Shoemaking Enterprises Should Rationally Understand The Rise Of Labor Costs

In Jinjiang, Fujian, the largest sports shoe production base in China, many shoe companies generally feel the pressure is very large this year: the appreciation of the RMB, the price of raw materials, the hard work of the workers, especially the increase of labor costs: the average wage increases 10%-20%, and the technical workers have even reached 30%.

Coupled with the popularity of raw materials, the cost of a pair of adult shoes at least increased by 10%.

Indeed, after years of slow growth or even no rise, labour prices have been rising rapidly.

The sample survey results of the 17 provinces and autonomous regions of the State Council Development Research Center showed that the average monthly wage growth of migrant workers rose to 2.8%, 6.5% and 11.5% respectively from 2004 to 2006, and the growth rate was accelerating year by year.

In this regard, some experts estimate that in the next 3-5 years, China's labor costs will increase by 30% to 50%.

There is no doubt that the price of labor has risen with economic development, which is an objective law.

From the international experience, the supply and demand of labor in most countries have experienced the "Lewis turning point" from labor surplus to shortage.

When the "Lewis turning point" in Japan, Korea and other countries arrived, the rural population accounts for about 35% of the total population.

At present, the urbanization rate of the developed coastal areas in China has reached over 50%, indicating that the "Lewis turning point" and its impact are coming.

For the rise of labor prices, there is no need to overreact or panic. We should objectively and rationally understand the situation and adapt to the situation.

With the progress of science and technology and the improvement of labor productivity, the moderate increase of labor prices will not reduce the international competitiveness of enterprises, nor will it cause the "large number of fleeing" of processing enterprises.

In fact, the low cost advantage is indeed an important reason for the domestic enterprises to win the competition in the past, but the role of productivity, technology, innovation and system is also important.

The price of labor has risen. If we fully tap the potentialities of productivity, technology, innovation and system, we will win new space for the development of enterprises.

On the one hand, the low labor force prices make workers exhausted and human capital appreciation impossible to talk about. Wage increases can undoubtedly affect the employment expectations and attract more high-quality practitioners, thereby stimulating the enthusiasm and creativity of workers. On the other hand, wage increases will reverse the situation that domestic labor prices are not high and labor distribution accounts for a continuous decline in GDP share, which is conducive to improving the purchasing power of consumers, easing domestic demand, creating new driving forces for economic development, and building new space for enterprise development. At the same time, higher labor costs and higher costs will squeeze the living space of low-level enterprises, and provide opportunities and possibilities for upgrading industrial level, adjusting industrial structure and changing economic growth mode.

Taking Jinjiang as an example, industry experts point out that the crisis faced by many enterprises is also a turning point for the upgrading of the whole industry. The new round of industrial integration will make domestic shoe enterprises more competitive in the international division of labor.

Although domestic labor resources are still abundant at present and for some time, there will be structural contradictions and shortages in some areas and sectors. Labor prices will show an upward trend in the curve.

Therefore, on the one hand, on the one hand, it is necessary to prepare for all kinds of preparations for the rising labor force price. The early responders should take the initiative and adapt themselves to the early development. On the other hand, measures should be taken to improve the employment and reemployment policy environment, strengthen the protection of labor rights and interests, reform the household registration system and enhance the mobility of the contracted land, and so on, so as to tap the potential of labor supply and avoid the premature emergence of "Lewis turning point" and win time for changing the mode of economic growth.