problem of labor shortage was obvious.

Executives of some enterprises said that during the critical period, they had to drive to the labor market to grab people.

Although the company's salary level is still available and the labor shortage is not deeply felt, it has still felt the pressure of rising human cost in recent years.

Liu Zhaohe said that although there is no specific statistics, it is felt that the wages of local enterprises have risen by 20%-30% since 2009.

Under the pressure of external pressure and the adjustment of enterprises themselves, enterprises have to provide a more competitive salary system for their employees.

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"Wage increase is inevitable, and the rise of labor costs is the general trend. The proportion of future wage costs to total cost of enterprises will be further improved."

Guo Jin securities analyst Zhang Bin concluded.

Textile and clothing are most affected.

Based on the data provided by the 2009 annual report of the listed companies, the reporter made a statistical analysis of the sensitivity of the manufacturing industry to the rise in the cost of manpower.

The results show that in the various sub sectors of the manufacturing industry, the textile and garment fur industry is the most densely populated industry, with the lowest average wage, the highest proportion of wage cost in total business cost, and the most sensitive to the change of human cost.

When the wage surge comes, the biggest impact must be the industry.

Since some ST companies can no longer maintain normal operation, the journalists have made statistics on the wage levels of 968 manufacturing companies after excluding ST companies and the number of employees who did not disclose the number of employees, and extracted the indicators of the number of employees, total wages, total operating income and total business cost of the listed companies in 2009.

The statistics show that textile and apparel are the most intensive industries in the 10 manufacturing sub sectors, such as electronics, textile and clothing, machinery and equipment, metal nonmetal, wood furniture, food and beverage, medicine and biology, paper and printing.

By dividing the total business income of the industry by the total number of employees in the industry, the income generated by individual employees in the industry is lower. The lower the value, the lower the value created by a single employee, the higher the degree of dependence on the labor force in the industry, the more intensive the labor force is.

Statistics show that the value of textile and garment industry is obviously lower than that of other industries.

The statistical results of industry average wage show that the textile and garment industry is at the lowest level in all manufacturing industries.

In 2009, the annual average wage of the employees in this industry is only 31 thousand yuan, far below the annual average wage of 56 thousand and 500 yuan in manufacturing industry.

The annual average wage of the manufacturing industry is higher than that of the two industries, such as mechanical equipment and metal and nonmetal, reaching more than 65 thousand yuan.

From the proportion of staff salaries to total operating costs, it is also the highest in textile and garment industries, reaching 10.24%, while other manufacturing sub sectors are below 9%.

If staff salaries go up further, the textile and garment industry will feel more pressure than other industries.

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Industrial upgrading will speed up

Under the pressure of rising labor costs, the cost advantage of cheap labor in China's manufacturing industry will be gradually lost, and short-term enterprises will face pains. But in the long run, it is not necessarily a bad thing. The rising cost of manpower will push China's manufacturing industry to accelerate the pformation and upgrading.

Zhang Bin, an analyst with state securities, said that because of the four quarter of the company's wage increase, the impact of this year's business is bigger than that of last year.

In the short term, labor intensive textile and garment industries will face a painful process.

The competition in these industries is very fierce. There are too many small and medium sized enterprises, and the industry is disorderly. The price war, which is used in the competition, is built on the difference of labor cost, tax and so on. After the wage increases gradually, the small enterprises with poor competitiveness will have smaller living space and may eventually be closed.

In the medium to long term, the increase in wages is beneficial to the development of the textile industry. The rising labor cost will push the enterprises to upgrade their industries and enhance the competitiveness of the whole industry through the reshuffle of the industry.

In this regard, CICC Wang Hanfeng also discussed earlier, he said, rising labor costs will promote industrial pformation and upgrading of industrial structure.

Specifically, the rise in labor costs will bring China three medium and long term industrial trends: the proportion of manufacturing industry has shrunk, the scale of traditional manufacturing industry has increased steadily, but all sectors have entered the stage of reorganization and integration, and the concentration of industries has been upgraded. The proportion of high value-added, technology intensive manufacturing industries and product grades has increased.

At present, some enterprises have taken a solid step in industrial pformation and upgrading.

Take the textile industry as an example, such as Lu Tai A, Huafu color spinning and so on, with higher research and development level, bargaining power and positioning high-end, differentiation strategy, have stronger risk resisting ability than similar companies.