China's Students Could possibly Receiver U.S. Work opportunities
The appearance of billions of cheap, diligent Chinese workers within the global economy saw America trade blue collar jobs for affordable t-shirts and toasters.
From 2000, the year before China entered the World Trade Organization, to 2011, the U.S. manufacturing sector shed 5.4 million jobs.
Demographic changes show that China's labor force has now hit a plateau in proportions all of which will soon start to shrink. Manufacturing wages rose 20.1% in the year 2011, outstripping improvements in labor productivity. The expense of U.S. imports from China has started to rise. That crimps the spending power of U.S. consumers, and fuels inflationary pressure.
Rising wages can also be eating into margins, reducing opportunities for U.S. investors to tap easy profits. Morgan Stanley analysts estimate Chinese exporters' profits have shrunk 20% to 30% since 2004. The true number may be even higher. Net margins for Hon Hai Precision Industry, producer from the iPad, fell to 2.4% next year from 5.5% in 2004.
Compounding the woes of white collar America, millions of cheap and diligent Chinese graduates will be jostling for any position in the global labor market. China is producing 6 million graduates annually, and is particularly expected to have 200 million by 2030 as outlined by estimates through the World Bank.
An immense improvement in the global method to obtain high skilled workers while in the years ahead may have the exact same impact as being the surge in low skilled workers greater decade earlier -- denting employment and wage increase in the U.S.
None of the is immediate without it is totally inevitable. Despite a 46% boost in manufacturing wages in China since 2008, the price of U.S. imports only has risen 2.6% - reflecting firms' capability to improve productivity and swallow smaller margins. Language and cultural barriers mean China's professional workers will not put a ding from the global workforce as easily as their factory worker parents did. Rising incomes in China must also boost U.S. exports.
Still, a really profound change in the labor market of your world's most populous country will not leave U.S. workers unaffected. In the first stage of China's development, America's blue collar workers lost their shirt. Over the next stage, America's white collar could start to look a little grubby.