Jubak's Journal, 1/5/07 12:00 AM ET
http://articles.moneycentral.msn.com/Investing/JubaksJournal/A15RaiseTryChinaorIndia.aspx?GT1=8995
This article is talking about how the workers in other countries where labour costs have been low are getting double-digit raises these days. They are far from catching up, but the change is another reason fewer U.S. jobs will be heading offshore. Rising wages in countries such as China and India, while not enough in themselves to slow the movement of jobs overseas, are making the logistics crisis much worse at a speed that few companies can successfully manage. The average worker in India's manufacturing and service sectors got a raise of 13.8% in 2006, according to Hewitt Associates. Wages are projected to climb an additional 12.3% to 15% in 2007. Workers in the Philippines are getting raises of 8.6% to 9.3% projected for 2007. In China, wages in Zhu (or Pearl) River Delta between Hong Kong and Guangzhou have climbed 20% in the past three years. United States workers saw raises of 3.5% to 3.7% on average in 2006 and are looking at another year of sub-4% raises in 2007. Jim Jubak says that U.S. just needs to be patient and very soon the wage gap will be gone. He says that after 32 years of 10% raises, a Chinese worker making $100 a month will have closed the wage gap now separating the Chinese worker from the U.S. worker making $2,000 a month. This is only if the U.S. worker will not have received a single raise in those 32 years. Rising wages in areas such as the Zhu river Delta are pushing Chinese and overseas companies to move factories and jobs to lower-wage regions of the country. These regions have two things in common. The first thing is that they are farther away from the ports that send parts, sub-assemblies and finished goods to the United States, Europe, Japan, and the rest of the world. Second thing is that the infrastructure of roads, rail lines, warehouses, terminals, shipping expediters and the like that's required by the global economy these days is less developed and sometimes virtually nonexistent in these more distant lower-wage manufacturing centers. Some companies are handling the rise in wages in counties such as China and India by moving operations to even lower-wage "platforms" such as Vietnam. Vietnam beat out China, Malaysia and the Philippines in the contest for the 1,200 worker plant. Wages wouldn't be rising so quickly in areas such as Bangalore and the Zhu River Delta if the same logistical problems hindering the efficient movement of gods weren't impeding the movement of workers. It's not just that wages are rising in the Zhu River Delta, for example. the region, which employs 2.5 million workers in 15,000 plastics factories alone, is suffering an acute labour shortage.
At the present time, all ten provinces as well as the federal government in Canada have minimum wage legislation. There are several reasons for introducing a minimum wage into the labour market. In this article, the author, Jim Jubak, introduces us to some of the leading countries in terms of wages, that are beating the U.S. in increasing the percentage of increasing wages. This article tells us that the 'low' minimum wages are forcing the jobs offshore. He says that their have been low minimum wages for some number of years, but now are getting double digit raises these days. The book has an article the talks about Minimum Wages and Poverty in Canada and other countries, and this article, by Jim Jubak, is just giving us some statistics of the minimum wages and how the percentage increased and is still increasing throughout the new year.
The minimum wage is low in Canada, and other countries too. For example, I work in McDonald’s and you would think that it would be rich and that it would be able to pay to better than other fast food restaurants, but it does not. For making food, taking order, keeping the floors clean, etc., we only get paid $6.50/hour which makes you feel worthless. I mean even the high school students work because they want to save up for their post secondary or university education and making $6.50/hour won’t help. They would have to start pretty early in their life to save up for that. Even the Shift Managers get paid $9.00/hour, which is not nice at all considering that they take the whole responsibility in their hands for their shift. The minimum wage should at least be $10/hour if not more, so that the Shift Managers can get paid way better than what they are getting paid now. I do like one thing out of this, if I was the store owner, I would like it if there was more money left over for the company and less money towards the hundreds of employees that are employed at that restaurant. But I would think twice before giving my employees low minimum wage, because if I were in their shoes I would want more money. Maybe they should keep the 500 hours law, which is that you have to be at minimum wage- $6.50- for 500 hours, if you have never worked, until you get to 501st hour then you get paid $10/hour. Which I would think is fair enough for every one. But the restaurant should not try make the $6.50/hour employee work as hard as the $10/hour employee.