I’m a design engineer for a company that builds custom assembly and test machines for all types of industries. These days, most of my work goes into the numerous maquiladoras that line the US-Mexico border, where US manufacturers exploit the huge wage disparity between American and Mexican workers to keep their costs lower. Typically, the equipment we design and build for Mexico is what we call “lean automation”, in which the machine still requires an operator to fulfill its task.
Recently, one of my customers in Tijuana has been putting more hi-speed, fully automated equipment in their facility. When I questioned one of their Mexican manufacturing engineers about it, he stated that they were doing so to stay competitive with cheaper Chinese labor. They were afraid that their corporate overlords in the US would start shifting production to China if they didn’t focusing on ramping up productivity in the Mexico facilities. He went on to say that their average assembly worker wage started around $1.35/hr, topping out around $1.90/hr. He said Tijuana wages are higher than in most of Mexico, but that they were also not one of the better paying maquilas in TJ, so it is questionable to use this number as an average for Mexican factories. Maintenance techs, engineers, and other skilled positions paid more, but in general the wages he quoted were low compared to their US counterparts. He had heard that Chinese workers made about 15 cents/hr. That seems hard to believe to me. I googled and found huge discrepancies in wages quoted, but a couple of sources mentioned $120/mo. as a typical wage, while stating that Chinese workers typically work far more than 40 hour work weeks.
Anyone have reputable numbers? Does China even have a minimum wage law in effect?
There are lots of other advantages than wages for working in Mexico, and wages alone aren’t the best motivator for moving to China if you’re highly automated. If you have masses and masses of people with little automation, though, it’s suddenly a lot easier to make a case. Currently, though, most of the exodus (well, not quite an exodus yet) of automotive maquiladoras is to other, lower-paying Latin American countries!
Ah, so, in Hermosillo (which is in the same minimum wage zone as Northern Baja), the hourly, direct guys at our big, American facility was about $30 per day plus benefits (lunch, medical, etc.). When we put in some serious automation there, most of the people that left went to work at suppliers, which paid about the same and had similar benefits. Keep in mind that the auto industry is pretty high profile, and so it’s possible these wages are slightly higher than other industries on the same area. Back in 1999 the daily wage for a similar plant of a different manufacturer that I then-worked at was $20 per day, and the rumor (never proven) was that the intention was to pay more but the government interfered as it would upset the socio-economics of the area. This was in the middle of the republic, away from the border, where wages are generally lower.
For what it’s worth, all the middle-class Mexicans I know are pretty worried about China. They’ve only ever had a non-leftist government for the last seven years, and now that things are able to happen economically, suddenly the whole world wants to ship work to China rather than Mexico. They still have lots of growth, but it’ll level off a lot faster than they thought it would.
In China ( Guangdong province ), the average wage for a factory worker ( with legal forms, taxes, etc ) is around 70 Euros/100 US $ per month netto.This applies to the textile enviroment, but is more or less the same across all industries.
I worked as an construction supervisor and provided start-up services at a pulp and paper mill in China for close to a year. A college graduate there earned the equivalent of $150 per month. This was for 300 hours work. They worked 10 hour days, 7 days per week, translating to around $0.50 per hour.
The hourly workers earned around half of that for the same work week. The mill provided housing and meals as well. The meals were the same ones that could be purchased in local restaurants for a few yuan, so call it maybe $30 per month in the value of the meals, and $50 per month for housing. I’m guessing on the housing, I have no idea what the cash value of dormitory style housing would be. This was back in 2001-2002