Rising Labor Costs: A Big Survey Of Enterprises' Survival Difficulties In PRD

Before Adidas chose to close its only factory in China, another industry giant Nike had already shut down its Chinese production line.

Time goes back further, before the withdrawal of Adidas and Nike, Clarks, K-Swiss, Bakers and other international. footwear industry The giants have also added production lines in Vietnam and Indonesia.

Analysts point out that the main reason why foreign clothing giants such as Nike and Adidas have closed their factories in China are that China's labor costs have been rising in recent years.

Human cost engulf corporate profits

Reporters in Dongguan Changan Zhen An Industrial Park, Southern China electronics factory hit the "monthly comprehensive income of 3000 yuan" advertising, not far from the advertisement of Si Tuo factory is "recruitment of men and women general workers, monthly salary 2100 to 3200 yuan."

The rising cost of manpower has been a headache for business owners.

Dongguan Hongyu shoes company's strict boss told reporters that the profit margin is not high. If employees pay too fast, it will make enterprises face the risk of no money to earn.

In this interview in Dongguan, the reporter heard such a story: a family business operated a mechanical processing plant for more than 10 years, and labor costs began to rise four or five years ago. In order to retain workers, the factory gives the workers an average wage of 10% per year, and provides four quarters and three meals a day. By 2010, the cost of employment had skyrocketing. The average workers in the front line are unable to keep 2000 yuan, and the number of front-line workers in several core posts is over 5000 yuan. Finally, the high cost makes the enterprise almost no profit, so we have to push off some orders and dismiss some workers.

Jin Baisong, a researcher from the Ministry of Commerce, found that labor costs accounted for about 80% of Dongguan's pure foundry and shoe-making enterprises, and the labor cost of high-end footwear enterprises accounted for 18%.

Reporters learned that rising prices and new generation of labor demand for quality of life, so that workers have higher requirements for wage standards. In addition, the year-round "labor shortage" has also contributed to the significant increase in the cost of employing enterprises, especially labor intensive enterprises.

The cost advantage of China's labor force is also gradually weakening. Data show that China's labor cost is two times that of Southeast Asia.

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According to the statistics of Japan's Trade Promotion Council, compared with China, Vietnam's production cost is 15% to 30% lower than that of China. Compared with the mainland of China, the average monthly salary of Vietnamese workers in the last year was about 136 dollars, while Indonesia's about 129 dollars, while Chinese workers had reached 413 dollars, which was more than two times that of Vietnam and Indonesia. This is indeed very sensitive to labor-intensive enterprises.

Yi Dinghong, a professor at the school of labor and personnel at Renmin University of China, believes that the cost of labor in China's manufacturing industry has begun to surpass those in Southeast Asia. In particular, low profit and relatively simple industries, such as the clothing industry, many multinational companies shift production plants to Southeast Asian and South Asian countries.

Yi Dinghong analyzed that in recent years, China's labor costs have increased, and in addition to factors such as price increases, the gradual improvement of the social security system has also increased the wages of workers.

Yang Liming, deputy director of the labor and wage Research Institute of the Ministry of human resources and social security, said that although the trend of rising wage levels will not change, the slowdown in economic growth has affected the ability of enterprises to pay. Excessive wage growth will increase the cost of enterprises and even cause difficulties for small and medium-sized enterprises.

The proprietor himself substitutes for the workers.

"Let's see what time it will last. If the environment continues to be so bad, we may have to close the factory." Speaking of the situation of his factory, Mr. Chen, a private enterprise owner in Zhongshan, Guangdong, admitted to reporters. Mr. Chen's factory is made of hardware and machinery. Because of the shortage of orders this year, he could not keep the workers. There were only four workers left in the factory.

