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Whut? You mean people with epicanthic folds are just like those without? Prefer an indoor job, no heavy lifting? Say it ain't so! https://t.co/TLiIW4huqx

— Tim Worstall (@worstall) August 7, 2023

The Wall Street Journal is duly alarmed — “The Era of Ultracheap Stuff Is Under Threat”:

… Asia, the world’s factory floor and the source of much of the stuff Americans buy, is running into a big problem: Its young people, by and large, don’t want to work in factories.

That’s why the garment factory is trying to make its manufacturing floor more enticing, and why alarm bells are ringing at Western companies that rely on the region’s inexpensive labor to churn out affordable consumer goods.

The twilight of ultracheap Asian factory labor is emerging as the latest test of the globalized manufacturing model, which over the past three decades has delivered a vast array of inexpensively produced goods to consumers around the world. Americans accustomed to bargain-rate fashion and flat-screen TVs might soon be reckoning with higher prices.

“There’s nowhere left on the planet that’s going to be able to give you what you want,” said Paul Norriss, the British co-founder of the Vietnam garment factory, UnAvailable, based in Ho Chi Minh City. “People are going to have to change their consumer habits, and so are brands.”…

Starting in the 1990s, China and then other Asian manufacturing hubs integrated into the global economy, turning nations of poor farmers into manufacturing powerhouses. Durable goods such as refrigerators and sofas became less expensive.

Now those manufacturing nations are running up against a generational problem. Younger workers, better-educated than their parents and veterans of Instagram, TikTok and other social media, are deciding their work lives shouldn’t unfold inside factory walls.

Demographic shifts are playing a role. Young people in Asia are having fewer children than their parents did, and at later ages, which means they are under less pressure to earn a steady income in their 20s. A booming services sector offers the option of less-grueling work as store clerks in malls and receptionists at hotels…

In the past, manufacturers might simply have moved to less expensive destinations. That’s not so easy these days. There are nations in Africa and South Asia with large labor pools, but many are politically unstable, or lack good infrastructure and trained workforces.

Clothing brands were stung when they expanded into Myanmar and Ethiopia, only to find operations disrupted by unrest and civil war. Bangladesh has been a reliable base for producing clothes, but restrictive trade policies and clogged ports have kept it from making much beyond that…

India has a huge population, and firms seeking alternatives to China are expanding there. But even in India, factory managers are beginning to complain about the difficulties of retaining young workers. Many young people prefer farm life supported by state welfare programs or choose gig work in cities over living in factory dormitories in industrial hubs. Trained engineers leave factories for IT jobs…

The labor landscape was much different two decades ago, when finding workers was as simple as opening factory gates and watching bicycles stream in.

In 2001, Nike reported that more than 80% of its factory workers were in Asia, and that the typical one was 22, single and raised on a farm. Today, Nike’s average worker in China is 40, and in Vietnam, 31, in part because Asian countries are aging rapidly…

When Asian factories automate, many have trouble finding workers capable of operating advanced machinery. Managers said not enough young people are interested in learning mechanical engineering, and that the ones that do jump to other professions.

Abhyuday Jindal, managing director of Indian stainless-steel manufacturer Jindal Stainless, said Gen Z workers are drawn to the IT sector, and that most of them “look for office jobs, even when recruited for technical functions.”

Factories “either have to pay a bit more money for the skills they want, or compromise on the capabilities that they need,” said Richard Jackson, managing director of JacksonGrant, a Thailand-based recruitment firm…

Young people from developing countries who otherwise might take factory jobs are finding work caring for the growing numbers of the elderly people in developed nations, as well as plugging gaps in those countries’ aging workforces.

Susi Susanti, a 29-year-old from Indonesia, said she tried factory jobs after graduating from high school. She hated being pressured to work faster by her managers at an electronics factory, and in a second job making shoes. She told her mother she had to do something else.

A six-month training course taught her rudimentary Mandarin, and she set off to work caring for an elderly couple in Taiwan. Her pay is three times as high as she earned in factories back home, she said, and it’s less exhausting. “When the person I’m looking after is doing well,” she said, “I can relax.”

And yet populist politicians & media in US and their nostalgic economics (JD Vance, Trump, T Carlson) yearn for good old days when everyone had the opportunity to work in an environment where they could lose a limb.

— Joshua Henry (@joshdhenry) August 7, 2023

WSJ: Those Pesty Asians, No Longer Willing to Support Our Addiction to Cheap Stuff – STOCKPILEPost + Comments