Labor shortage a headache for factories

China Daily, July 28, 2011

The Pearl River Delta Region is now facing a labor shortage of more than two million.

Though China has adjusted the minimum wage level with a growth of over 15 percent above the baseline in 18 regions in the first six months, factories in the Pearl River Delta Region are still feeling the pinch from a labor shortage, the Guangzhou Daily reported Wednesday.

Workers in the Pearl River Delta Region witnessed a pay rise of 30 percent. General workers' wages rose to about 3,000 yuan per month (around $465), double the minimum wage in Shenzhen, which is 1,320 yuan. However, general workers are still difficult to hire in this region, the newspaper said.　

The region is now facing a labor shortage of more than two million. Lu Xinggan of the Shenzhen Le Yun Tong Export Co Ltd told the reporter that wages of around 2,000 yuan were becoming unattractive to workers in coastal areas, plus, the general workers are mostly post 90s, who are frequently moving. The mobility of workers is a major problem, according to the newspaper.

Shen Xinmin, an advisor to the governor of Guangzhou province, told the reporter that the labor shortage is structural. General workers are lacking in catering, service and manufacturing industries, while modern service and high-end manufacturing industries are in need of highly-skilled workers.

Raising the minimum wage level is the most direct and effective way to solve the problems, according to Shen.