• Fri
  • Jul 11, 2014
  • Updated: 4:33am
BusinessChina Business
EMPLOYMENT

Jobs in world's factory lose allure

Employers in the Pearl River Delta expect to have a tougher time filling manufacturing positions after the Lunar New Year

PUBLISHED : Friday, 08 February, 2013, 12:00am
UPDATED : Friday, 08 February, 2013, 3:53am

A slowdown in the growth of the mainland's labour supply will further shrink the already tight pool of workers in the Pearl River Delta after Lunar New Year, industry watchers say.

Changing demographics, tightening labour laws and competitive offers elsewhere are combining to make the Pearl River Delta, the "world's factory", a less attractive place for many migrant workers to return for work.

Sunny Ho Lap-kee, executive director of the Hong Kong Shippers' Council, said the pool of workers in the delta's factories would shrink by at least 20 per cent after the Lunar New Year.

Pay was one issue, Ho said. The average pay of a factory worker in the delta region was 10 per cent lower than the Yangtze River Delta, so the Pearl River Delta was not the top choice for many workers, Ho said.

This year would be a turning point for the mainland's workforce, he said. Growth in the nation's labour supply would start to slow and eventually turn negative under the influ- ence of the country's one-child policy.

Stanley Lau Chin-ho, the deputy chairman of the Federation of Hong Kong Industries, agreed that the number of mainland workers heading to factories in the Pearl River Delta after the holiday break would continue declining.

"Our members report that the number of workers coming back to the delta after the Lunar New Year has come down over the past few years," he said.

Although Guangdong would raise its minimum wage by an average of 19 per cent on May 1, it would not be easier to hire people in the province's factories, Lau added.

"The pay increase in Guangdong might be higher, but not by a huge margin compared to other provinces. [Also], with tightening labour laws, workers in Guangdong can no longer work as many extra hours as before, so many migrant workers prefer to work in their hometown where they can stay with their families," he said.

In addition, foreign investment in manufacturing was shifting. While most of it was concentrated in Guangdong a decade or so ago, investment in the sector was shifting to inland provinces like Hunan and Sichuan, home base for many migrant workers who used to journey to the Pearl River Delta for work, Lau said.

Lau said one way authorities in Guangdong could tackle the tightening labour supply would be to waive import taxes on machinery so factory owners could speed up automation.

Neeraj Sawhney, director of Topnet International, a Hong Kong textile trading firm, agreed that mainland workers now had more job options in their hometowns.

"Mainland workers have much stronger negotiating power than before. They require more incentives to come back to work in their factories, which is increasing costs. Even if their salary is 10 per cent lower in their hometown, they don't mind staying at home," Sawhney said.

One sector bucking the trend is the toy industry. Samson Chan, honorary president of the Toy Manufacturers' Association of Hong Kong, said about 70 to 80 per cent of the original workers would return after the Lunar New Year to Guangdong's toy factories, which make 85 per cent of the world's toys.

New workers, including friends and relatives of the original workers, would make up the shortfall, he said. "The toy business is pretty flat," Chan said.

Hong Kong-listed garment maker Luen Thai Holdings also expects the overwhelming majority of employees at its mainland factories to return after the Lunar New Year. "This is based on our experience in the past few years," a company spokesman said.

Luen Thai was able to maintain its mainland headcount because it provided a "comfortable working environment", the spokesman said.

"Most workers, especially those from the younger generation, put a lot of emphasis on the quality of social life rather than just on wages.

"The company has ensured a reasonable workload so they can socialise and enjoy the entertainment facilities after work."

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