>I would want to add that all the analyses of Chinese labour markets that I
>have read argue that, given the skill profile of employment in China,
>Chinese manufacturers face an almost infinite supply curve for the forseable
>future even at present growth rates. From this it would be hard to argue
>that market mechanisms are likely to produce any kind of a wage and thus
>inflation spiral in China.
But the biz press is full of reports of labor shortages in China - esp of skilled labor - with wages and other inducements rising.
>To Doug's sanguine interpretation I would want to argue that near full
>employment can induce a wage spiral sans any upsurge in union millitancy or
>deepening of density.
A cyclical one, yes; a structural one, like in the 1970s, I doubt it.
> That said, however, we are just not seeing, in
>Canada or the US, any sign that this so-called blistering hot job market is
>pushing wage gains ahead of inflation or productivity increases which is
>quite a different story then in the 1970s.
A strange thing is going on in the US now - average earnings are flat, but there's quite an acceleration at the high end. So, for example, average weekly eranings for production workers (80% of the private sector workforce) were up 2.9% in the third quarter of 2005 according to the monthly establishment survey, but the just-released estimate in the county wage and employment series, which includes managerial pay and bonuses that aren't in the monthly survey, was up 6.1%. This comports with anecdotal evidence about shortages of skilled workers.
Doug