Wage Gap Between China an Us

4. Technological changes both helped and hurt workers by making it easier to work but making it harder by causing a need for skilled labor.

The structural manifestation of the economy manifested itself in two ways. First, each sector’s contribution to the total income of the nation changed in the course of economic growth. As this happened, the nature of the work that laborers performed was also transformed (Olson 288). The value of agriculture as the principal employer started to diminish. As a result, attention of laborers shifted to the manufacturing sector.

This has happened in part because many kinds of jobs now require higher skill levels, but other factors were also important.

• The enormous surplus of labor in China imperils workers worldwide as international competition puts incessant downward pressure on wages and working conditions, leading the apparel and textile industries to favor the cheapest and most Draconian producers.

As the rise of immigration gradually inclined, many more job were available for those of different backgrounds, as well as the growth of factories and manufacturing which flourished many cities in numerous states. With more labor being distributed, the price for necessary goods

industry. This change ties in with the change in coercive labor because in order for this industry to boom,

Offshore countries such as China and India have very little organized labor present, so the private sector is taking advantage of this by moving their business in order to take advantage of the low cost of labour.

“Making it in America”, by Adam Davidson, illustrates how technology and machinery are interchanging humans in the workforce. Machines are taking over factories and leaving more employees out of work. Davidson also points out that the wage-gap is considerably increasing between un-educated and educated laborers. Corporations and companies all over the world, including the Americans, Europeans, and Chinese, are purchasing machines over hiring workers to save money.

American’s now quite overwhelmingly agree that this is not the case. Another secondary argument is that the way the United States has dealt with the Chinese in terms of trade has presented many challenges to American employment. Where the United States once dominated manufacturing, China now leads the world by creating goods for extremely low costs, harnessing innovation in manufacturing technology and orchestrating the theft of intellectual properties. Bonvillian makes a point to mention that innovation in Chinese manufacturing is typically understated in discussions, as most are only concerned with the underpayment of the Chinese workforce. A counterpoint to the belief that a nation has to underpay its workers to succeed in manufacturing is the example of Germany. A large number of German citizens work in manufacturing for high wages, creating more expensive goods. The German’s run a trade surplus with China because of their trade strategies. Another great secondary claim is that the United

Literacy Rate is low: Less people are educated thus we found less skilled labors. But at present stage both skilled and unskilled labor are necessary for using good technology and production.

China is one of our biggest labor competitors. The reason many US companies go to China for outsourcing is again, because of their workforce’s willingness to operate at low costs. Michael Zimmerman describes this as a disparity in worker “tolerance”. Where the low wages found in China are “far lower than U.S.

There are some factors to be considered before making a significant change for the company. The first factor is the ability to pay the employees. The company has to look at the labor-market competition. The organization has to decide the pay level for its employees and whether that labor costs can be covered by the profit earned. Plus, if the organization cannot pay the employees at the competitive rate, the employees will more likely to leave the company for a better job offers. The second factor is product-market competition. If the organization decides to increase the wages of its employees, the company has to charge a higher price for its products or services to make sure that it will get a return on investment. However, if the company increases the price its charge to the customers more than they are willing to buy, there is a risk the company will lose some of its customers. The third factor to be considered is workers’ capabilities to do their jobs. If the workers have a lack of skills to do the job, then it is not worth it to invest a lot on them and vice versa. Thus, the company should consider some factors such as labor-market competition, product-market competition, and worker’s capability before it makes the adjustment in the worker’s wage and

Once the factory became common, technological advances were soon made to improve them, the most important of which was the division of labor.

Labor is one of the largest and in certain sectors the most expensive component in the production of goods. Outsourcing acknowledges the labor cost to produce a particular product is cheaper if the manufacturer were to produce the same product in-house where the cost per unit is significantly higher. Stable labor costs are important for long-term revenue projections to be relied upon by managers because they are a precursor of where a company is trending financially. It is this efficiency-in-scale that confirms the benefit of the division of labor memorialized by Adam Smith. As a result of the wage disparity between the costs of American workers versus Chinese workers, hundreds of U.S. based firms relocated all or part of their operations to China, taking advantage of the inexpensive labor market and the many cost-saving incentives offered by the Chinese government.

Labor relations in China have become more and more complex, labor conflicts have occurred frequently, and thus labor disputes have been growing with a rate much faster than that of the development of GDP in the past decade. They could become a potential obstacle to the economic development if not appropriately managed. The paper studies the condition of labor relations, and probes the profound reasons for it, and compares it across the world in order to give a description for it.