china’s labor force leeoz avni, doron kraus. china’s economy the world’s second largest...
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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