Stereotypes, and the Price of Rice in China...

Filed in archive Blogs on August 2, 2008

I participate in a closed social network of educators where a principal I'm familiar with posed a question. The topic had to do with convincing teachers that China (and the rest of the world) matter - that we should pay attention to globalization, etc. The principal had one teacher reply that she didn't expect to ever be forcred into workig in a Chinese sweatshop in exchange for a pound of rice a week. What do you say in response to that? Here was my answer...

I don't know much about Brazil, but I can talk a little about China...

China instituted a new version of its labor law on January 1st. It was a big deal to companies that do business in China. It provides a great deal more job security for the average Chinese worker. It created a standard 40-hour work week and a scale for fixed overtime. And it raised the minimum wage in China considerably.

Chinese average salaries increased considerably in 2007. Salaries went up because the lowest paid workers got more compared to the situation in the U.S. where the rich get richer. (I'm not a communist; just a populist.) Even though salaries increased in 2007, China's new labor law raised...

© visualpanic

Even though salaries increased in 2007, China's new labor law raised the minimum wage by 50% at the start of 2008.

The minimum wage in China varies from region to region. One reason for the increase in the minimum wage is that China has a labor shorage. Remember that the original version of "Shift Happens" talked about shipping all our jobs over there. That might have worked then, but it's not true anymore; there aren't "extra" Chinese workers sitting around doing nothing...

Shenzhen has the highest minimum wage - about $145 a month. That may not sound like much, but kep in mind that even with our minimum wage increase this week, the minimum wage in the U.S. still puts you below our poverty line. Beijing has the highest average annual salary - about $5,000 a year.

China's hot economy has begun to experience inflation in the last year or so - especially in food items. The price of rice in China is up by about half in the last few months and it is double what it was in 2004. Four months ago the Associated Press reported that rice was between 77 and 82 yuan for a 50 kilogram bag of rice. Price depended on the type of rice. (China's government is worried about the possibility of food riots if it doesn't find a way to control inflation.) The Chinese yuan is trading today at 6.82 yuan to the U.S. dollar. If we factor in the 50% increase over the last few month we can say that rice is about 120 yuan per 50 kilos (110 pounds) now, or around 1.1 yuan per pound. That's just over 15 cents a pound. Compare that to the pound of (Best Value) rice I bought yesterday for 96 cents.

So minimum wage in Shenzhen in a month with 23 work days would come to about $6.30 a day, or $31.50 a week. That's about 210 pounds of rice a week you'd be working for in that part of China.

For what it's worth, rice is a daily staple in Southern China, but most of China lives off of noodles (which are made from wheat...)