That prompted American carmakers, Korean electronics manufacturers and private Chinese firms to look for new sites. China’s one-child policy, plus a jump in higher education enrollment, further depleted the number of new entrants to the workforce, forcing up wages. Wages began to rise around 2006 as the migration of rural workers to Guangdong ebbed. Wages are a growing component of manufacturing costs in China, making up to 30 percent of the total depending on the industry, according to the Boston Consulting Group. Some companies cite rising wages in southern China for the shift elsewhere. “It has been easier to recruit workers in the Pearl River Delta than some inland locations,” Foxconn told Reuters in written comments in late December. That’s what Yantai, in Shandong province, did in September when Foxconn had trouble filling Christmas orders for Nintendo Co Ltd Wii game consoles. Local governments eager to please new investors lean on schools to meet any worker shortfall. ![]() “It tightens the labor market,” said Wang, whose school sends its students to work at Foxconn and other firms. The company “has a huge appetite for workers”, Wang Weihui, vice director of the Yantai Fushan Polytechnic School, told Reuters during a recent visit to the city. The minimum legal working age is 16.įoxconn, the trading name of Hon Hai Precision Industry, employs 1.2 million workers across China. In 2010, the ministry ordered vocational schools to fill any shortages in the workforce. In any given year, at least 8 million vocational students man China’s assembly lines and workshops, according to Ministry of Education estimates - or one in eight Chinese aged 16 to 18. The schools teach a variety of trades and include mandatory work experience, which in practice means students must accept work assignments to graduate. That has prompted multinationals and their suppliers to use millions of teenage students from vocational and technical schools on assembly lines. Yantai officials came to the rescue, ordering vocational high schools to send students to the plant run by Foxconn Technology Group, a Taiwanese maker of smartphones, computers and gaming equipment.Īs firms like Foxconn shift factories away from higher-cost centers in the Pearl River Delta in southern Guangdong province, they are discovering that workers in new locations across China are not as abundant as they had expected. As a result, many multinationals and their suppliers are corralling millions of teenage vocational students to work long hours doing assembly line jobs that might otherwise go unfilled - jobs that the students have no choice but to accept. More and more factories in China move inland from higher-cost coastal manufacturing centers, labor is turning out to be neither as cheap nor abundant as many companies believed. Chinese college students majoring in textile work at a garment factory in Jiaxing, Zhejiang province, October 19, 2012.
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