Factory of the world needs a million more workers

PUBLISHED : Saturday, 25 February, 2012, 12:00am
UPDATED : Saturday, 25 February, 2012, 12:00am


A new labour shortage hits Guangdong- the so-called factory of the world- right on schedule each spring, just after the Lunar New Year holiday.

The Pearl River Delta has been in the grip of a severe labour shortage since 2003 and factory bosses say the only difference is that it's always 'worse than last year'.

According to Guangdong's labour department, the province needs one million more workers, with a shortfall of about 200,000 in Shenzhen, 110,000 in Guangzhou and 80,000 in Foshan .

A survey at Dongguan's railway station after the Lunar New Year break found that about 1.2 million migrant workers had returned to the city, down nearly 20 per cent on the number who returned last year. In one township, Humen, businesses say they are more than 100,000 workers short.

Wages have been considered the best barometer of labour shortages, and factory wages have been rising by double-digit percentages in recent years. In Shenzhen, the minimum wage is now 1,500 yuan (HK$1,850) a month, compared with 610 yuan in 2004. In Guangzhou, the authorities have confirmed that the minimum wage will increase by at least 13 per cent from its present level of 1,300 yuan a month.

Experts and analysts predicted six years ago that the pressing migrant worker shortage was set to end, with many enterprises increasing wages and improving the welfare and living conditions of migrant workers.

But wages have more or less doubled since then and the situation remains gloomy.

Shenzhen has announced plans to hold 500 recruitment fairs between February 11 and the end of April to fill over 500,000 vacancies in the city. But about half the recruitment managers from a total of 100 enterprises at a job fair this week left before it ended because there were not enough job-seekers.

Wu Wei, in charge of recruitment at a supermarket chain, said it had hoped to recruit 200 people but only found four.

Another recruitment manager, from a shoe factory, said: 'We could recruit 200 migrant workers a day before but now we have to spend at least a week or more to reach the same goal.'

On Monday, electronics manufacturing giant Foxconn announced a basic monthly salary of 2,200 yuan - 700 yuan or 46 per cent more than the city's minimum wage - to fill 30,000 vacancies at its Shenzhen plant, local media reported. Migrant workers nowadays, even those with little experience or education, usually expect a job paying at least 2,500 yuan a month.

'You know, the cost of living in the delta is very high,' said Xu Li, an 18-year-old Foxconn worker. 'A one-room apartment costs 700 yuan, plus another 1,000 yuan for food and other expenses. The salary is just enough for surviving.'

In Xintang, Guangzhou, home to the world's largest contract producers of jeans, more than 10 factories have shut down this month and more than two-thirds of the others have had to drop orders because of a lack of workers.

Xiong Yuli, who owns a small jeans factory in Xintang, lit a firecracker for good luck during the Lunar New Year festival after receiving an order worth 70,000 yuan. Two weeks after the holiday, she had recruited only two new workers and had to drop the order.

'Last February, I had already recruited dozens of people and sent 10,000 pairs of jeans to Russia,' Xiong said.

With costs soaring on all fronts, the labour problem has worsened the plight of manufacturers already operating on thin profit margins.

'Skilled workers in the jeans industry now ask for at least 4,000 to 5,000 yuan a month, with four days off each month,' another employer in Xintang said. 'That's much better than many white-collar jobs.

'We can't afford the salary expectations of the workers. Now I can only shut down my plant.'

Dr Liu Kaiming, who researches labour issues at Shenzhen's Institute of Contemporary Observation, warns that demographic trends will only increase the labour shortage. 'One thing is for sure, 2012 is not the worst year. A worse year is coming.'

The mainland's family planning policy, which has been in place for 30 years, resulted in fewer births in the 1980s and 1990s, Liu said.

'Labour costs will increase. There has been soaring labour unrest in the delta. Most employers give in to workers' demands.'