First, an important note. Working conditions in Chinese factories are not great (read this if you want an idea of how bad it can be). My point is that they are getting better.
They are getting better thanks to market adjustments — a lower supply of migrant workers — and absolutely not because of efforts from customers in the US or Europe.
I found two recent articles that give an idea of the situation.
Global Sources just published China labor shortage? Not this year, say suppliers and experts. They report the general feeling that labor shortage was not as bad this year as it was two or three years ago:
In the weeks immediately after Chinese New Year, also known as the Spring Festival, many factories reported a higher return rate among workers who left for celebrations in their home province. Other makers, meanwhile, said finding employees to replace those who did not come back to their jobs has so far been easier.
Many manufacturers are offering more benefits, in addition to higher wages, to line workers:
- A bonus for those workers that come back after Chinese New year, but before a certain date,
- Allowances based on seniority and/or attendance,
- A relaxed working atmosphere, sport/entertainment facilities,
- Better dormitories, sometimes with A/C,
- More holidays,
- Off-site team-building events.
Is this what caused a lower shortage of workers? Is it about demographics? Or about weak demand from export markets? Who knows?
The Financial Times published Chinese factories struggle to keep staff last week. Here are a couple of interesting quotes about a toy factory in Dongguan:
About 120 children live in dormitories on the factory site. About 40 per cent of Maisto’s 3,000 workers now live with partners and children and some of the dormitories, designed for young single workers, are being revamped to make them more suitable for families.
And this is the first time I read about such a system:
The company plans to introduce a pension system for workers who stay with the company into their 30s and 40s.
Mentalities are evolving, and that’s a good thing.
Let’s hope the next thing they focus on is improving labor productivity.
And how about their product quality? When will they understand that a 3% reject rate is too high? Maybe in 5 or 10 years…