Shortage of workers in China!

People are the most valuable resource. Even in China with 1.3 billion people. How do we know people are valuable? Because the cost of employing them increases. Julian Simon, the late University of Maryland economist spent much of his career showing that "natural resources" have no value until people use them. The value is in their use; it's not intrinsic. And over time the value of almost all resources was going down because people were inventing new ways of doing things and funding substitutes. A great example is silicon chips; they are made of some of the earth's most abundant materials - sand, which is silicon, oxygen, and aluminum. But he found one resource that keeps increasing in value - people. In his book The Ultimate Resource 2 he analyzes all sorts of resources and finishes withthe most valuable one - the ultimate resource - that keeps increasing in value. Does China have too many people? Then pay should be low and decreasing. For the unskilled in rural areas pay is low. But it is higher in the areas that manufacture for export - and rising. The Times (UK) reports

Sweatshops are becoming a thing of the past as skilled staff won't get out of bed for less than £50 in prosperous southern China The world’s most populous nation is suffering from a shortage — of people. The workers who churn out bras for the British high street and toys to go under the Christmas tree are no longer happy to work in factories where security guards keep them behind locked gates or where taking a lavatory break of more than a minute could mean a fine. Since China has been transformed into an industrial juggernaut, demand for labour has soared so that it outpaces supply. This may not be the case in every province, but it is becoming a pressing problem for factories in the prosperous south, which rely on migrant workers.

They are considering raising the minimum wage! But the real bind is for skilled workers.

Brawn is easily available and university graduates are two a penny, but skilled workers with technical training are at a premium. Mr Chen said: “The Government doesn’t have the resources to train and encourage young people, so it is up to enterprises to solve this problem.” ... China has about 200 million migrant workers who have left their farms and roam coastal and bigr cities for better-paid jobs Southern Guangdong province has a shortage of about two million workers Wages in cities are rising at 13-15% a year, while rural wages are rising by 17% The number of labourers aged 15-24 and the share of this age group in the total population is falling The number of people working in manufacturing has dropped dramatically, with 98 million employees in 1995 down to 83 million in 2002 Salaries in urban manufacturing have more than doubled since 1991, from $642 a year in 1991 to $1,329 in 2002

The "ultimate resource."