$50 an hour on the assembly line?

Manufacturing pay in China has nearly tripled over the past decade. A similar rise in the US would have factory workers cheering, though not without potential consequences.

By Jason Notte Mar 28, 2013 2:57PM

Made in USA (© David Engelhardt/Tetra images RF/Getty Images)Americans can complain about China's wage advantage over the U.S. and its impact on manufacturing growth all they'd like. If American workers and employers pushed for the wage increases sought by Chinese workers, factory pay in the U.S. would be more than $50 an hour.

 

As Bloomberg discovered, pay for workers in China's manufacturing industry has nearly tripled in some cases as its labor pool thins and employees name their price at far-flung facilities. According to the U.S. Bureau of Labor Statistics, average hourly wages for China's manufacturing workers rose from 62 cents an hour in 2003 to $1.36 an hour in 2008.


Even that's a conservative estimate, as a more recent Japanese survey puts average monthly wages between $320 and $350. On the high end, that's roughly $2.20 an hour, or more than triple the average wage in 2003.


Had a similar push occurred in the U.S., the average hourly manufacturing wage of $15.61 quoted by the BLS would have soared to $46.23; in reality, it has struggled even to keep up with inflation, creeping up to $19.28. As China's discovering, however, such a leap comes with steep consequences.
 

What's driving the boost that, incrementally, is eating away at China's wage advantage over the U.S., Europe and other Asian countries like South Korea? Put simply, a nation of 1.35 billion people has a shortage of young, qualified industrial labor and its workers know it. In September, 2,000 employees rioted at a Foxconn facility in Taiyuan, calling for better working conditions and temporarily shutting down the plant used by the maker of Apple's (AAPL) iPad, Sony's (SNE) PlayStation and Amazon's (AMZN) Kindle products.


In October, pushback from workers at a Foxconn plant in Zhengzhou over a national holiday and vacation time sent ripples through Apple's iPhone 5 supply chain and forced both the tech giant and its supplier to publicly assure the world that all was well and that its precious tech playthings were still on the way.


As Foxconn and other China-based companies are discovering, according to Bloomberg, China's labor force is well aware that it's a rare commodity. Factories built in peanut fields well outside the cities are being forced to pay the workers the same wages as their urban counterparts, doubling workers' take in some cases.

 

Americans know all too well how this story plays out. While better wages and working conditions in China mean more potential buying power for Chinese workers and a boost to the overall Chinese economy as a result, it also means higher prices worldwide until price- and bottom-line-focused multinational businesses find their next rich pool of cheap and exploitable labor. China's already getting a bit ahead of itself on the “buying power” end of that equation by building vast developments of empty homes its citizens aren't quite ready to buy. But manufacturers are already looking to Vietnam, Bangladesh, Indonesia and the Philippines for their next low-cost labor pools.


China's surging wages won't help U.S. paychecks, but they just might give the global economy a needed boost.
 

More on moneyNOW

132Comments
Mar 28, 2013 9:31PM
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*** NOTE TO CONGRESS PERSONS ****  Explaine to me and to anyone reading this how you can justify your annual salary of about $176,000 for a part time job, of about three months.  IF you worked (or was on the clock) all year at that rate, you would be dragging in (I can't say 'earning') about $704,000 annually.  Many people work ALL year at minimum wages and support their family on about $15,000.  How can you justify your salary?  I would like you (EVERY CONGRESSPERSON) to answer this question on this website for all to see.  I  have asked this of a couple of Congress persons and I got a reply but not an answer to the question I asked.  They danced all around and gave me answers to things I did not ask but did not give me an answer to this.  Please answer!!
Mar 28, 2013 4:23PM
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You cannot compare the US wage to the Chinese in percentage. You have to use dollars. This article is idiotic.
Chinese wages increased $0.84
This guys is saying that equates to $30.62 in the US.
So, which one do you think would raise the price of the goods more.
Obviously, this guy does not know direct costing and how manufacturing costs affect the end costs.

This is two articles today where MSNBC has no clue.

Mar 28, 2013 6:50PM
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First, find how many CEO's are worth $50 per hour and then complain about working people making that kind of money.  At least, if our workers were making that kind of money, they would have spent it here in the United States and creating other jobs.

 

CEO's make thousands per hour and get paid whether they make the company money or drive it into oblivion.  What is wrong about American workers making a living wage?  What is right about Chinese workers getting paid peanuts for working in sweatshop conditions with no health care or regard for safety?

