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Where the Wages Are Really Low

By Matthew Yglesias  

"Where the Wages Are Really Low"

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As everyone knows, China’s low wages make it an attractive place to setup factories for certain kinds of manufactured goods. Except so many factories have moved to China that the country’s not nearly as poor as it used to be. So the sweatshoppers of the world are moving to new horizons:

asianwages

As costs have risen in China, long the world’s shop floor, it is slowly losing work to countries like Bangladesh, Vietnam and Cambodia — at least for cheaper, labor-intensive goods like casual clothes, toys and simple electronics that do not necessarily require literate workers and can tolerate unreliable transportation systems and electrical grids.

Li & Fung, a Hong Kong company that handles sourcing and apparel manufacturing for companies like Wal-Mart and Liz Claiborne, reported that its production in Bangladesh jumped 20 percent last year, while China, its biggest supplier, slid 5 percent.

This is the stuff progress is made of. The Chinese economy is still growing, having moved into some higher-end products. And even though both wages and working conditions at apparel factories in Bangladesh are terrible, they represent opportunity relative to current conditions. What’s more, with luck the Bangladeshes and Vietnams of the world will use the revenue provided by these factories to upgrade their infrastructure and teach people to read. Perhaps the most significant problem with China’s currency policies is that it’s retarding this process and making it harder for poorer countries to start working there way up the ladder of economic opportunity.

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