South China Facing Labor Shortage

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It’s rare that during a worldwide economic recession that you’d actually find that there is a shortage of workers, but right now, Shenzhen, China’s district where you’ll find many tech factories, is facing a severe labor shortage following the Chinese New Year Holiday. Chinese workers get two weeks off of work for the holiday, along with a hefty bonus, and some haven’t returned to work.

The factories in China’s southern districts are often worked by transient workers from the poorer northern areas who move away from their families to earn a wage making iPods and PlayStations in the south. Chinese workers get a large bonus for the New Years two-week holiday (with one source reporting they get as much as the equivalent of $1,000).

Now, some Chinese newspapers are reporting that workers from the north have quit or failed to show up following their big paycheck and the two-week vacation. Overall, the Chinese-language Commercial Times newspaper is reporting that the recent increased demand of consumer electronics, and the recent decrease of workers from outside the Shenzhen district is causing a demand for labor.

The two-week New Years holiday is a fact of life for many Western (and Japanese) consumer electronic companies who must endure a two-week halt in their manufacturing plants in the far-east. Now, that delay is being compounded by a labor shortage in the region. Commercial Times is reporting that area factories need about a total of 820,000 workers to fulfill all their positions.

At this point, it’s too early to tell if this labor shortage will effect the supply of your favorite tech gadgets (god forbid, the iPod). The business of Chinese OEM manufacturing is very cut-throat, and I’m sure they’ll find some workers somewhere.