Mar 28, 2013 7:19PM
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My what a nice military we are building for china....

Mar 28, 2013 7:23PM
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Don't kid yourself.  I have been to China twice on business and while you still see the rickshaws here and there, you will never see more Lamborginis or Maseratis anywhere else.

 

And if as many economists predict, the Yuan displaces the dollar, then its over for us.  We can only hope they will send us aid.

Mar 28, 2013 8:56PM
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Now that OUR jobs are overseas....Bring OUR jobs back home!
Mar 28, 2013 6:28PM
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How much does it cost to go to the doctor? Fill up the car? It's like comparing a tree to a lamp post. I have a small personal wood shop with a bunch of machinery and power tools built in China. I would have paid more for tools made in the USA , but you can't find them. All I can get for that reason is a bunch of opinions.
Mar 28, 2013 6:02PM
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A whole $1.36/hr?Those greedy Chinese workers. Don't they know slaves work for free?Utter pablum that's what this ridiculous article is.
Mar 28, 2013 8:37PM
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perhaps we don't understand....corps move jobs to the cheapest labour market..we buy the goods and then bitch about quality..when it makes $ sense the jobs will return. the corps r it in for profit not our best interests. made in america will b their new mantra. it's evident that corps are enjoying huge profits...record breaking.   creating more jobs in the u.s?  no....the landscape is changing because it makes economic sense...do these corps feel a need to bring jobs back home that they exported?  only because it helps their bottom line corporate patriots are few .. the $ is the bottom line
Mar 28, 2013 6:37PM
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Salaries have risen in china, its true. Now CHINESE crave luxuries we crave. Salaries in CHINA are now higher than in many countries in LATIN AMERICA. Why dont jobs go to latin america? Chinese workers produce more pieces during the same amount of ours, they complain less, and the infrastructure in CHINA is built around manufacturing. Each city in china is developed around the products needed to manufacture certain items; i.e. tires in QINGDAO, electronics in Shenzhen, Audio in ENPING, etc etc. Even when salaries are higher, Chinese put up with the smog, have the infrastructure, and have workers willing to go longer ours, and complain less. It will be another 10 years before manufacturing shifts somewhere else. INDIA has deplorable conditions and too many religious holidays, the other countries mentioned have their own issues. 
Mar 28, 2013 4:16PM
Mar 28, 2013 7:09PM
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I believe one of the purposes of NAFTA was to make a worldwide competitive market on wages and products. All those companies that moved to Mexico are not exactly thriving anymore and that is why some moved to China. Bahahahahha, all you greedy over time will have no where to go and be forced to share a piece of the pie.  
Mar 28, 2013 10:12PM
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possibly the most stupid article ever written.
Mar 28, 2013 11:01PM
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our CEOS are not American they are greedy pigs that barrack should tax the **** out of them and have them stop complaining about paying more taxes for more jobs that they  ship over seas anyway. we should tax the **** out of all incoming trade from other countries also since they use a lot more fuel to ship here instead of making it here.
Mar 28, 2013 8:50PM
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When I was in China In 2006 you could by a dozen eggs ,a loaf of bread and a pint of milk for less then a dollar.

 

in the USA  you could buy the same for about six dollars.

Mar 28, 2013 3:25PM
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That average of $15.61 per hour is not for assembly line unless they only count starting wage average.
Mar 28, 2013 9:35PM
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So if I were in China I could buy a car that would cost $50k here for only $10k there.....?
Mar 28, 2013 10:10PM
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So the only worthy content of this bizarre article is that Chinese factory workers make 11 percent of what there American counterparts make. hard to compete with those numbers so keep complaining!
Mar 29, 2013 10:56AM
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Is all I have to say is look in the mirror & thank our selves, because we are buying their crap. This so-called WORLD ECONOMY B.S. ain't no world economy. It's a U.S. economy supporting the WORLD! we need to bring our companies back home & take care of one-another (our fellow AMERICANS) FIRST, then we might think about sending MY money somewhere else. By the the way GOOD JOB CORPORATE AMERICA & THE GOVERNMENT FOR SENDING MY HARD EARNED MONEY OVERSEAS! Here is a fact for the nay-sayers trade deficit is roughly 50 BILLION U.S. dollars A MONTH, lets keep our money here & SUPPORT OUR FELLOW AMERICANS. We desrve it, we all work hard for our money.

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