• 4 minutes China's Economy and Subsequent Energy Demand To Decelerate Sharply Through 2024
  • 7 minutes Beijing Must Face Reality That Taiwan is Independent
  • 11 minutes Phase One trade deal, for China it is all about technology war
  • 14 minutes Shale Oil Fiasco
  • 1 hour We're freezing! Isn't it great? The carbon tax must be working!
  • 28 mins Boris Johnson taken decision about 5G Huawei ban by delay (fait accompli method)
  • 49 mins Trump has changed into a World Leader
  • 5 hours Which emissions are worse?: Cows vs. Keystone Pipeline
  • 9 hours Indonesia Stands Up to China. Will Japan Help?
  • 15 hours What's the Endgame Here?
  • 37 mins Prototype Haliade X 12MW turbine starts operating in Rotterdam
  • 6 hours Might be Time for NG Producers to Find New Career
  • 15 hours Turkey Muscles-In on Israel-Greece-Cyprus EastMed Gas Pipeline Deal. Erdogan Still Dreaming of Ottoman Empire II.
  • 22 hours Trump capitulated
  • 22 hours US Shale: Technology
  • 23 hours Gravity is a scam!
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, 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.

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