By  on October 2, 2007

BEIJING ­— After nearly two decades of stagnant wages and poor labor conditions, China's manufacturing workers have started demanding higher salaries, pushing up the price of production nationwide.

According to labor researchers, wages for Chinese manufacturing jobs have risen on average 10 to 15 percent annually over the past few years. The increases have come in response to growing employee shortages across the country, as the migrant workers who primarily staff factory lines opt to stay on the farm rather than leave the countryside for negligible rises in income. In addition, a large portion of the massive migrant workforce, now estimated at between 150 million and 200 million people, has been working on the road for a decade and has pricier experience and skills.

"Compared to their previous positions, they can now ask for higher wages and packages, and better working conditions," said Cai Fang, director of the Institute of Population and Labor Economics at the Chinese Academy of Social Sciences.

Cai, who recently completed a study on rising wages and labor shortages, said that from 2003 to 2006, the average salary of manufacturing laborers, including those in textiles and apparel, rose by 21 percent. In 2003, the average industrial worker earned $103 per month, compared with $124 per month in 2006. Leading up to 2002, wage increases in the manufacturing sector were miniscule for nearly two decades as industries relied on a seemingly endless stream of workers arriving in the eastern industrial areas from rural areas.

Yet China's seemingly inexhaustible labor supply is showing signs of strain. Across the nation, including the interior and western provinces where so many migrant laborers came from, pockets of worker shortages have started to appear.

The first came in the Pearl River Delta manufacturing hub in 2002. Researchers argue over the exact number of workers needed to operate factories and how much the shortage might grow. But China's stature as the world's manufacturing giant and its growth means demand for workers will keep rising.

"It's not like in the past, when all a factory had to do was put up a sign and there would be people in line for jobs," said Cai.

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