Mexico hourly wages now lower than China’s = + de délocalisations

Mexico hourly wages now lower than China’s

Bonne nouvelle, le coût de la main-d’œuvre  mexicaine est inférieur à celle des Chinois, ça va juste permettre à notre secteur manufacturier (le peu qu’il en reste) de se donner une raison supplémentaire à tous délocaliser.

Entre temps, cher peuple canadien, vous allez constater que votre salaire risque de stagner ou tout simplement d’être réduit.

Extrait de : Mexico hourly wages now lower than China’s: study, Friday, South China Morning Post, 05 April, 2013

Unemployed labourers wait for casual work on a street in Mexico City. A new study says hourly wages in Mexico are now about 20 per cent below China.

Mexico’s hourly wages are about a fifth lower than China’s, a huge turnaround from just 10 years ago when they were nearly three times higher, according to new research by Bank of America Merrill Lynch.

Stagnant salaries in Mexico, fueled by strong population growth, will give Latin America’s second-biggest economy an edge over China in the US market, Bank of America Merrill Lynch economist Carlos Capistran said on Thursday.

Average hourly wages are now 19.6 per cent lower in Mexico than China whereas in 2003 they were 188 per cent more costly, according to the Bank of America study.

Mexico can maintain that competitive advantage for at least five years, thanks to a growing labour market that puts downward pressure on wages, Capistran said.

The demographic bonus from its young population will help boost Mexican growth to 4 per cent this year, he added, and is even more important to juicing the economy than a raft of reforms proposed by centrist President Enrique Pena Nieto, who took office in December.

“Today people are excited about Mexico because of the reforms, et cetera. But when I ask myself ‘what is the most important thing that Mexico has today in terms of growth,’ it’s the demographic bonus,” Capistran said.

Pena Nieto’s government has already passed major education and labour reforms, while an ambitious plan to boost competitiveness in the phone industry, where tycoon Carlos Slim holds sway, is winding its way through Congress.

According to forecasts by the International Labor Organization, Mexico’s economically active population will grow by 20 per cent from 2010 to 2020, compared to a 2.9 per cent increase in China over the same period.

Lower transportation costs and projected productivity gains in manufacturing will also bolster Mexico’s competitiveness, Bank of America said. That, in turn, can help compensate for the currency’s rapid rise, which tends to hurt exporters.

Optimism about Mexico’s reforms has helped the peso gain more than 4 per cent this year, prompting the central bank to cut interest rates to a historic low, in a bid to tame the appeal of the currency and peso-denominated debt.

Mexico’s wages as a proportion of economic output are lower than those in Indonesia, the Philippines, Thailand, South Korea, Hungary, Poland and Brazil, where labour costs have risen dramatically.

The wage restraint has allowed Mexico to increase its US market share at a faster pace than China over the past six years.

However, China still had the bigger share at the close of last year: China accounted for 17.5 per cent of US imports that year while Mexico accounted for 12.4 per cent over the same period, according to Bank of America.

China Is No Longer A Low-Cost Producer

China's explosive economic growth has largely been driven by its booming exports.  And its exports have been driven by its low cost of production.

However, with its working age population shrinking, wages have been on the rise.  And global manufacturers have increasingly moved toward even lower cost countries.

"China is no longer a low-cost producer,"

writes KKR's Henry McVey.

"Importantly, we think rising wages, particularly at the low end, are a structural phenomenon as the population of younger workers aged 15-29 will shrink at an average pace of five million a year between now and 2030, largely due to the one-child policy implemented in 1979. By comparison, this age bracket had actually been growing by two to three million per year annually until recently."

China Is No Longer A Low-Cost Producer

Source: China Is No Longer A Low-Cost Producer

Extrait de : Job Growth Canada: StatsCan Data Shows Low-Paying Service Jobs Leading The Way, By Daniel Tencer, The Huffington Post Canada , 04/05/2013

The latest jobs report from StatsCan was utterly abysmal: Some 85,000 jobs lost in a single month in the private sector, offset only by a 30,000 increase in “self-employed” people -- which is interpreted by economists as a sign people are giving up looking for work. The unemployment rate rose to 7.2 per cent from seven per cent.

But behind the latest data is a long-term trend that looks even more worrisome than this one monthly jobs report.

StatsCan recently updated its data on Canada’s economic performance since the Great Recession that began in 2008, and the long-term employment trends are anything but encouraging.

Looking at the period since January, 2011, which StatsCan pegs as the start of the post-recovery period, overall employment looks timid but acceptable –

·         Canada added 2.7 per cent more jobs from that month through February, 2013, which is slightly better than population growth.

·         But the largest driver of employment growth has been the “accommodation and food” category -- in other words, jobs in the low-paying service sector. Jobs in that category grew at four times the overall rate, increasing by 10.9 per cent.

·         During that period, the number of food and accommodation jobs grew by 112,000, and manufacturing jobs shrank by 52,000.

·         In case you were hoping the oil sands could make up for the lost manufacturing jobs -- nope. Mining, oil and gas grew by only 18,000 in that period.

·         (In fact, mining, oil and gas hasn't increased its share of jobs in recent years at all. It was two per cent of all jobs in 2008, and still two per cent in February, 2013. Manufacturing accounted for 9.8 per cent of all jobs in February, 2013, down from 11.4 per cent in 2008.)

Canada is replacing relatively high-paying manufacturing jobs
with low-paying service jobs.

The one saving grace of this job market, if you can call it that, is that there are a lot of these low-paying jobs.

The second-largest job growth was a tie between the education sector and oil, gas and mining (5.3 per cent), and the third-largest was in construction (up 5.1 per cent), but with the housing market weakening, construction jobs could head in a different direction soon.

Manufacturing jobs had no recovery at all. As of February of this year, there were 2.9 per cent fewer manufacturing jobs than there were in January, 2011. Importantly, manufacturing output has recovered to pre-recession levels -- just with fewer workers. Good news on the productivity front, but bad news for Canada’s blue-collar workers.

If there is good news to be found in StatsCan’s report, it’s that overall job levels recovered faster in Canada in this most recent recession than they did in the previous two recessions. That’s a far cry from the situation in the U.S., where job numbers haven’t returned to pre-recession levels at all, and this is already the longest job recovery on record.

Of course, if the jobs produced in Canada continue to be of the hamburger-flipping and cleaning-hotel-rooms variety, while higher-paying, higher-skilled jobs continue to flounder, our “recovery” may not turn out to be that impressive after all.