Cheap energy beginning to supersede cheap labor in world market
Are China's factories running out of power?
JEFF RUBIN
Special to Globe and Mail Update
Posted on Tuesday, May 24, 2011 11:07AM EDT
Why has Global Sticks, a manufacturer of wooden ice cream sticks, moving from Dalian, China, to Thunder Bay, Ontario?
It’s the kind of low margin manufacturing that is never supposed to come back after it leaves North America for cheaper labour abroad.
But wage costs are no longer everything they were cracked up to be. In today’s world of soaring energy costs, power rationing and export taxes on key commodities such as wood, wage gaps are less important. When the power goes off, it suddenly doesn’t matter if your labor is expensive. Factories don’t run on sweat alone.
(More here.)
JEFF RUBIN
Special to Globe and Mail Update
Posted on Tuesday, May 24, 2011 11:07AM EDT
Why has Global Sticks, a manufacturer of wooden ice cream sticks, moving from Dalian, China, to Thunder Bay, Ontario?
It’s the kind of low margin manufacturing that is never supposed to come back after it leaves North America for cheaper labour abroad.
But wage costs are no longer everything they were cracked up to be. In today’s world of soaring energy costs, power rationing and export taxes on key commodities such as wood, wage gaps are less important. When the power goes off, it suddenly doesn’t matter if your labor is expensive. Factories don’t run on sweat alone.
(More here.)
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