The labour cost advantage and china

The labour cost advantage and china Introduction China has an emerging economy and therefore, produces many products. On the European market, there is a large demand for these products. China has relatively low production costs, which makes China an interesting country to import from. Chinese wages have risen sharply with globalization, average wages in China have increased every year since 1978. The average wage in urban areas was 21.000 Yuan in 2006, which is four times higher than the average wage in 1995. How will the wages develop in China? The question for this research is: Has China the labour cost advantage? Content Has China the labour cost advantage? 1 Introduction 2 Content 2 Offshoring in general 3 Why are companies outsourcing to China? 3 Employment in China 4 What was Chinas economic reason to enter the WTO? 4 How have wages been developed in China? 6 Wages by Ownership 7 Wages by Region 9 Wages by Sector 10 Wages compared with other countries in Asia 11 Has China the labour cost advantage? 12 Bibliography 13 Offshoring in general Offshoring is defined as the movement of a business process done at a company in one country to the same, or another company, in another country. Most of the movements to lower-costs destinations take place in the own management. Outsourcing is the movement of an internal business process to an external company in the same country and the movement of an internal business process to an external company in another country. Offshore outsourcing occurs most often.  [1]   Why are companies outsourcing to China? There are different reasons why companies outsource to China, but some of these reasons are similar. Several reasons for outsourcing to China are  [2]  : Cheap Labour: China offers savings up to five times compared to the U.S. The labour costs in China are 50 percent lower than in India. Labialization of laws and government policies: Government has passed laws which protect private ownership and intellectual property in the country. It has also embraced public/private partnerships and domestic/foreign partnerships. Existence of offshore manufacturing and physical proximity to major markets: China is the manufacturing plant of the world, which provides sound base for outsourcing, strengthened by risk mitigation and greater stability. Employment in China Although China is still a developing country with a relatively low average income, it has a tremendous economic growth since the seventies (9.1 percent in 2004). This can be related to a great extent of an economic liberalising policy. The Gross National Product raised with 400 percent between 1978 and 1998 and the international investments grew tremendous during the nineties. The agriculture is by far the most important sector. Figures of 2007 show that 41 percent of the total population of China is employed in this sector. Nevertheless, the agricultural land limits to around 11 percent of the total Chinese land surface. Since the seventies, the agriculture is privatised, which yield a tremendous production growth. Figure 1: Economic growth, percentage per year  [1]  4 What was Chinas economic reason to enter the WTO? Joining the WTO is a very important event for the development of China at the beginning of the 21st century. WTO membership opens up Chinas market for more international trade and investment, and opens up the world economy for Chinas exports. Some researchers see it as a positive force for Chinas economic development while others are concerned that the competition of foreign imports and foreign enterprises in China might destroy important domestic enterprises in Chinas agricultural, manufacturing and service sectors. The main motivation of Premier Zhu Rongji in promoting Chinas entry into the WTO was to use foreign competition to speed up economic reform in both the industrial and service sectors. In the late 1990s, reform in both sectors was slow due to the inertia coming from vested interests of a group of formerly appointed managers holding on their positions.  [3]   How have wages been developed in China? Average wages have increased every year since 1978. In 2006, the average wage in urban areas in was 21.000 Yuan, which is four times higher than the average wage in 1995. However, as wage levels increased, so did discrepancies between different sectors, types of ownership and regions. In general, average wages were higher in share-holding, foreign-owned and state-owned enterprises, and were lowest in locally funded enterprises, with wages in enterprises owned by Hong Kong and Taiwanese businesses in the middle. A more significant gap emerged between different occupations and industrial sectors, and especially between low-skilled and high-skilled workers.   In 2006, the average wage of employees in primary industries was only 786 Yuan, which is a quarter of the average wage of employees working in financial services (3.273 Yuan) and one-fifth of those working in the computer industry (3.730 Yuan). Wages by Ownership Between 1995 and 2007, the average annual wage for employees grew more than four times, from 5.600 Yuan to 22.700 Yuan. Figure 2 shows the average annual wages of staff and workers by type of ownership from 1995 until 2007. In China, there were three periods of wage reform. The first period of reform started around 1985. Before this year the average wage growth was around 4.9 percent per year. In the period 1986 until 1997, employment in jointly owned enterprises experienced a tremendous growth. The average wage growth per year was still quite low, with an average of 3.9 percent, which was partly due to a negative growth in 1988 and 1989 (because of inflation and political upheaval). The third period was from 1997 until 2007. From 1999 on, the average wages were rising rapidly with an average of 14 percent per year. This could be because of Chinas preparation for getting into the WTO, as well as the restructuring of state-owned enterprises which started in 1998. Wages in the state sector began to increase in the late 1990s, reaching 14.358 Yuan in 2003, surpassing private sector wages by a narrow margin for the first time since reform began. By 2007, the average wage in the state sector was about 11 percent higher than in the private sector. The state-owned sector has been restructured in the 1990s. In the planned economy, they had low productivity, disguised unemployment (because of Chinas political function of maintaining low unemployment) and limited profits. They had a wage system which was dependent on seniority. In the 1990s, the Chinese government would not include the losses of their enterprises. This is why they began with restructuring. They started by allowing privatisation of small and medium state-owned companies. After that, the government started with a more aggressive restructuring. The objective was to shut down loss-making companies and establish modern forms of corporate governance. These reforms led to many layoffs in state-owned companies. From 1996 to 2002, around 40 million employees were laid off. As can be seen in figure 3, the Chinese government succeeded in downsizing the employees and the productivity in the state-owned sector increased. Figure 2: Annual wages of staff and workers by type of ownership in thousand Yuan Source: China Statistical Yearbook Figure 3: Employment share and labour productivity for state owned enterprises Source: http://www.conference-board.org/economics/workingpapers.cfm?pdf=E-0024-07-WP Wages by Region Figure 4 shows the annual wage of employees divided in different regions in China. The 30 provinces are divided by the National Bureau of Statistics of China in six regions: Bohai (Beijing and surrounding provinces), Southeast (including Shanghai, Guangdong and other coastal provinces), Northeast, Central, Southwest and Northwest China. Tibet is not listed, since there is limited information about this region. Figure 3 presents the real annual wage of employees across the six regions in China, showing the different wage patterns. During the first period of reform, the average wages were grouped. Later on, the wages in the South-eastern and Bohai regions began to rise. As can be seen in figure 4, the wages in the South-eastern and the Bohai regions now have the highest average wages. The difference between these two regions and the other four regions is around 30 to 40 percent. The highest growth in the past 20 years has occurred in the South-eastern and the Bohai regions, the coastal areas where cities as Beijing, Guangzhou, Shanghai and Shenzhen are located. Figure 4: Annual wages by Region in thousand Yuan (Source: China Statistical Yearbook) Wages by Sector The wages by sector have about the same pattern as the wages by regions. In figure 5 the wages across sectors are showed. Remarkable is that the wages across sectors stayed clustered until 1993. After 1993, the average wages for Banking Insurance, Scientific research Polytechnic service increased rapidly. These two sectors are both sectors with skill intensive labour. To make a comparison between the skill intensive sectors and the other sectors (unskilled sectors), the average wage in the construction sector was 5.729 Yuan in 1990, about 14 percent higher than the average wage for the banking Insurance sector. In 2007, the Banking Insurance sector had an average wage of 50.000 Yuan, around 265 percent higher than the wages in the Construction sector. People believed that manufacturing wages grew the fastest because of the increasing volume of exports in China. Actually, these wages grew even below the national average, although manufactured products counted for more than 90 percent of Chinas export. Figure 5: Annual wages by sector in thousand Yuan (Source: China Statistical Yearbook) Wages compared with other countries in Asia Figure 6 shows the manufacturing wages of different Asian countries from 1979 to 2007. The wages of China are comparable with the Philippines and Thailand, plausible is that the wages of Malaysia are much higher than the other countries listed. Figure 6: Annual Manufacturing wages between several Asian countries in USD Source: International Labour Organization Has China the labour cost advantage? Wages have been developed. However, there are differences between skilled and unskilled labour. The wages for skilled labour increased rapidly the past decade. (see page 10)Wages for unskilled labour still remains quite low compared to the skilled intensive sectors. Reasons for the wage growth of unskilled workers are the GDP growth of more than 10 percent per year, and the export growth of almost 30 percent per year since China became part of the WTO in 2001. In contrast to this, employment in manufacturing has increased with 3 percent in recent years. Compared to other developing countries in Asia, China still have the lowest wages on average. However, wages in China have developed rapidly since the late 1990s. Another factor is the large supply of graduated students over the past several years. Due to an increasing demand in skilled labour, the Chinese government expanded the enrolment of students in the late 1990s. In 1998, the total number of admitted students was around 1.08 million, a number that increased to 2.68 million in 2001. This could prevent a rapid increase of the wages in the future.

