Shoe Making Enterprises Should Rationally Understand The Rise Of Labor Costs

In Jinjiang, Fujian, the largest sports shoes production base in China, many shoe enterprises generally feel that the pressure they are facing this year is very great: the appreciation of the RMB, the rise in the price of raw materials, and the difficulty in recruiting workers, especially the labor cost has increased significantly: the wages of ordinary workers have increased by 10% - 20%, and the technical workers have even reached 30%. Together with the general rise of raw materials, the cost of a pair of adult shoes will eventually rise by at least 10%. Indeed, after years of slow or even no rise, labor prices have recently begun to rise rapidly. The development research center of the State Council conducted a sample survey of 17 provinces and regions across the country. The results show that from 2004 to 2006, the per capita monthly wages of migrant workers increased by 2.8%, 6.5% and 11.5%, respectively, with the growth rate accelerating year by year. In this regard, some experts estimate that China's labor costs will probably rise by 30% - 50% in the next three to five years. Undoubtedly, it is an objective law that labor prices rise with economic development. From the perspective of international experience, the labor supply and demand relationship in most countries has experienced the "Lewis inflection point" from labor surplus to shortage. When the "Lewis turning point" of Japan, South Korea and other countries reached, the proportion of rural population was generally about 35%. At present, the urbanization rate of developed coastal areas in China has reached more than 50%, which indicates that the "Lewis inflection point" and its impact are coming. For the rise of labor price, it is not necessary to overreact and panic, but to understand, analyze and adapt to the situation objectively and rationally. With the progress of science and technology and the improvement of labor productivity, the moderate increase of labor price will not reduce the international competitiveness of enterprises, nor will it cause the "mass flight" of processing and manufacturing enterprises. In fact, low-cost advantage is indeed an important reason for domestic enterprises to win the competition in the past, but productivity, technology, innovation and system also play an important role. With the rise of labor price, as long as the potential of productivity, technology, innovation and system is fully tapped, enterprise development can win new space. On the one hand, the low labor price makes workers exhausted, and there is no way to increase the value of human capital. The wage increase can undoubtedly affect the expectations of job selection, attract more high-quality practitioners, and stimulate the enthusiasm and creativity of workers; On the other hand, wage increases will reverse the long-term low price of domestic labor and the continuous decline of the proportion of labor distribution in GDP, which is conducive to improving the purchasing power of consumers, alleviating the lack of domestic demand, building a new driving force for economic development, and building a new space for enterprise development; At the same time, the rising labor price and cost will squeeze the living space of low-level enterprises, providing opportunities and possibilities for upgrading the industrial level, adjusting the industrial structure, and transforming the mode of economic growth. Taking Jinjiang as an example, industry experts pointed out that the crisis faced by many enterprises at present is also a turning point for the improvement of the whole industry. A new round of industrial integration will make domestic shoe enterprises more competitive in the international division of labor. Although domestic labor resources are still abundant at present and in the future, there will be structural surplus and shortage in some regions and industries, and labor prices will rise in a curve. Therefore, as far as the present is concerned, on the one hand, we should make all kinds of preparations for the rise of labor prices. Those who respond early should take the initiative, and those who adapt early should develop early; On the other hand, we should also take measures to tap the potential of labor supply by improving the employment and reemployment policy environment, strengthening the protection of labor rights, reforming the household registration system, enhancing the mobility of contracted land and other measures, so as to avoid the "Lewis turning point" appearing too early and too soon, and gain time for changing the mode of economic growth.