CHINA’S LABOR FORCELEEOZ AVNI, DORON KRAUS

CHINA’S ECONOMY

• The world’s second largest economy after the United States

• The largest manufacturing economy and exporter of goods in the world

• The second largest importer in the world

• Growth rates averaging 9.8% over the past 25 years, in comparison to the US which is averaged at 3.2%, and Israel at 1%

• Rank 87th on per capita income basis, Monaco is 1st , Israel 30th

• The goal is to become fully developed nation by 2049

PROBLEM #1: SHRINKING WORKING FORCE

• China’s population almost doubled in growth during 1950-1980

• Key working ages 15 to 64

• China improved workforce productivity by transferring workers from agriculture to industrial sector

• 1979 China’s one-child policy

SHRINKING WORKING FORCE

• Declining mortality rates, life expectancygrow from 35years to 75years

• Declining fertility rates, dropped from 6 to 1.8 birth per woman.

China’s demographic shift, 1950-2050

CHINA’S POPULATION SHIFT

Under 1519%

15-6070%

over 6011%

2010

Under 15 15-60 over 60

Under 1512%

15-6055%

Over 6033%

2050 est

Under 15 15-60 Over 60

PROBLEM #2 : CHINA’S CHEAP LABOR WORKING CONDITIONS

Introduction

China’s labor force count more than 800 million man & woman from whom 40% work in agriculture.

Country Population [millions]

Num’ of people that

work in agriculture [millions]

Percentage of the

population

China 1354 320 23,6%

USA 317 1.58 0.5%

Israel 7.5 0.07 0.9%

1. Minimum monthly wages for a simple labor

2. Living conditions

Country Hourly wage

USA (by law) 7.25 $ = 25.3 ₪

Israel (by law) 23.1 ₪

China (by law??????) 1.5 ₪

3. Working for extra hours

Chinese Working law allows to work for only 36 extra hours in a month.

examples of violations:

4. Penalties for workers during working shifts.

Factory that produce for Avg .monthly extra hours

Apple 120( 5 hours a day)

Microsoft 140( 6 hours a day)

CHANGES IN CHINA’S ATTITUDE FOR CHEAP LABOR

1. Permission to form unions:

By law (and in theory): unions are allowed.

In reality: workers don’t know they are allowed to join unions + the law is not forced.

2. Improving education system.

FOR CONCLUSION:

China’s Cheap labor force

China is an attractive country to manufacture in

China’s economy is in growth rate

Contribution to china’s export and

foreign trade

A demand in China for more cheap labor

Vicious competition inside China worsens

cheap labor conditions

A demand out side and inside of China to better cheap labor conditions

China’s cheap labor is not as cheap is it used to

be

China is not attractive country as it used to be…

REFERENCES

• “China’s labor force: what happens when china’s workers retire?”, China 360, KPMG global china practice, July 2013

• “The disadvantages of China’s cheap labor in foreign trade”, JI ZUWEI, Shandong Institute of Business and Technology, P.R.China, Feb 2013

• http://www.moital.gov.il/NR/exeres/2F5EA151-6FAE-4203-91E0-3780483722E5.htm

• http://www.economist.com/blogs/freeexchange/2012/01/chinas-labour-force

• http://www.tradingeconomics.com/china/gdp-growth-annual

• http://www.tradingeconomics.com/united-states/gdp-growth

• http://www.dol.gov/dol/topic/youthlabor/agerequirements.htm

• http://www.dol.gov/compliance/guide/childlbr.htm