• 4 minutes Trump has changed into a World Leader
  • 7 minutes China's Economy and Subsequent Energy Demand To Decelerate Sharply Through 2024
  • 8 minutes Indonesia Stands Up to China. Will Japan Help?
  • 10 minutes US Shale: Technology
  • 13 minutes Which emissions are worse?: Cows vs. Keystone Pipeline
  • 17 minutes Shale Oil Fiasco
  • 4 hours Boris Johnson taken decision about 5G Huawei ban by delay (fait accompli method)
  • 12 hours We're freezing! Isn't it great? The carbon tax must be working!
  • 2 hours Phase One trade deal, for China it is all about technology war
  • 5 hours Angela Merkel take notice. Russia cut off Belarus oil supply because they would not do as Russia demanded
  • 9 hours Environmentalists demand oil and gas companies *IN THE USA AND CANADA* reduce emissions to address climate change
  • 11 hours Might be Time for NG Producers to Find New Career
  • 12 hours Prototype Haliade X 12MW turbine starts operating in Rotterdam
  • 1 day Beijing Must Face Reality That Taiwan is Independent
  • 11 hours Wind Turbine Blades Not Recyclable
  • 7 hours Swedes Think Climate Policy Worst Waste of Taxpayers' Money in 2019
  • 10 hours Denmark gets 47% of its electricity from wind in 2019
Alt Text

Global Economy Throwing Up Red Flags For Oil

Investors are feeling increasingly gloomy…

Alt Text

Trade War Weighs On Western Automakers In China

Western automakers in China are…

Mad Hedge Fund Trader

Mad Hedge Fund Trader

John Thomas, The Mad Hedge Fund Trader is one of today's most successful Hedge Fund Managers and a 40 year veteran of the financial markets.…

More Info

Premium Content

How US Job Losses Will End

I am not in the habit of regularly lifting data out of the Wall Street Journal, but even a blind squirrel occasionally finds an acorn.

I was tempted by the comparative Asian wage data they published yesterday, which I just have to get into my data base. Textile workers earn $2.99 an hour in India (PIN), $1.84 in China (FXI), and $0.49 in Vietnam (VNM).

This is an 18 fold increase in labor costs from ten cents an hour since Chinese industrialization launched in 1978. This compares to the $8 an hour our much abused illegals get at sweat shops in Los Angeles, and $10 in some of the nicer places.

What's more, the Indian wage is up 17% in a year, meaning that inflation is casting a lengthening shadow over the sub continent's economic miracle.

A series of strikes and a wave of suicides have brought wage settlements with increases as high as 20% in China. This is how the employment drain in the US is going to end.

When foreign labor costs reach half of those at home, manufacturers quit exporting jobs because the cost advantages gained are not worth the headaches and risk involved in managing a foreign language work force, the shipping expense, political risk, import duties, and supply disruptions, just to get lower quality goods.

Chinese wage growth at this rate takes them up to half our minimum wage in only five years. This has already happened in South Korea (EWY), where wage costs are 60% of American ones. As a result, Korea's GDP growth is half that seen in China.

These numbers are also a powerful argument for investing in Vietnam, where wages are only 27% of those found in the Middle Kingdom, and where Chinese companies are increasingly doing their own offshoring.

This is why I have pushed the Vietnam ETF (VNM) on many occasions, with great success. I know every time I do this I get torrents of emails from that country bitterly complaining how difficult it is to do business there, and how the hardwood trees are still full of shrapnel left over from the war, and why I shouldn't buy a 50 acre industrial park there. 

But the numbers don't lie.

HOSE

By. Mad Hedge Fund Trader




Download The Free Oilprice App Today

Back to homepage




Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play