Killing the Black Body †Summary Essay

Control of reproductive decisions of black women is a highly prevalent a form of racial oppression in America. Due to this form of control, the meaning of reproductive liberty in America has been significantly altered. These issues are addressed in Dorothy Roberts’ Killing the Black Body. The novel demonstrates the way in which black women were consistently devalued as a tool for reproductive means, which in itself was a form of racial oppression. The novel also provides the reader with insight as to how experiences of black women since times of slavery have drastically changed the present day connotation of reproductive freedom. Robert argues that throughout American history, the reproductive capacity of black women has been used against them constantly as a means of racial oppression, control, and devaluation. Since the times of slavery, the institution of black motherhood has been minimized and disgraced. For instance, black women were forced to become pregnant. They faced the threat of sterilization through coercion. Black women were vigorously implanted with Norplant, denied welfare because of their procreation, and were imprisoned due to reproductive choices. Their children were taken away and sold to different slave-owners. During the times of slavery, black women were sexually exploited for reproductive reasons and in order to oppress and humiliate the black community. Roberts discusses in Killing the Black Body: After Emancipation, the Ku Klux Klan’s terror included the rape of Black women, as well as the more commonly cited lynching of Black men. White sexual violence attacked not only freed Black men’s masculinity by challenging their ability to protect Black women; it also invaded freed Black women’s dominion over their own bodies (pg. 1). This form of sexual exploitation of black women by white men intimated ulterior motives beside slave breeding. The employment of sexual exploitation of black women by white men as a weapon of fear was a method for whites to strengthen control over â€Å"human property†. Victims of rape and other forms of sexual harassment became more vulnerable and susceptible toward psychological and emotional control by whites due to severe mental and physical ramifications. Sexual harassment was a means of forcing blacks into submission; this tactic created a somewhat obedient abor force. Besides these motives, black women were denigrated through use of their reproductive capacity as a form of slave breeding. During the times of slavery, black women were forcefully impregnated both in order to maintain the institution of slavery and as an economic incentive for white slave owners to control the reproductive lives of black women. A black woman’s child was considered the property of her slave owner from the moment of conception. This key feature in the institution of slavery gave whites the ultimate power of repression against blacks in America. Despite this fact, black women fought back. They took initiatives such as self-induced miscarriage in order to not bear a child. Unfortunately, these women were punished for taking such initiatives; however, they were reprimanded for the wrong reasons. As Robert demonstrates: Indictment further alleged that on December 11, so â€Å"that she might more speedily kill and murder said Angeline,† she wrapped the baby in bedclothes and then â€Å"choked, suffocated and smothered† her. Historian and former federal judge A. Leon Higginbotham, Jr. , asks two important questions about this case. First, he questions Missouri’s purpose in convicting Jane for murder: Did the state prosecute because it cared about the dignity and life of a child born into lifetime slavery with the concomitant disadvantages of Missouri’s law? Or did the state prosecute because Jane’s master was denied the profit that he would have someday earned from the sale or exploitation of Angeline? pg. 49). This illustrates that white men devalued black women by not only using them as a source of reproductive means but also by dehumanizing their black children as the courts convicted these mothers in order to protect whites’ financial stake in the children, but not out of respect for the children themselves. Hence, black women were an economic resource for whites, utilized for sustaining slavery and significantly devalued as well as objectified. Salters (2013) states in her article a recent event where a doctor was accused of illegally videotaping and photographing over hundreds of patients – mostly women of color – during their medical procedures in John Hopkins’ East Baltimore Medical Center, which serves low-income African-American women. This scenario is an ultimate example of the continuation of a long history of dehumanization as well as objectification of Black women as their nude and vulnerable bodies were recorded without their consent. Robert further argues for an idea of reproductive liberty that identifies race as an important reproductive rights issue. She states that the experiences of Black women since slavery has shaped the present day interpretation of reproductive freedom. Robert’s book, along with the content we have discussed in class, has given me a more eye-opening understanding of the racism that still exists in America currently. A concept that reoccurs today since slavery is the idea that whites have defined the notion of woman and fetus. A Black women’s main value as a slave was to produce offspring, which is producing more slaves for the whites. If the pregnant slaves fought or rebelled against the demands of their owners, they were punished without harming the economically profitable fetus inside the slave. Robert notifies: Williams recounted the beating of pregnant slave women on a Mississippi cotton plantation: â€Å"I[‘]s seen nigger women dat was fixin’ to be confined do somethin’ de white folks didn’t like. Dey [the white folks] would dig a hole in de ground just big ‘nuff fo’ her stomach, make her lie face down an whip her on de back to keep from hurtin’ de child (pg. 31). From the start, these form of acts performed by the white owners marked Black women as objects whose decisions about reproduction were subjected to social regulation rather than to their own will. Furthermore, by punishing these pregnant slaves, whites’ implied the message to these women that they were nowhere nearly as valuable as the unborn child that they were carrying. This concept demonstrates the existence of racism in today’s society as it is repeated through accounts of Black women being forced into cesarean sections, prenatal care and other medical treatment â€Å"for the good of the fetus,† because the women are considered too selfish or illiterate to choose for themselves. This is also witnessed when pregnant Black woman are imprisoned for smoking crack and only cases regarding crack smokers are aimed at due to racist intentions, while ignoring the utilization of other drugs. These women have their babies taken away from their care and forced into crowded foster homes. They are often sent to jail while pregnant â€Å"for the betterment of the fetus† and are forcefully implanted with Norplant as a condition of probation, regardless of all the complications that come with carrying on such an implant. Moreover, welfare is seen as only for white women and Black women were to blame for having children they knew they could not afford to raise. Women of color are consistently punished for their decisions regarding procreation even today, as charges are dropped if these women, who smoked cracked during pregnancy decided to abort.