Lin Shaowen is the head of Guangdong HDA industrial mould frame Co. Ltd., whose company has been operating mould, mould frame, mold and related accessories for more than 20 years. Although many enterprises have been losing money, shutting down and closing down since last July, however, it has been struggling to maintain operation in the doldrums. "Most of the businesses that went bankrupt this year are between one hundred or two hundred and five hundred or six hundred employees. Such enterprises have a lot of expenses, and they are facing a shutdown crisis without orders. Unlike small companies with dozens of people, they can barely maintain small orders." Lin Shaowen said, "labor-intensive enterprises need a lot of manpower. Before China's low labor cost, it can keep the low price advantage of products, and now it is generally rising artificially, so many large manufacturing enterprises are difficult to continue."

Mr. Chen believes that most labor-intensive enterprises have the disadvantages of single product and strong dependence because of their technical content. This is particularly evident in the machinery manufacturing, toy industry and clothing industries. Because these industries are dominated by labor force instead of technology, and the overall industrial structure is low in efficiency and professional, so these fatal defects make them fail in the financial crisis and European debt crisis.

Mr. Chen told reporters that the company's basic salary for workers is between 2000 and 3000 yuan, but still can not recruit enough manpower. He said that the company had more than a dozen workers, but gradually began to leave in 2008. "There are only 4 people left now. I have to hand in hand to keep the factory running." According to Mr. Chen, recruitment is very difficult at present, but the quality of workers is not enough, but the price is high. But if the company raises wages again, it will lose money and will not be able to raise wages.

Regret not using machine instead of labor

Zhang Monan, an associate research fellow at the National Information Center, said that China must seek to transform the mode of economic growth and move from a large population country to a powerful human capital country. But the time window for China is running out.

However, according to the reporter, for many small and medium-sized manufacturing enterprises, transformation is facing a real problem.

"The pressure of survival makes our SMEs feel obliged to transform, but the transformation faces many practical problems: how to turn, where to turn and what to turn, and transformation needs capital, talent and technology support." When it comes to the current hot topic of transformation, Shaw manager of the Dongguan Marriott toy factory seems somewhat helpless.

There are also some SMEs expressing their concerns to reporters. First, enterprises need additional investment in transformation. Two, the future will not necessarily generate benefits.

In an interview with reporters, Chen Naixing, director of the SME research center of the Chinese Academy of Social Sciences, said that the transformation of SMEs was painful. "Because wage increases, labor rate has not increased, resulting in the increase of labor costs and the weakening of low cost advantages, making China's small and medium-sized enterprises in the two aspects of the world attack: one is the human resources advantages of Southeast Asia, the two is the high-tech country's technological advantages."

Chen Naixing suggested that if enterprises want to transform, first of all, management must be transformed, and they can no longer rely on extensive management in the past. Two, we should increase investment and transform backward technologies. "Entrepreneurs should recognize the situation, calm down their emotions, do the most familiar things, pay attention to their profession, work hard and work hard."

Facing the severe objective situation, improving management and efficiency has become a top priority.

Dongguan Hongyu shoes company's strict boss told reporters that ten years ago, the average wage of workers in Dongguan was only five hundred or six hundred yuan a month. At that time, many bosses thought that investing tens of thousands or even hundreds of thousands of yuan to buy advanced equipment was not necessary at all. Low wages were enough to protect the profits of enterprises. It was this idea that many shoe factories were only satisfied with OEM, and the management was extensive and the development was slow. In the face of rising wage costs, coupled with insufficient orders, and other factors, the ability to resist risks is not high.

"I have a colleague friend who realized the problem of higher labor costs a few years ago. Therefore, while improving management ability and managing efficiency, we also introduced advanced machines instead of labor to improve efficiency. In recent years, they have spent millions of yuan buying some machines and digital equipment instead of labor. " Yan said, "we didn't understand it at the time. Now we understand that if the machine can replace labor, it can increase efficiency more than two times, and digital equipment can increase five to ten times."

"For example, if you spend five hundred thousand yuan on a digital device, you can save more than six hundred thousand yuan a year for the enterprise." Yan's boss admired the reporter, "one can save production costs, and the other can reduce the" labor shortage "problem. It is worth killing two birds with one stone.