@Risk

There’s a growing labor shortage in China, and analysts aren’t exactly sure why.

According to The Wall Street Journal’s blog “China Real Time Report:”

Various domestic media reports put the labor supply gap at around a million people in Guangzhou and neighboring cities such as Dongguan, legendary centers of China’s export boom in the past three decades. Numerous assembly lines and construction sites are sitting idle while anxious employers have raised salaries by more than 30% but still can’t attract enough applicants.

Shen Hong, the author of the post, suggests that at least part of the problem may stem from the fact that new-generation migrant workers aren’t interested in tough basic jobs like construction any more.  The Chinese government has reformed policies and modernized farming to such an extent that rural jobs now compete favorably with work in the city. In addition, second-tier inland cities are experiencing economic booms of their own, and workers may prefer these alternative locations simply because they’re closer to home. Lastly, China’s improved standard of living, in general, means that young workers are less apt to accept the hardships of working in the city, Hong says.

PC Mag is also reporting that this “mysterious” labor shortage may affect the prices of LCDs and products that depend on them. The article points out that Asustek Computer has already rearranged it outsourcing, and that optical disk drive maker Lite-On is reporting  that its factory in southern China is running short of about 800-1,000 workers, about 10% of its regular personnel.

Will this labor shortage affect your inventory control?