Evaluating a Hiring and Variable Pay Plan

Evaluating a Hiring and Variable Pay Plan Include a brief summary of the situation. Effective Management Solutions (EMS) a small management consulting company divided into four areas: management systems, business process improvement, human resources, and quality improvement that are rapidly growing. The growth has expanded so quickly that, EMS has developed and is planning to execute an aggressive revenue growth plan. The goal is to obtain a 25% revenue increase each year for the next five years, in each of the four departments. A main element of this plan is growth in the staff. The reason for this is that the majority of the entry level associates are currently working at the maximum load of hours and clients. To accomplish this plan EMS predicts it will have to hire 100 associates of which 40 will be for replacements do to promotions, and associates who leave and go to other consulting firms. The additional 60 will cover growth with the new revenue increase plan. Knowing this will be a challenge and that the current hiring package needs to be updated to attract and keep good quality associates, EMS has tasked Manuel Rodriquez who is the one-man HR department to develop a job offer proposal, that will increase the offer rate, decrease the turnover rate of current associates and not create issues among the associates who are currently employed. Assess the attractiveness of the HVP program for both applicants and those who receive offers, deciding for whom it would be the most attractive. The hiring variable plan will be very attractive to both pools of people. And for applicants it would more then likely increase of even applying. And for those who receive offers it would at least bring the company on par with its top competitors and increase the number of accepted job offers. More than likely it will be most attractive to those receiving offers because if all other factors are equal with the company’s competitor’s candidates will be more likely to accept the offer and have a feeling of more ownership of their career path. Predict and justify if the HVP program will likely increase the job offer acceptance rate. The introduction of the HVP program will produce a significant increase in the job offer acceptance rate. The increased market competitiveness, applicant desirability and employees satisfaction would all not only increase the applicant pool but would also slow the outflow of employees. In addition the program would have a double benefit of an increased applicant pool as well as more accepted job offers that would drastically increase the acceptance rate. Predict and justify if the HVP program will likely reduce turnover. The adoption will also reduce turnover. The new found ownership over their career path as well as increased earning potential will significantly boost employee job satisfaction. In addition the variable pay plan will make the companies competitors look less attractive to unsatisfied employees. Give your opinion about how current associates will react to the HVP program. Current associates will mostly respond positively to the new variable pay plan. They will be pleased with option to join the new plan in addition to keeping their current salary. This may put them in a position to earn considerably more than their new peers and employees with their competitors. In addition they have even more earning potential because they may already train for the hot skills premium that is offered for rare skills sets. To the contrary there could be small levels of un-happiness if it seems that new employees have higher earning potential or if the security of the wages previously earned is put at risk. Suggest what issues and problems the HVP plan will create for Human Resources and for the hiring manager. The HVP plan will present several problems and challenges for Human Resources personnel and the hiring mangers. Some of those problems include re-training/ lack of knowledge to explain the program to new and current employees, lack of resources required to implement this new complex pay schedule and meet the new strategic hiring goals, the burden of developing a consistent way for the hiring manger to evaluate hot skills premiums as well as salaries. And whose responsibility it is to update and maintain employees pay plans preferences and lastly human resources receive and resolve complaints for plan participants who chose the high risk path. Human Resources personnel would need be re-trained, given appropriate tools or significantly revamped to handle such a substantial policy change. The may been seen as owners or experts of the new process. In addition a new method will have to be found to input, track, change, and calculate bonuses and weekly pay checks. This could include hiring additional staff, buying or over hauling existing software or out sourcing the process completely. The hiring may have issues determining what hot skills the company is looking for and which new hires possess them. Further more additional staff will be required to screen applicants, interview candidates, conduct background checks, completely develop or revamp the employees orientation, re-structure of each individual area will be needed. In addition protocols and processes will be created and put in place to insure that hot skills premium is fairly evaluated as well as the salary offer aligns with market average. Propose and justify changes in the HVP program. While the HVP program is still in its infancy, at later stage a process could be created to standardize market components of employee’s salaries. For one the hot skills premium and starting salary may be set to market standards or by upper management. This change would provide clarity consistency and fairness to this new compensation scheme. In addition the high risk plan could be mad less drastic so as to not cause a burden to employees in low peak times. The high risk plan as it stands may cause financial burdens to employees which could affect their productivity. References Heneman, H. G. , & Judge, T. A. (2009). BUS 335: Staffing organizations: 2009 custom edition (6th ed. ). Boston, MA: McGraw-Hill.

How to Write an Informative Essay

How to Write an Informative Essay