Not long ago, Mexican factories couldn’t compete with the “China price,” the ridiculously low cost of production in the Asian nation.
But some time this year, with rock-bottom wages now soaring in China, the average cost of factory labor in the two nations will be roughly the same. This is a boon to Mexico, and its industrial parks are swelling.
The trend has caught the attention of chief executives such as Rob Moser, the president of Casabella Holdings, who recently started totting up the pros and cons of where to make the housewares that his New York firm designs and sells.
China had been cheap – really cheap – when he first started buying there in 2003. But labor costs have climbed at a double-digit pace, and there were other factors that made China less convenient.
“You’ve got to get a visa to China
Here are your jobs America.
Do you think you'll ever be able to compete with $3.50 per hour?
The Boston Consulting Group, a major business strategy consultancy, says average factory wages in China this year have hit about $4.50 an hour – including benefits and other costs – and are likely to climb to $6 an hour by 2015. Mexico’s National Statistics Institute says average manufacturing wages stood at $3.50 an hour in June, the most recent month tallied, but that figure doesn’t include benefits.
“We’re at that point where Mexico is now getting wages that are lower than in China,” said Harold L. Sirkin, a senior partner at the Chicago office of the Boston Consulting Group. “The fundamentals are pretty favorable to Mexico.”
Read more here: http://www.mcclatchydc.com/2012/09/10/167930/as-chinas-wages-climb-mexico-stands.html#storylink=omni_popular#storylink=cpy
